InvestorQ : How does the stock market function and what does it do?
Juvina Maggie made post

How does the stock market function and what does it do?

Answer
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Dia Deshpande answered.
2 years ago


In the past, stock market was the exchange building or location where buyers and sellers of stocks use to bid and quote under the open-cry system. Since the National Stock Exchange (NSE) came into being in 1994, the concept of physical location of the stock market has ceased to exist. Today, any investor can trade over phone, on the internet using the web trading facility or even on their smart phones or notepads. Thus the stock market today is just a meeting point of buyers and sellers. That is exactly the traditional definition of a market in economics which is defined as the getting together of buyers and sellers. The stock market, as we know it today, is a platform for buyers and sellers of equities to trade equities on the basis of a pre-defined set of rules and protocols. The most important role that the stock market play is that it helps buyers and sellers find each other anonymously and also helps in price discovery.