The stock market there are many more or less interrelated by globalization. The 1240 billion in saved game at the Paris Stock Exchange in January 2008 contrasts sharply with the 14.4 billion euros in circulation in August 2008 in the Stock Exchange Ljubljana, Slovenia. These different caps give an idea of ​​the importance of each stock market and the potential impact of the stock market in an economy.

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In the beginning in the twelfth century, the “Exchange” has treated the debts of agricultural groups in collaboration with the bankers. The concept gradually seduces the nations of the Old World including France, Italy, Belgium, Great Britain and the Netherlands. The latter has also been the scene of the first stock market crash in 1636 caused by the collapse of the tulip during October 1. Called the tulip mania, this event led to the development of the area of ​​financing because it has helped popularize the issue of shares and bonds. But the stock market is far from being reduced to the two main financial products.

The Stock Exchange, the concept

The Exchange is an entirely economic, as an institution that deals with trade in goods or values. If the commodity exchanges are for the exchange of goods, the stock market as we used to hear us refer mainly to the stock exchange. To this end, it connects entities with financing needs, such as private businesses and various organs of the state, those with excess capital. Thus, the stock market is to mobilize savings to finance investment. It is a disintermediated system known to be different from conventional banking system.

Therefore, the stock market is a market and operations are held there throughout the trading of securities and financial products whose characteristics ensure the minimization of risks for investors. In addition, these financial products are liquid and can be exchanged any number of times. However, it is important to note that the stock does not trade currencies, which is reserved to the money market or foreign exchange market. It is also called market “OTC” or “counter” to the extent that the negotiations result in a monetary agreement strictly bilateral.

The financial instruments used on the stock market

Stock products are the most common financial instruments including stocks and bonds. If the first give their buyers a partial ownership in a company, the latter materialize a loan. Therefore, the holder of a bond becomes a creditor of the issuer. Titles include the investment certificate, which differs from the action without a vote, the Warrant and financial option. Otherwise, the exchange-traded products are products that rely on changes in the prices of financial stocks and some commodities such as oil, corn and other precious metals. These warrants, ETFs, mutual funds or swaps, forwards and futures.

The stock system has developed a considerable number of indices that are designed to reflect the status and trends of a market or a particular industry in a given period. As an illustration, the CAC 40 (Continuous Assisted Quotation of the 40 largest national values) as a reference for the financial market in Paris and for the transactions in each sector of the economy. Meanwhile, eight other types of evidence which the CAC Next 20 index technology and IT CAC 20 are periodically updated to refine the analysis. In addition, most major stock markets worldwide have their benchmarks. New York is established the Dow Jones relied on by the global industrial sphere. U.S. in technology, the most common is the Nasdaq composite. Otherwise, players may refer to FTSE 100 (Footsie) in London, the Dax in Frankfurt or the Nikkei Japanese place that represents the whole area of ​​trade in Asia.

The Stock Exchange, the operation

Previously, if the system was set up to be accessible to everyone, its development and its importance now require the intervention of intermediaries such as banks, management companies and other financial consulting firms. They then forward the orders of scholarships buyers and sellers to brokers and other officials of the award, commonly known as providers of investment services. This whole process is computerized, abandoning the old system of auction. Thus, each player can take place instantly, in full transparency.

Generally, all purchase orders and sales in the order book information are performed at the opening of the session in chronological order of arrival. Transactions and quotes continue throughout the session. At the closing, orders continue to pile up without being executed. It should be noted that the unexecuted orders will be carried forward to the opening of the next day if their expiration date allows.

This market is regulated, the rating system follows a strict procedure as well as the adjustment in each product. These measures provide investors and security guarantees to buyers that they can be delivered under the terms of the relevant contract, giving free rein to speculation. As such, speculators can enter the primary market which includes new requests for capital. Otherwise, they can act on the secondary market through exchanges of existing products.