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Some basic knowledge in stock market

At present, stock market is one of the interesting fields. Somebody want to access this field. But they do not have basic knowledge in stock market. And then, with some basic knowledge which can help you know clearly this field. First, you should know what is the stock market? It is a place to buy and sell stock and shares. The stock market manages the trading of securities giving business access to investors and their capitol. It is a major contributor to the market economy. With 3 main stock markets in the USA investors are able to risk there capitol and invest in business planning to make profits based on a forecast of the businesses future performance.

The NASDAQ stock market was the first electronic stock market in the world. NASDAQ stands for, National Association Of Security Dealers Automated Quotation and is located through a telecommunications network. In other words there is not an actual physical place where you are able to see NASDAQ because it's connected electronically to the companies it represents.

The NYSE or New York Stock Exchange; unlike the NASDAQ they use floor traders to make the trades. It is managed by a group of directors who are responsible for the conduct of their members; overseeing and setting the procedures and policies of the NYSE.

The AMEX or American Stock Market is the final one of the big 3 in the USA; it processes approximately 10% of the securities traded in the USA.

Another function of stock exchanges is "Over the Counter Markets" or OTC. This is the trade in stocks and shares; some time called equity markets. This is mostly the listing of small companies and their stocks. There are two OTC exchanges they are Over the Counter Bulletin Board, OTCBB, and the Pink Sheets. When companies are dropped by the larger exchanges their stocks nearly always move on to these exchanges.

The stock market allows investors to buy and sell ownership shares of publicly traded companies. You can make money within the stock market in two different ways. The first is through capital gains and the second is through dividends.

An increase in the company's capitol assists produce a capital gain an example of this an increase in an investment or the company's estate value. These drive up the value of the company's shares resulting in the shares owned being worth more than the investment made to purchase them.

A dividend is a payment of part of the company's profits; this is decided on by the board of directors. The set the level of divided to be paid out per share; the more shares owned the more return the investor receives.

Share ownership entitles the investor to make a claim on the assets owned by the company. The investor receives a portion of the company's profits and dependant on the type of share owned voting rights. Simply the more of the shares owned the more of the company owned and there for the more access to the companies earnings.

There are 2 types of shares an investor can purchase; Common and Preferred shares. A common share has little preference with a company; for example should they decide to go into liquidation or become bankrupt the owners of common shares will not receive any capitol back until the creditors and preferred share holders are paid. Preferred share holders have this benefit however they do not have voting rights.

Those are the basic knowledge in stock market. They are very helpul if you want to access this field. You can meet more difficulties in stock market. But if you like adventure, stock market is a place where can meet your adventure.
The stock market is a difficulty animal to understand. It can take a long time to grasp all the little quirks involved. By braking down the different section of the markets and focusing on understanding them individually it becomes much easier to grasp. Do not be daunted and take it a step at a time and you should master the markets.