In common parlance, a market is a location where trading takes place. If we take into consideration markets, a photo that flashes across our minds is of any place which happens to be very busy, with buyers and sellers, some sellers, shouting on top of their voice, wanting to convince customers to obtain their wares. A spot abuzz with vibrancy and energy.
In early stages of civilization, everyone was self-sufficient. They grew everything they needed. Food was the main commodity, which is quite easily grown with the backyard, but for the non-vegetarians, jungles were open with no restrictions on hunting. However, with the creation of civilization, the requirements every being grew; they needed clothes, wares, instruments, weapons and lots of other stuff that could stop easily made or created by an individual or family. Hence, the necessity of a typical place was felt, where individuals who enjoyed a commodity to give and the people who needed that commodity, could gather satisfy their mutual needs.
Over time, the way in which the markets functioned changed and developed. Markets became more and more sophisticated and committed to their transaction to save time and space. Kinds of markets came into being which specialized in a selected kind of commodity or transaction. In today’s world, you will discover markets which appeal to the requirements manufacturers, sellers, ultimate consumers, kids, women, men, students and what not. For any discussion with the topic accessible, the different kinds of markets which one can find in the current day is often broadly considered goods markets, service markets and financial markets. The present article seeks to offer a review of Stock Markets.
What Exactly Is A FINANCIAL MARKET?
Depending on Encyclopedia II, ‘Financial Markets’ mean:
«1. Organizations that facilitate trade in financial products. i.e. Stock Exchanges facilitate the trade in stocks, bonds and warrants.
2. The coming together of buyers and sellers to trade financial product i.e. stocks and shares are traded between sellers and buyers in many ways including: the use of stock exchanges; directly between buyers and sellers etc.»
Stock Markets, since the name suggests, can be a market where various financial instruments are traded. The instruments which are traded within these markets vary naturally. They are actually tailor-designed to suit the requirements of various people. At the macro level, individuals with excess money offer their funds to the people who require it for investment in various kinds of projects.
For making the discussion simpler, let’s take aid of an illustration. Mr. X has Rupees 10 lacs as his savings that is lying idle with him. He desires to invest this money in order that during a period of time he could multiply this amount. Mr. Y is the promoter of ABC Ltd. He has an organization model, but he does not have enough financial methods to begin a company. So with this scenario, Mr. Y can take advantage of the money that is definitely lying idle with folks like Mr. X and get started an organization. However, Mr. X is often a person in Kolkata and Mr. Y could possibly be in Mumbai. Therefore the problem in the present scenario is so how exactly does Mr. Y go to know that some Mr. X has money that he is willing to invest in a venture which is similar to one which Mr. Y wishes to start?