What is Equity in Share market?
The international and national market, in which shares are traded, either by exchange or through the counter, is known as the stock market. The equity market is a meeting point where buyer and sellers of stocks meet to deals the business of stocks. The securities or stock traded in equity market may be public stocks which are listed on a stock exchange or privately stocks through dealers. Basically, we use to trade in stock exchanges, (NSE and BSE).
First, have to know what stock exchanges are?
The stock exchange is the place where stocks are traded may be equity market or derivatives market. Every country having own stock exchanges so there are many exchanges in the world, they can be physical places or virtual spots. Like – NASDAQ (New York exchange-NYSE) is a virtual trading post, their stocks are traded electronically by through networks of computers, and this type of exchange is a market maker. We can say they act as a broker or dealers who facilitate the trading between buyer and seller under the regulatory or authority, through that process of equity trading becomes more smoothly.
First stocks have to get listed in exchange, most of the companies as per his volume or large companies list own stocks on multiple exchanges, throughout the world. (There is also some process of listing of stocks in exchanges). The companies in the equity market are from the large-scale or small scale and traders are from big companies to individual traders.
How to trade in equity market?
If you as an investor bided for stocks in equity market means you must be offering some price to buy the stocks, when seller also asked to sell on specific price, when both the price matches then the bid is executed and sales occurred. Many buyers are bidding on same stocks with different price as well as sellers are also offers to sell own stocks on different price, when both match then a trade occurred, this process is known as an equity trading in any exchanges. Instead of this the buy and sell both can occur on market price in which the buyer and sellers are available at that particular time, the trade can be done on same time.
Companies sell own stocks to get capital from market to grow the own business, these companies are publically trades for capital. This trade can be on an individual or on group companies. Each stocks price represents the values of stocks ownership. Companies appeal to market or investor or buyers that when companies do well then give a reward to as a value of their stocks. There are some risk covers when a company not doing well, and price of the stocks decrease. So always think twice when choosing stocks to buy, must go through the background of the company. The buying and selling of the shares/stocks are easy and quickly through electronically. The price of stocks increasing and decreasing depends upon the demand, if demands are high or investor is attracted to particular companies stocks to buy the price of stocks increases if many investors try to sell out own stocks than the price of stocks decreased. It’s simple as a policy of demand and supply.
This market is basically in two parts i.e. primary market and secondary market. In short, the primary market is where new stocks come via issues are first offered to investors as bonds/IPO or etc directly from the company. And when it’s come in exchange or stocks/equity markets the trading occurred for this stocks known as a secondary market.