Markets - StockMarkets - Stocks - Market - Market Participants - Market Makers

http://www.1mtx.com/markets-trades/en/index.php?language=en&menu=MARKETS&punkt=Stock&punkt2=Stocks&index=Market#StocksMarket Stock: In financial terminology, stock is the capital raised by a corporation, through the issuance and sale of shares. A shareholder is any person or organization which owns one or more shares of a corporation's stock. STOCKS: Market A stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded privately. Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... The size of the stock market is estimated at about $51 trillion. The world derivatives market has been estimated at about $480 trillion face or nominal value, 30 times the size of the U.S. economy…and 12 times the size of the entire world economy. Latest Updates... Major Stock Exchanges : NYSE Euronext Tokyo SE NASDAQ OMX London LSE Shanghai SSE HongKong HKEx Toronto TSX Boerse Frankfurt ...more at Stock Exchanges A - Z Latest Updates... ...The stocks are listed and traded on stock exchanges which are entities a corporation or mutual organization specialized in the business of bringing buyers and sellers of stocks and securities together. Purpose The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity. » more (Relation of the stock market to the modern financial system) Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Market Participants STOCK MARKET: Participants in the stock market range from small individual stock investors to large hedge fund traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes the order. Photo: Julie Dermansky - NYSE New York Stock Exchange - Oct 2008. Participants in the stock market range from small individual stock investors to large hedge fund traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes the order. Really, a stock exchange is nothing more than a "super-sophisticated farmers' market" providing a meeting place for buyers and sellers. A potential buyer bids a specific price for a stock and a potential seller asks a specific price for the stock. (Buying or selling at market means you will accept any bid or ask price for the stock.) When the bid and ask prices match, a sale takes place on a first come first serve basis if there are multiple bidders or askers at a given price. Many years ago, worldwide, buyers and sellers were individual investors, such as wealthy businessmen, with long family histories. Over time, markets have become more "institutionalized"; buyers and sellers are largely institutions (e.g., pension funds, insurance companies, mutual funds, hedge funds, investor groups, and banks). The rise of the institutional investor has brought with it some improvements in market operations. » Institutional investors (wikipedia) » Hedge funds (wikipedia) Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Market Makers A market maker is a firm that stands ready to buy and sell a particular stock on a regular and continuous basis at a publicly quoted price. You'll most often hear about market makers in the context. Photo: Julie Dermansky - Oct 2008. A Market Maker is a firm that stands ready to buy and sell a particular stock on a regular and continuous basis at a publicly quoted price. You'll most often hear about market makers in the context of the Nasdaq or other "over the counter" (OTC) markets. Market makers that stand ready to buy and sell stocks listed on an exchange, such as the New York Stock Exchange, are called "third market makers." Many OTC stocks have more than one market-maker. In the USA, the New York Stock Exchange (NYSE) and American Stock Exchange (AMEX) have a single exchange member, known as the "specialist," that acts as the official market maker for a given security. In return for providing a required amount of liquidity to the security's market, being on the other side of trades when there are short-term buy-and-sell-side imbalances in customer orders, and attempting to prevent excess volatility, the specialist is granted various informational and trade execution advantages. Other U.S. exchanges (most prominently the NASDAQ Stock Exchange) employ several competing official market makers in a security. These market makers are required to maintain two-sided markets during exchange hours and are obligated to buy and sell at their displayed bids and offers. They typically do not receive the trading advantages a specialist does, but they do get some, such as the ability to naked short a stock, i.e. selling it without a borrow. In most situations only official market makers are permitted to engage in naked shorting. » Market Maker (SEC.gov) » A Market Maker's Perspective (by Don Bright - traders.com) Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Trading Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Actual trades are based on an auction market paradigm where a potential buyer bids a specific price for a stock and a potential seller asks a specific price for the stock. (Buying or selling at market means you will accept any bid or ask price for the stock.) When the bid and ask prices match, a sale takes place on a first come first serve basis if there are multiple bidders or askers at a given price. The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery. The New York Stock Exchange is a physical exchange, where much of the trading is done face-to-face on a trading floor. This is also referred to as a "listed" exchange (because only stocks listed with the exchange may be traded). The NASDAQ is a virtual (listed) exchange, where all of the trading is done by computers. The process is similar to the above, in that the seller provides an asking price and the buyer provides a bidding price. However, buyers and sellers are electronically matched. The Paris Bourse, now part of Euronext is an order-driven, electronic stock exchange. It was automated in the late 1980s. Before, it consisted of an open outcry exchange. Stockbrokers met in the trading floor or the Palais Brongniart. In 1986, the CATS trading system was introduced, and the order matching process was fully automated. » Trading Volume Leaders (USA) Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top The Behavior of the Stock Market From experience we know that investors may temporarily pull financial prices away from their long term trend level. Over-reactions may occur—so that excessive optimism (euphoria) may drive prices unduly high or excessive pessimism may drive prices unduly low. New theoretical and empirical arguments have been put forward against the notion that financial markets are efficient. According to the