Stock Market

In the market, shares are issued and traded either through exchanges or over-the-counter markets. That is known as the equity market. This market can be divide into main parts: the primary and secondary market. In the primary market new issues are first offered, with any subsequent trading going on in the secondary market. A stock market, or equity market, is a private or public market for the trading of company stock and derivatives of company stock at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The organized trading of securities through the various physical and electronic exchanges and the Over the Counter market. The securities that include Common Stock, Preferred Stock, Bonds, Convertibles, Options rights, and warrants.

. The stock issues of organizations that do not meet the listing and size requirements of the NYSE are commonly traded on the AMEX. Once known as the "New York Curb Exchange" because dealers traded on the street outside brokerage houses in the New York financial district, the AMEX moved indoors in 1921. The unparalleled rise in stock values attracted hundreds of thousands of new investors. On-line trading popularity motivate people to conduct more transactions, and to buy and sell more quickly in order short-term changes in the market. The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. The price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up coming economy. The stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'être of central banks.

Exchanges also perform as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity. One of the many things people always want to know about the stock market. There are many different approaches; two basic methods are classified as either fundamental analysis or technical analysis. Fundamental analysis refers to analyzing companies by their financial statements found in SEC Filings, business trends, general economic conditions, etc. Technical analysis studies price actions in markets through the use of charts and quantitative techniques to attempt to forecast price trends regardless of the company's financial prospects. One example of a technical strategy is the Trend following method, used by John W. Henry and Ed Seykota, which uses price patterns, utilizes strict money management and is also rooted in risk control and diversification.