WHAT IS THE STOCK MARKET?

Or, more exactly, than the stock market. The stock market is part of the financial systemand it is formed by a few assets and a few intermediaries that are in charge of communicating sellers of these assets and interested buyers in acquiring them

The stock market is a form that the companies have and the State to be financed by the investment of the thifty persons. in the Stock Exchange, we can find the primary market and the secondary market.

We know the primary market also as an emission market.

There, the companies express and sell shares of their own business. We call them to these shares actions. And we call it to the flotation to go out for Stock Exchange. This the companies usually do it across a sale share offer. When the companies go out for Stock Exchange they sell a part of himself to obtain money. On the secondary market there are negotiated the values that have been created on the primary market.

It is a market of negotiation where the investors can buy and sell actions and other products between themselves. If the secondary market did not exist, the primary market might not work since the investors would not like to buy a few actions that then they might not sell.

The name of the Stock Exchange comes from a building that belonged to the family Büerse Goes der, in the Belgian city of Bruges. There, in the XIIIth century, meetings of mercantile character were realized. The years happened and the name stayed. That's why, to the places where values deals are realized they are known like Stock Exchanges. The Stock Exchange fulfills three functions inside the economic system It serves to give liquidity to the investors when these buy and sell actions. It serves like financing source for the companies that come to her. It serves as thermometer of the economy. Because before deciding on actions of one or another company, the investors analyze the march of the economic situation and try to predict its future behavior.

So that the stock market flows, there are necessary a few investors, a few intermediaries and a few institutions. The investors differ in the level of risk that they assume. There are short-term investors who assume a high risk looking for the maximum profitability. There are long-term investors who look for its profitability in the dividends, the increases in capital and the revaluations of its actions. The intermediaries are the societies and the agencies of values and Stock Exchange. They are in charge of activating the operations on the secondary market. Between the institutions we find the companies and the State, that are financed thanks to the Stock Exchange and the entities of control like the Spanish Bank and the CNMV.

The CNMV is the National Commission of the Stock market. It is the big authority of the stock market. It supervises and inspects the stock market and the activities that develop in the Stock Exchange. He looks over the transparence of the markets, over the correct formation of the prices and over the safety of the investors. It advises the Government, the Department of Economy and Treasury Department and the Autonomous regions. He proposes different measurements and dispositions on the stock market and spreads the information that is generated. Quite so that the stock market works correctly.