A "broker" is merely a representative of a buyer or seller. Brokers manage individual's portfolios, provide advice to those individuals about what to buy and sell, and then place "buy" and/or "sell" orders with the "stock exchange" on behalf of their clients. Brokers generally receive a fixed fee or commission based fee for these services.
A company "sells shares into the market" in order to raise money.
In broad terms every company get's it's cash from three main sources:
(a) Equity (selling shares into the market);
(b) Debt (getting loans from banks and other sources); and
(c) Operations (making cash via it's operations).
If you were to be philosophical, when a company "sells shares into the market", it is really "loaning money from shareholders" (although it is not technically a "loan"). So when a company "sells shares into the market", they would use the term "raising equity capital in the market". The big difference with "Shares", is that "shareholders" are the "owners" of the company, and as such they (generally) face the highest risks in relation to rate of return (dividends) and liquidation scenarios, amongst other things.
"Stock exchanges" have a critical role in the economy on both a domestic and global scale. Without "stock exchanges", there would not be a liquid market in which to trade shares in companies, which would dramatically change the nature of the global economy. It is also worth noting that when a company "lists" on a stock exchange, they are subjected to strict rules that require the company to disclose a lot of information about their financial results (amongst other things) to the public. It is this information that fundamentally drives a lot of enterprise and economic analysis.
Thursday, May 21, 2009
STOCK MARKET INDICES
Stock price index is an indicator that shows the movement of the stock prices. Index is used as an indicator of market trend; it means that index movement describes market condition at one moment, whether it is active or dull.
Through the index, we can know the stock price movement trend today, is it increasing, steady, or declining. For example, if at the beginning of the month, the index is 300 and at the end of the month becomes 360, we can say that the average stock price experiences an increase of 20%.
Index movement becomes an important indicator for investors to determine if they would sell, hold, or buy one or several stocks. Because stock prices move every second and minute, index value will move ups and downs very rapidly as well.
There are 6 (six) types of indexes in the Jakarta Stock Exchange:
- Individual index, the index that uses the price of each stock as its basic price, or index of each share listed in the JSX.
- Sector Stock Price Index, the index that uses all stocks that included in each sector, such as finance, mining, etc. In the JSX, sector index is divided into 9 sectors: agriculture, mining, basic industry, miscellaneous industry, consumption, property, infrastructure, finance, trades and services, and manufacture.
- Jakarta Composite Index, the index that uses all listed shares as the index’s component.
- LQ 45 Index, the index that consists of 45 chosen stocks by considering 2 variables: trading liquidity and market capitalization. There are new stocks listed in the LQ 45 index every 6 months.
- Jakarta Islamic Index (JII). JII is an index consists of 30 stocks that accommodate the Islamic Canon Law investment or an index that is based on Islamic Law. In other words, this index includes stocks theat fulfill the criteria of investment in Islamic Law. The stocks included in this index are stocks issued by issuers that run their business activities not in contrast with the Islamic Law, such as:
- Gambling business and any games that include gambling or prohibited trading.
- Conventional financial institution, including conventional banking and insurance.
- Businesses that produce, distribute, and trade food or drink that are prohibited by Islamic Law.
- Businesses that produce, distribute, and/or provide products and services that destroy morality and harmful.
Main Board and Development Board Indices. Stock price indices that specifically based on group of stocks listed in JSX, Main Board Group and Development Board Group.
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About Stock Exchange
Think Twice before go engaged in stock exchange because its ask really hard work. because i am broker and i have to know about every dependable economy on another which can make Impact on our market and why you have to aware about that if you are ready for that than here your way.
About Stock Exchange.
NSE National Stock Exchange
BSE Bombay stock Exchange
That's about trading
What is equity trading?
It is simply buying and selling of equities. However, unlike other commodities, equities are not traded everywhere, and are traded only in special market places called exchanges.
What is an exchange?
An exchange is a mechanism through which buyers and sellers of equities are brought together. These days, this is largely electronic and done with computers.
Investors cannot, however, participate directly in the exchange and can participate only through members of the exchange, popularly referred to as brokers.
How does the exchange works?
An exchange has pre-specified timings. During that time, all the members of the exchange link up to a central computer through their remote terminals. The members then place bids to buy equities, or make offers to sell equities. Other members who can match the bid or the offer confirm their acceptance, and the transaction is completed.
Members of stock exchanges place bids and offers on behalf of their clients, who are the investors.
Why are brokers required?
Investing in equities is quite risky. The broker is a professional, who knows the risk and can advise the investor accordingly. Secondly, an exchange will become an unwieldy mechanism if the entire universe of investors were to go and start making bids and offers. Reducing the number of individuals is a way of keeping control.
Third, equity trading can also be abused. To prevent these abuses, exchanges as well as the Government has a number of regulations in place. Restricting activity to the members of the exchange will enable the regulations to be followed, preventing abuse of the system.
How are shares traded?
Like in any other buying or selling, once the broker confirms the trade, if you are buying the share, you pay the broker the value of the shares and take delivery of the shares. If you are selling the shares, you hand over the equities to the broker and the broker will pay you for your shares.
When settlement does happen?
Each exchange has its own settlement period within which the entire process of delivery and purchase should be completed. Typically, the process is completed in a week to ten days time.
