Impact of Sun on Indian Stock Market

Abstract

What is Stock Market?

The transaction which takes place between the two parties is known as trade in stock market. There is a transfer for money of a stock or security from a seller to the buyer. The participants in the stock market varies, it can be small stock investors to large trade investors. These investors can be based anywhere in the world, they may include banks, insurance companies and hedge funds. There are two types of transactions being carried out. First is open outcry which means, where transactions are carried out on a trading floor and traders enter into oral bids and offers simultaneously. An example of such kind of exchange is NYSE (New York Stock Exchange). The second type of stock exchange is virtual kind, which is composed of networks of computers where traders are made electronically traded. An example of such exchange is NASDAQ (National Association of Securities Dealers Automated Quotations). Therefore the main purpose of stock exchange is to aid the exchange of securities between buyers and sellers by providing a market place which can be either virtual or real. Trading is done on the most popular exchanges as it gives the best price and the largest number of potential counter parties i.e. buyers for a seller and sellers for a buyer. To make trading a bit simpler there are brokers as well outside the exchange who bring parties together to trade. There are number of participants in the market. Market participants consists of institutional investors such as banks, insurance companies, mutual funds etc, individual retail investors and corporations trading in their own shares. Some studies have been conducted and it was found that individual investors and corporations who are trading in their own shares usually receive higher risk adjusted returns than retail investors. Previously, buyers and sellers were individual investors but over time market have become more institutionalized. There are large institutions like insurance companies, mutual funds, pension funds, hedge funds, banks and other financial institutions. Due to the formation or rise of the institutional investors there are some improvements in market operations.â€