The Stock Exchange

Stock Exchange is an organized open market for buying and selling financial commodities, known as securities, such as shares or stocks, debentures, bonds, options, and futures. It is also known as the stock market. We can in Nepali call the Stock Exchange, a Haat Bazaar, where Brokers, who are the representatives of the shareholders come together for buying and selling their ownership or debts of companies. The stock exchange is also an authority to supervise and regulate the trading.
Stock exchange plays an important role in the economy by providing a place for buyers and sellers to trade securities, stocks, bonds, and other financial instruments.
It is also called the secondary market, the primary market being the first issue of the shares and bonds. In the secondary market investors, who buy and sell stocks and not the companies, earn the profits or bear the losses resulting from their trades. The investors also earn from the companies whose shares they hold, in the form of dividends paid out by the company from their earnings. Stock exchanges encourage investment by providing this secondary market and increase the safety of investing.
In the Stock Exchange, the buyers and sellers do not participate directly in the transactions but place their buying or selling order to a Stock Broker who carries out the transaction in the Stock Exchange for nominal fees of approximately 1.5% on each transaction.
Companies issue new shares or securities in the primary market usually with the help of investment agencies, investment bankers. In the primary market, companies receive the proceeds of stock sales. Thereafter, they are not involved in the trading of stocks. Owners of stocks trade them in the Stock Exchange in the secondary market.