Stock market – a set of financial institutions in which trade of securities, usually shares happen in a business atmosphere.
There are several types of securities (the documents that confirm the property rights):
• Action – is a valuable paper, which confirms the participation of its owner’s equity in the society and gives him the opportunity to receive dividends – part of the profit society.
• Bond – a security is debt, which the owner receives a fixed percentage of the value of bonds. If the convertible bonds, at some point they can be exchanged for shares of the same company.
• Deposit receipt – is evidence that the person is the owner of the shares.
• Warrants – Securities, which give the right to make a purchase and sale of securities.
• Futures – Contract by which you can make sale of shares at a fixed price.
• Option – a security which gives the buyer the right, and obligation to the seller for the sale of shares at a fixed price.
• Certificates – certificates that are issued by the bank on the fact that you are indeed the owner of money and have the right to receive them after a specified period.
• The bill – a written undertaking to pay a certain sum of money (promissory note). A bill of exchange – the proposal of the creditor to pay a certain amount of them. A variation of a bill is a check.
The main bidders of the stock market are:
• Brokers and dealers;
• issuers;
• Stock Exchange;
• investors;
• Ministry of Finance, central banks, etc.
There are two main areas where implementation of the bidding:
• New York Stock Exchange (NYSE)
• NASDAQ-AMEX – off-site consolidation and stock exchanges.
Factors that influence changes in exchange rates when trading in shares on stock exchanges and OTC trading can be divided into the following types: microeconomic, macroeconomic, capital market factors, market and technical factors, political and psychological.
To undertake an analysis of companies that belong to the same types of industries (emerging, growing, stable, cyclical, speculative, fading), you must use quantitative or qualitative analysis.
Quantitative analysis – the study of financial and accounting companies. In qualitative analysis evaluated the effectiveness of management to build revenue. Only after conducting qualitative and quantitative analysis can make a decision on the formation of a stock portfolio.
To assess the state of the stock market, you must pay attention to the stock index (calculated on the basis of their share value). A drop in the stock index entails a reduction in the value of national currency. A rise in the value of shares improves stock indexes and the value of national currency.
