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Markets & Sundry Details


In the simplest and most effective sense, markets are just meeting of minds. Markets are a place where a buyer and a seller meet, the decide on the products of trade and the price of the trade. Once there is an agreement a transaction is born.

Stock Exchange is the place where stocks and shares of companies are traded by buyers and sellers. They are traded as per the rules laid out by the Stock Exchanges and the larger sector regulator. In past every city or province had major marketplaces for shares and hence most of the exchanges catered to traders and investors of specific province. Hence, you will usually find stock exchanges named after a province or a city. There can be many marketplaces aka stock exchanges in any city.


Technology

New Technologies have been great game changer for stock exchanges. The physical location of any province or its time based availability is redundant. People now have ability to buy at any market place whiteout leaving their cities, hence the markets which offer the maximum benefits – i.e. highest price for the seller and lowest price for the buyer – is most preferred venues of trading.


Titles & Physical Transfers

Earlier most of the stocks and shares traded were of physical settlements, meaning there was always some form of physical goods to be delivered. With the new technologies, the physical goods are warranted or dematerialized; hence there is no physical movement of goods or shares.

For example, when a share that is bought in your name the title of that share and the rights associated with is allocated to your name and account. Hence when you need to sell it, all you have to do is transfer the title of the asset to the subsequent buyer. This is very similar to transfer of real estate property titles I.e the physical goods do not move but the title of the goods move and are transferred.

Stock Exchanges are responsible to ensure that all the rightful purchases and sales are compensated properly and adequately. Hence, there are no bad titles or counter party risks when dealing through stock exchanges.

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