With the emergence of the Chinese economy as a global superpower, several other markets in the region have gained traction significantly in recent years. One such is that of Philippines. The stock market has emerged as a growing market in recent years. Several individuals have taken up to online trading in Philippines making it a good opportunity.
For those who are on the fringes and are looking to take it up, here’s a guide to the Stock market.
What is the Stock Market?
Stock Market, also known as the Equity market, refers to a collection of markets and exchanges where the issuing and trading of stocks ( also known as equities), bonds and several other securities takes place. A vital component of free-market economies, stock markets provide companies with access to capital in exchange for giving traders and investors a sliver of ownership in the companies. These stocks and securities carry value which fluctuates according to demand. Their periodic rise and fall give traders a chance to trade them and make profits.
How does it operate?
It can be categorized into two segments: The Primary market, where new issues are first sold through initial public offerings (IPOs), and the secondary market where the subsequent trading of these stocks happen. In the IPO phase, Institutional investors purchase these shares from investment banks which set up the IPO. This is usually referred to as the company “going public.” In the secondary market, both the institutional investors and the individual ones trade on these stock. The volume, however, differs from the former and the latter.
What is a Stock exchange?
A stock exchange, is an organized marketplace where the stocks and securities are listed. For a particular equity to be traded on an exchange, it needs to be listed there. The exchange brings together buyers and sellers and facilitates the trade (electronically) of these stocks. Exchanges like these exist in major cities across the globe and bring together investors and traders. The world’s largest is the New York Stock Exchange, NYSE for short which is larger than the next three- London, Tokyo, and Nasdaq- combined in terms of its volume and capitalization.
Who regulates the Stock Market?
Monitoring is carried out by regulatory bodies who ensure that the trading which takes place is fair and orderly. All countries have their stock regulators. For example, in the US, the Securities and Exchange Commission (SEC) monitors the markets; while in India, this role is carried out by The Securities and Exchange Board of India (SEBI).
How can individuals take part in the stock market?
Individual investors also make a significant chunk of the traders that operate on the stock market. To participate in trading, it is advisable for individuals to create an online trading account with Stock brokers and start their activity. An even bigger market than the stock market is Forex. To know more about this lucrative industry, get in touch with reputed brokers such as WesternFX.
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