Securities Markets

Abstract

Securities market provides opportunities for investors to buy and sell shares. They also enable the government, companies and institutions to acquire funds through the sale of shares. For many years, global securities market realized several changes with an aim of delivering improved services to clients. Through the achievement of the essential requirements, securities markets structures are considered as the structures that are dominant in trade execution. Investors who buy a company shares as considered as the owners and gain part of the profits as dividend. They also have the voting rights depending on the volume of their shares.

Investors are interested with a market that is liquid without any cost or transactions delays. Brokers assist investors in various ways such as offering loan services and buying or selling shares on behalf of the investors. They become partners and develop a mutualrelationship where the broker benefits from a commission charged on the transactions. The main aim of an investor is to generate profits through conducting various transactions. However, it is notable that the process may sometime fail to generate the expected return within the stipulated period. For an investor to generate funds through transacting shares and bonds, he must make effective market prediction and determine the future trend. Errors in prediction are likely to cost the investor large volumes of losses.

Introduction

Securities Market refers to an economic institute where security trading occurs through stockbrokers. It is also considered as the interconnection system where favorable conditions for trade are enhanced (Gode & Sunder, 1993). Securities market is also responsible in transferring real asset into financial asset. It also invests money for both long-term and short-term periods aiming to gain profits. The Securities and Exchange Commission regulates securities markets. Issuing of securities takes place in the primary market. However, all transactions are effected in the secondary markets.

An investor who is willing to buy stock has a high probability of not purchasing during the IPO (Gode & Sunder, 1993). He will instead purchase from the market. Therefore, in securities markets, buyers hardly meet the sellers. The stock exchange firms such as the New York Exchange do buy and sell stocks on behalf (Arnett, 2011). However, trading on both sides is not automatic. Companies willing to trade in the stock exchange must write an application forms so that their securities are accepted to trade. If such a company meets the required conditions, then its securities are listed in the market (Keim & Ziemba, 2000). There are other public corporations with securities, but their shares do not appear in any Exchange list. Such securities are transacted over-the counter. An example of an over-the