A market where the trading of company stocks and their derivatives is carried out is referred to as the stock market. The company stock and derivatives are basically securities, which are listed on the stock exchange along with the ones traded privately. The stock market trading known as the stock market trading refers to buying and selling of shares and stocks of the company.
Fernand Braudel, a famous historian, suggested that in the 11th century Cairo, the Jewish and Muslim merchants had set up all possible forms of trade associations and had vast knowledge of all methods of payment. The people of France in the 12th century were concerned with the management and regulation of the various debts of the agricultural communities on the behalf of the banks. These men traded with debts and were the first stock brokers. In the end of the 13th century, traders of commodities gathered at the house of a certain man called Van der Beurse and in the year 1309 they came to be known as the “Brugse Beurse”. The idea of the institution spread around quickly and the institution opened up in the neighboring countries of Amsterdam and Ghent.
The bankers of Venetian began trading in government securities in the 13th century. In year 1351, the government of Venetian spread rumors with the intentions of lowering the price of funds of the government. Bankers from Genoa, Pisa, Verona and Florence followed suit of the bankers from Venetian and started trading in government securities in the 14th century. All this was feasible as these city-states were independent and were not under the rule of a monarch. The people of Dutch started a joint stock trade company that enabled the shareholders to invest in various business opportunities and to share the profits and losses of the business. The Amsterdam Stock Exchange saw the first shares issued by the Dutch East India Company in 1602. The Dutch East India Company was the first to issue bonds and stocks. The credit of the first stock exchange, which introduced continuous stock trade, belongs to The Amsterdam Stock Exchange (also known as the Amsterdam Beurs).
Nowadays every country has a stock market. The world’s largest stock market is the New York Stock Exchange (NYSE) in the USA. The stock trade is carried out in more ways than one, the most efficient being online stock trading. The people who mediate the entire procedure of buying and selling stocks are known as the brokers. The emergence of online stock market trading led to the emergence of online stockbrokers.
Things to be considered before investing in the stock market:
- The shares should be bought at the lowest possible price, and sold at the highest. This is the basic rule that needs to be followed in order to make profits. The success or failure of the investor depends upon this particular move.
- The trend of the stock market should be well understood before investing.
- The reasons behind the bulls and bears of the market should be carefully studied and the investment should be made only after this.
- Patience is an important virtue for the investor.