Share market can be referred to as a place where stocks are publicly traded and issued. A share is a document that certifies your ownership in a firm and that you can sell to others. Through this buyers and sellers meet to exchange paperwork. A formal market place has been established for investors to buy and sell their shares in order to make the exchange more public.
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Stock market and share market are the same in various aspects. The primary difference is that a stock market allows you to trade financial instruments like bonds, mutual funds, derivatives, and corporate stock. On a stock exchange, only shares can be traded.
Types of Share Market
Share market is classified into two categories- Primary and Secondary share market.
Primary market- This is the process through which a corporation registers to sell a specified number of shares and raise funds. This is also known as being a stock exchange listed company. In this form of market, the primary purpose of the company is to raise capital.
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Secondary Market
The secondary market is where new securities are traded after they have been sold in the primary market. This is to allow investors to sell their shares and exit an investment. Secondary market transactions are exchanges in which one investor buys shares from another investor at the current market price or at a price agreed upon by both parties. Normally, investors undertake such transactions with the help of an intermediary, such as a broker.
