the stock market
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The stock market is a meeting place for people coming to do business. The business they are doing are buying shares or financial securities. Share market exists in most major cities in the world, some have existed for a long, long time, while other have only recently emerged.
The stock market is no different from the supermarket, the night market or even the farmers market. How does the stock market work? How does the supermarket work? How does the farmers market work? People come to these places to buy and sell commodities. The buyer puts an offer price for the commodity and if the seller is satisfied with the offer, a transaction has been concluded. However, if the price is not acceptable by the seller then a bidding process ensue. The bidding process will continue until both parties agree to a price for the commodity. This will finally mean that the transaction has been concluded.The only difference between the stock market and other markets is that you do not see physical exchange of goods rather, the transactions are done electronically.
The stock market will not be buoyant or robust if the country it is in does not have sufficient liquidity to fuel enough volume of transactions. Apart from that, the country needs to ensure that they have good governance of the stock market and to have strong laws to stop insider trading. Insider trading is a type of fraud or cheating in the stockm market system. It is when one person who has access to information that is non-public and takes advantage of that information.
There are crucial elements that combine to influence the workings of the stock market. The elements are exhaustive. However, there are a few key element.They are:
Supply and Demand
Liquidity
Governance
Political Influence
Global Forces