The stock exchange or stock market, a market that collects, issues and trades stocks, bonds and other securities, allowing companies to support their capital by giving investors a portion of their ownership.
The exchange is defined as a market that includes the exchanges of a particular region or country and depends on the value or price of the shares traded there.
Another definition of the stock exchange is that it is an activity that depends on the purchase and sale of shares at a general level set for their prices each day.
The way the stock market operates is applied to the stock exchange (titles) by dividing its market into two types:
the main market and the secondary market.
The main market sells new securities for the first time through the application of a range of offers, and investors often get most of the securities, while in the secondary market all post-trade processes are implemented, and many investors, both individuals and institutional investors, participate in this market.
[The stock exchange usually conducts private transactions in equity companies through a range of exchanges that combine sellers and buyers, including shares traded in commercial transactions, and can be executed electronically, including the purchase and sale of shares and all securities.
Buying securities (stocks) that go up or down, and that is one of the reasons why many investors buy a group of them in most professional sectors, and this is called diversification, and the goal of buying diversified shares is often to get money by dealing with shares of companies that are supposed to make good profits , leading to an increase in the price of their shares, while the sale of securities (shares) is often a matter between the seller and the buyer; To sell it, buyers are willing to buy it, and often each buyer starts buying the shares offered when they reach a specified price point.
The benefits of investing on the stock exchange offer a range of benefits for individuals and businesses, and these benefits are summarized according to the following points:
benefiting from economic growth and corporate profits: growth in the economic sector contributes to revenue generation that stimulates demand for products, resulting in a higher value of private money income in enterprises.
Easy to buy: Any investor can easily buy securities and shares by having a broker or financial analyst, or by relying on the Internet.
Getting money, which is done by two methods: buying securities at low prices and then selling them at high prices, is one of the dominant stocks of the majority of investors who aspire to take advantage of the profits of companies whose share prices increase over time.
Many investors prefer to make money by buying shares of companies that offer them financial dividends because they achieve moderate growth.
Ease of sale: If the investor needs to get money from some of his shares at any time, but due to fluctuating stock prices, the risk of losing as a result of this sale may be at risk. The disadvantages of investing on the stock exchange sometimes lead to the emergence of a series of negatives, which are reported:
Loss of total investment: the investor can lose his investment completely if the company loses and goes down. I
ts share price, and the rest of the investors decided to sell their shares, resulting in the loss of all initial investments per investor, resulting in the loss of all money in the savings or inventory area.
The need for a lot of time: Investing in the stock market takes a long time to choose between facilities, and determine the ability of each of them to make a profit, pursuing annual reports, financial statements and private developments in companies, in order to get the best investment price to participate in the stock market.
The emergence of stock price volatility: The stock market is facing a sharp divergence in share prices and all other securities, which will influence the decisions of individuals to buy and sell.
The emergence of competition: New investors face competition with professional investors and traders, or experienced people with time to invest, as opposed to individual investors who need to know how to gain this advantage.
The success of the stock market in the investment process depends on the fact that it is characterized by a set of conditions, the most important of which is:
the more the conditions are necessary for the stock exchange, because it contains many companies, which helps to increase the total value of the shares traded in it, helps investors to diversify the risk , and not focus on a limited number of titles. Liquidity: The ability to raise money through securities, and when the size of the stock market is large, the liquidity ratio is high in the market. Transparency: The ability of the stock market to continuously provide the right information about the companies that are part of it and all transactions involving buying and selling to investors, which reduces the manipulation of financial information, or the acquisition of financial data by a group of investors before others.