What are the functions of a Stock Market?


Some of the main functions of an exchange revolve around buying, trading, and issuing shares of public companies. This type of financial activity is conducted through established official exchanges (whether physical or electronic) or through (over-the-counter), also known as over-the-counter markets, within a clear set of rules and regulations operate.

Functions of the stock exchange

 A basic understanding of stock market activity is very useful in today's society. The stock market is an integral part of the modern world of finance and trading.

Below are some of the features of the exchange.

• Demand and Supply

The main and most important role of a stock exchange is to generate stable and fast demand for buying and selling stocks. When buying and selling these stocks, the stock market provides a suitable market for them. It also serves as a market to buy and sell stocks smoothly.

• Price

One of the many tasks of the stock market is to speed up the overall process of capital accumulation and formation as much as possible. It encourages investing, saving, and risk-taking in the minds of investors. Investors hope to turn their hard-earned money into profits by investing in the stock market. It can also serve as a means of raising new capital. It is a reliable platform for safe and successful investment decisions.

• Safety

Providing a safe and friendly environment for doing business and investing is one of the exchange's top priorities and one of its most important missions. Trading operations on the exchange are carried out in accordance with clearly defined rules and regulations. On the exchange side, the job of the exchange is to control its employees. The practice of banning forging will be dealt with as soon as possible.

• Create new business

One of the fundamental functions of an exchange is to support and facilitate the creation of new businesses. The ability of a business to operate depends on raising capital and cash. The stock exchange is responsible for this. They are an important place for new businesses to raise capital to meet their financial obligations.

The Bottom Line.

People's savings and investments can be efficiently converted into profitable investment prospects through stock exchanges. As a long-term benefit, this contributes to economic growth. Therefore, its effect cannot be weakened.