1. What is a stock market and what is its purpose?
A stock market is a market that organize and control buying and selling stocks and currency operations also the stock market sell and buy other securities for examples bonds, the stock market control and organize the operations by following the factors that are controlled by the nature of supply and demand within the financial market, the stock market is different from other markets they don’t offer trading in goods but in the most cases the stock market trade by securities like stocks and bonds also the stock market have legal and technical rules governing its performance and controls how to choose a specific security, there is another definition for the stock market , the stock market is a physical space for example a building or virtual like electronic system , where sellers and buyers gather for trading securities and exchange rates are determined in the stock market according to the law of supply and demand . The stock market includes a primary market (the issue market) in which securities are offered for the first time and the secondary market for the previously issued securities are traded.
There are securities in the stock market that we can trade by them and they are varies according to the level of development of the market and the stock market generally includes the following securities:
The stock market also known as the market that depends on investing in securities such as the purchase and sale of share stocks that are invested by private companies, also the stock market have another definition, the stock market is defined as a physical or virtual place where a group of sellers and buyers are in order to achieve the trading of securities between them, there are two markets the primary market through the securities that invested for the first time and the secondary market that is used for trading securities that have been issued in advance.
• The purpose of the stock market :
The stock market purpose is to achieve a set of objectives and the most important objective is building a secure investment environment capable of achieving competition that is credible. Also there are other objectives and purposes for example developing all methods and means used in trading, applying the best and the latest methods, development through excellence in services provided to individuals and enterprises. Provide information about trading to investors and dealers in the stock market, and supporting private awareness in investment which includes all individuals in the community especially those dealing with the stock market.
• Economist purpose: the stock market is used as an indicator to measure the economic situation of countries, helps to reverse all changes and set price for securities based on supply and demand.
• Encouraging savings and investment: by providing investment offers for most securities which helps attract many individuals towards savings in order to invest in securities rather than applying investments in assets that do not achieve any financial returns such as gold.
• Supporting private awareness in investment which includes all individuals in the community especially those dealing with the stock market.
• Development of work in the stock market and provide service to individuals and enterprises.
2. What are the main securities that are traded in the stock market?
The quality of securities that are traded in each market varies according to the level of development of the market and the stock market generally includes the following securities: Shares, Bonds, Contracts, and Options.
• Stocks: negotiable securities traded in each share represents a fixed share of the capital of joint stock companies.
There are many stocks that locate in the stock market for example:
? NASDAQ in New York.
? Shanghai Stock exchange in china.
? Japan exchange Group.
? TMX Group in Canada.
• Bonds: Debt securities have two types’ private (corporate bonds) and government (treasury bonds).
There are several types of bonds for example:
? Treasury bonds.
? Foreign bonds.
? Municipal bonds.
? Mortgage-backed bonds.
? Investment-grade corporate bonds.
• Contracts: contracts obligating the contractor (seller or buyer) to sell or purchase a certain asset (goods or securities) at the future date and at a predetermined price.
• Options: Non-building contracts give the contractor seller or buyer the right to sell or buy certain asset goods or securities at a predetermined price when their due dates are due.
• Investment units issued by investment funds and Securities deposit receipts issued by financial services companies.