The role the stock exchange plays in trading shares

Fsp Invest, 18 Dec. 2013

Tags: stock market, shares, trading shares, securities exchange, jse

A stock market is fairly similar to a fresh produce market or a flea market. So if you understand how these work, you’re well on your way to understanding how stock markets work. Let’s take a closer look at how the stock market works.

What’s the stock market all about? 
A market is a place where buyers and sellers of a particular product come together. In the case of the stock market, the products traded are shares
Now, you buy and sell shares just as you would any other product. It’s the place where you realise the value of shares when you sell them or speculate on their future value when you buy them. 
The stock market facilitates the process of matching a willing buyer of a specific share with a person wishing to sell the same share. 
So for this reason, countries all around the world established securities exchanges. 
A securities exchange is an organised exchange on which you can buy and sell shares
Most exchanges serve a dual function. As a primary market where companies raise capital for the first time. And as a secondary market, where you can buy and sell existing shares
The Johannesburg Stock Exchange (JSE) is South Africa’s only stock exchange. 
But there are some other exchanges you should know about, namely the Bond Exchange of South Africa (Bondex) you trade gilts and bonds, and the South African Futures Exchange (SAFEX) where one trades in futures contracts. 

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