Stock exchange

Stock exchange

             “A market in which securities are bought and sold called as a stock exchange.”

Stock exchange is a platform where investors can buy or sell stocks they are holding. Single company stock can trade on multiple exchanges, consider XYZ Company is listed on Bombay stock exchange (BSE) and National stock exchange (NSE). Stock will be available on both the exchanges. Investor can buy the stock from both the exchanges.

Companies wanted to raise capital gets listed on stock exchange. Stocks first become available on an exchange after a company conducts its initial public offering (IPO). In an IPO company sells shares to an initial set of public shareholding (primary market). After that IPO “Floats” shares into the hands of public shareholdings, these shares can be sold and purchased on an exchange (Secondary Market). Listing date is the first day of trading for listing company. Concept is same with exchanges all over world.

Example.

Consider a stock of Larsen & Toubro Ltd is trading at 1372.55 Rs. Buyer wants to buy stock at 1372.55 Rs and seller wants to sell at 1373.00 Rs