Which shares to Buy and sell?
An index is an indicator of how the stock market is doing on the whole. An index comprises a basket of stocks. The collective value of these stocks on a given date is taken and given a score of 100. From that day onwards, the value of these stocks is tracked and its score relative to 100 is computed.
The stocks selected are based upon a number of parameters that the creators of the index decide. Equally, the valuation is also done using complex mathematical principles. Periodically, the list of shares used for computing the index also undergoes a change. These changes are decided by the index creators based on the parameters they have set for the stocks for inclusion.
An index shows whether the stock market, on the whole, is appreciating in value or declining in value.
The movement of the index itself is no indicator for individual shares. You may find that a particular share may be increasing in its price even when the index is down and vice versa. The index is only an indicator of the general trend
The common indexes in Indian stock markets are the SENSEX, the index for stocks listed on the Bombay Stock Exchange and Nifty, the index for stocks listed on the National Stock Exchange.
What is an index?
Buying and selling shares involve a fair amount of research. These involve assessing how well the company is managed, how the company is performing compared to others in the industry, how the industry itself is doing, the financial performance of the company, the interest of the lay public in the company, etc.
It is best that you consult an expert in such analysis, before you decided to buy or sell a particular share. Such investment advice is also provided by your share brokers.
How Long to hold on the shares?
Historically, it has been demonstrated that investments in equities offer the best long term returns and hence the highest opportunity to enhance your capital. Thus, the longer you stay invested in the equity markets, the better will be your returns.
However, this holds true for the equity market as a whole, and not necessarily for shares of individual companies. The value of shares of specific companies are subject to various pulls and pressures which could cause a share that is highly valued one day, to drop its value overnight, as a result of unpredictable factors ranging from Government policy to acts of omis
About Stock Exchange.
NSE National Stock Exchange
BSE Bombay stock Exchange
That's about trading
What is equity trading?
It is simply buying and selling of equities. However, unlike other commodities, equities are not traded everywhere, and are traded only in special market places called exchanges.
What is an exchange?
An exchange is a mechanism through which buyers and sellers of equities are brought together. These days, this is largely electronic and done with computers.
Investors cannot, however, participate directly in the exchange and can participate only through members of the exchange, popularly referred to as brokers.
How does the exchange works?
An exchange has pre-specified timings. During that time, all the members of the exchange link up to a central computer through their remote terminals. The members then place bids to buy equities, or make offers to sell equities. Other members who can match the bid or the offer confirm their acceptance, and the transaction is completed.
Members of stock exchanges place bids and offers on behalf of their clients, who are the investors.
Why are brokers required?
Investing in equities is quite risky. The broker is a professional, who knows the risk and can advise the investor accordingly. Secondly, an exchange will become an unwieldy mechanism if the entire universe of investors were to go and start making bids and offers. Reducing the number of individuals is a way of keeping control.
Third, equity trading can also be abused. To prevent these abuses, exchanges as well as the Government has a number of regulations in place. Restricting activity to the members of the exchange will enable the regulations to be followed, preventing abuse of the system.
How are shares traded?
Like in any other buying or selling, once the broker confirms the trade, if you are buying the share, you pay the broker the value of the shares and take delivery of the shares. If you are selling the shares, you hand over the equities to the broker and the broker will pay you for your shares.
When settlement does happen?
Each exchange has its own settlement period within which the entire process of delivery and purchase should be completed. Typically, the process is completed in a week to ten days time.
Which shares to Buy and sell?
An index is an indicator of how the stock market is doing on the whole. An index comprises a basket of stocks. The collective value of these stocks on a given date is taken and given a score of 100. From that day onwards, the value of these stocks is tracked and its score relative to 100 is computed.
The stocks selected are based upon a number of parameters that the creators of the index decide. Equally, the valuation is also done using complex mathematical principles. Periodically, the list of shares used for computing the index also undergoes a change. These changes are decided by the index creators based on the parameters they have set for the stocks for inclusion.
An index shows whether the stock market, on the whole, is appreciating in value or declining in value.
The movement of the index itself is no indicator for individual shares. You may find that a particular share may be increasing in its price even when the index is down and vice versa. The index is only an indicator of the general trend
The common indexes in Indian stock markets are the SENSEX, the index for stocks listed on the Bombay Stock Exchange and Nifty, the index for stocks listed on the National Stock Exchange.
What is an index?
Buying and selling shares involve a fair amount of research. These involve assessing how well the company is managed, how the company is performing compared to others in the industry, how the industry itself is doing, the financial performance of the company, the interest of the lay public in the company, etc.
It is best that you consult an expert in such analysis, before you decided to buy or sell a particular share. Such investment advice is also provided by your share brokers.
How Long to hold on the shares?
Historically, it has been demonstrated that investments in equities offer the best long term returns and hence the highest opportunity to enhance your capital. Thus, the longer you stay invested in the equity markets, the better will be your returns.
However, this holds true for the equity market as a whole, and not necessarily for shares of individual companies. The value of shares of specific companies are subject to various pulls and pressures which could cause a share that is highly valued one day, to drop its value overnight, as a result of unpredictable factors ranging from Government policy to acts of omis
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