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Types Of Stocks And What They Are For

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Edwin Poul
Types Of Stocks And What They Are For

 

Stock exchanges are places where shares of different companies are bought and sold to raise funds for the company. Examples of such stock exchanges are the New York Stock Exchange, the NASDAQ, and the Tokyo Stock Exchange. Other well known stock exchanges are the London Stock Exchange, the NASDAQ, and the Tokyo Stock Exchange. Stock exchanges all around the globe are currently active. Click 牛證.

The New York Stock Exchange is the largest stock exchange in the world by volume. It is considered a leading provider of marketplace trading services. Among the major stock exchanges, NYSE is by far the largest and busiest in the world. NYSE is divided into three sections: the New York Board of Trade (NYBOT) which is responsible for day to day market operations; the New York Depository System which provides over-the-counter derivatives trading; and the New York Mercantile Exchange, which is the U.S. arm of the London Stock Exchange. Other minor stock exchanges located in New York are the New Jersey Stock Exchange and the Chicago Board Options Exchange.

NASDAQ is an abbreviation of Net Systems for Trading Excellence, a collaboration of five stock exchanges - Nasdaq, AMEX, NYSE and NASDAQ. It is considered as one of the leading exchanges in the world. The NASDAQ works with energy, fixed income, foreign exchange and technology companies. Over 3 trillion dollars are traded on daily basis. Major companies traded here are GE, Microsoft, Goldman Sacks, Morgan Stanley and Wells Fargo.

OTCBB or Over The Counter Bulletin Board is another famous stock exchange in the world. This is a trade forum where listed and un-listed companies are traded. Over the counter means that there is not a regulated market. Unlisted companies are those whose prices are not covered by any of the exchanges. This implies that investors can buy or sell these stocks without being in possession of the market price.

Stock markets in the US have experienced many negative factors contributing to the down fall of their value. Foremost among them are plunges in oil prices and changing interest rates. Investors have been losing confidence in the stock exchange because of these factors. In addition, since the financial crisis of 2021 there has been a plunge in the number of transactions in the stock exchange. Many investors have been forced to go elsewhere for their investments.

The US government is attempting to change this by introducing some new financial regulations in the form of SEC or Securities and Exchange Commission. These rules aim to increase investor confidence in the stock market. Apart from this, SEC also allows the investors to trade stocks without the necessity of buying and selling them. These rules affect both large as well as small investors.

Over the counter means that the securities being traded are not subject to any regulation of the Securities and Exchange Commission. These companies are not under the supervision of any government agency. Another major difference between OTC stocks and their registered stocks is that there is no regulatory body to control them. This situation has made them a very attractive option for investors who want to invest small amounts of money. Smaller companies usually do not put up much money in the stock exchange. They may only list very minor figures and hence these stocks can be bought and sold easily by any type of investor.

However there are risks associated with such stocks. Since the market is open on all days excepting weekends, they face the risk of sudden and unpredictable drop in prices. Traders may not be able to make good timing on their transactions. Moreover, since the prices are not regulated by any regulating authority, there is no clarity about the management of these funds.

 

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Edwin Poul
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