What Is Stock Market?

The stock market is where publicly owned company shares can be bought and sold, both OTC (outside the stock exchange) or through a centralized exchange. This equity market, which is also another name, has established itself as a free-market economy, thereby offering companies the ability to access capital in return for offering a portion of the company’s ownership to interested outside parties. Meanwhile, you may visit http://magodomercado.com/aprenda-como-investir-na-bolsa-de-valores-comecando-do-zero/ if you want to know more about stock market investments.

The stock market or equity market offers investors the opportunity to increase their income without the high risk of entering their own business with high overhead and startup costs. On the other hand, selling shares does help companies to develop drastically. When you buy a company’s stock, generally this is associated with an increase in the company’s wealth. Therefore, trading in the stock or equity markets can be equally beneficial for investors and owners.

However, there are negative risks, however small or large, depending on the number of shares purchased, so that a person can lose money in a trading environment.

There are various segments of the stock market that need to be considered when making a purchase or are interested in the shares of a particular public company.

The stock market can be divided into two parts: the primary market and the secondary market.

Primary Market

This is the market where the securities were originally created. This is an open stock market where the company’s shares are offered and sold for the first time and directly from the issuing company. If it has been listed as a primary company it will produce company credibility, and therefore open the door to investors who are more easily enticed to buy the company’s shares.

Secondary Market

In the secondary market, investors trade each other’s shares, while companies that initially sell shares are not direct participants in this transaction. Selling and buying shares that are already owned by investors is a common idea about the stock market, although shares are also sold in the primary market because this is the stage at which shares are issued.

OTC Market

The OTC market, also known as trading outside the stock exchange, is an option for investors to participate in buying and selling shares from a decentralized market.

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