A stock market is a marketplace where securities like company stock and derivatives of company stock are traded and these securities are listed on a stock exchange.
The stock market can be categorized into two parts:
The investors in the stock market range from small individual stock investors to large hedge fund traders coming from different areas. The buying or selling orders are placed by them with the help of a professional working in a stock exchange who is known as the specialist. The specialist has the responsibility for the execution of buying and selling orders.
Some stock exchanges are physical locations where the transactions are carried out on a trading floor. The method used here is known as the open outcry method. Few stock and commodity exchanges implement this auctioning method where bids and offers are placed verbally.
With the advent of Internet, this kind of trading methods are becoming redundant day by day. Now, the virtual exchanges are taking over. In virtual stock exchanges, the stock trading operations are carried out with the help of computer terminals. Example of a physical exchange is the New York Stock Exchange (NYSE) and examples of virtual or computerized stock exchanges are the NASDAQ and the Paris Bourse.
- Day trading
- Swing trading
- Position trading
- Value investing
- Market making
- Scalping
- Momentum trading
The various advantages offered by the online stock brokerages are the following:
- Options trading
- Broker's testimonial and quotes
- Efficient management of every financial transaction