Efficient Market Hypothesis (» EMH), only changes in fundamental factors, such as profits or dividends, ought to affect share prices. (But this largely theoretic academic viewpoint also predicts that little or no trading should take place—contrary to fact—since prices are already at or near equilibrium, having priced in all public knowledge.) But the efficient-market hypothesis is sorely tested by such events as the stock market crash in 1987, when the Dow Jones index plummeted 22.6 percent—the largest-ever one-day fall in the United States. This event demonstrated that share prices can fall dramatically even though, to this day, it is impossible to fix a definite cause: a thorough search failed to detect any specific or unexpected development that might account for the crash. It also seems to be the case more generally that many price movements are not occasioned by new information; a study of the fifty largest one-day share price movements in the United States in the post-war period confirms this. Moreover, while the EMH predicts that all price movement (in the absence of change in fundamental information) is random (i.e., non-trending), many studies have shown a marked tendency for the stock market to trend over time periods of weeks or longer. Various explanations for large price movements: Changes in estimated risk, and the use of certain strategies, such as stop-loss limits and Value at Risk limits, theoretically could cause financial markets to overreact. Psychological factors may result in exaggerated stock price movements. Psychological research has demonstrated that people are predisposed to 'seeing' patterns, and often will perceive a pattern in what is, in fact, just noise. (Something like seeing familiar shapes in clouds or ink blots.) In the present context this means that a succession of good news items about a company may lead investors to overreact positively (unjustifiably driving the price up). A period of good returns also boosts the investor's self-confidence, reducing his (psychological) risk threshold. Group thinking: As social animals, it is not easy to stick to an opinion that differs markedly from that of a majority of the group. An example with which one may be familiar is the reluctance to enter a restaurant that is empty; people generally prefer to have their opinion validated by those of others in the group. Analogy with gambling: In normal times the market behaves like a game of roulette; the probabilities are known and largely independent of the investment decisions of the different players. In times of market stress, however, the game becomes more like poker (herding behavior takes over). The players now must give heavy weight to the psychology of other investors and how they are likely to react psychologically. Irrational behavior Sometimes the market tends to react irrationally to economic news, even if that news has no real effect on the technical value of securities itself. Therefore, the stock market can be swayed tremendously in either direction by press releases, rumors, euphoria and mass panic. Over the short-term, stocks and other securities can be battered or buoyed by any number of fast market-changing events, making the stock market difficult to predict. » ADVANCES & DECLINES (USA) Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Crashes A stock market crash is often defined as a sharp dip in share prices of equities listed on the stock exchanges. In parallel with various economic factors, a reason for stock market crashes is also due to panic. Often, stock market crashes end up with speculative economic bubbles. There have been a number of famous stock market crashes like the Wall Street Crash of 1929, the stock market crash of 1973–4, the Black Monday of 1987, the Dot-com bubble of 2000. But those stock market crashes did not begin in 1929, or 1987. They actually started years or months before the crash really hit hard. One of the most famous stock market crashes started October 24, 1929 on Black Thursday. The Dow Jones Industrial lost 50% during this stock market crash. It was the beginning of the Great Depression. » more (Wall Street Crash of 1929) Another famous crash took place on October 19, 1987 – Black Monday. On Black Monday itself, the Dow Jones fell by 22.6% after completing a 5 year continuous rise in share prices. This event not only shook the USA, but quickly spread across the world. Thus, by the end of October, stock exchanges in Australia lost 41.8%, Canada lost 22.5%, Hong Kong lost 45.8% and Great Britain lost 26.4%. » more (Black Monday 1987) » more (Dot-com bubble) Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top » ...more Links ! » more Links History of stock exchanges ...In 11th century France the courtiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. As these men also traded in debts, they could be called the first brokers. ... » more (wikipedia) Market Manipulation or doing their job? Do Market Makers manipulate the market? How Do Market Makers make their money? ... Do Market Makers try to reduce volatility? » more (Market Maker FAQ v1.0) Stock trader A stock trader or a stock investor is an individual or firm who buys and sells stocks or bonds (and possibly other financial assets) in the financial markets.... » more (Stock trader versus stock investor) Stock selection criteria Stock selection criteria is a strategy in which an analyst or investor uses a systematic form of analysis to determine if a particular stock constitutes a good investment which should be added to their portfolio. The objective of stock selection criteria is maximizing total return on investment (appreciation plus any dividends received) for the target holding period, subject to limiting risk to acceptable levels, and maintaining a targeted degree of portfolio diversification. The position can be either long or short, depending on the analyst or investor's outlook for the particular stock's price. It is widely acknowledged that a disciplined stock selection approach was one of the primary factors behind the success of well-known investors like Warren Buffet and Peter Lynch. Several systematic stock picking approaches have been proposed and evaluated. Some of these approaches can be automated in the form of automated screens... » more (Stock picking: Selection Components - Sector- and Quantitative Cumulative Value Analysis) Stock Screening Morningstar Stock Screener... » Stock Screener (Morningstar.com) Stock Picking: Rules of Thumb Fund manager Peter Lynch in his two best-selling investment books entitled One up on Wall Street (1989) and Beating the Street (1993) has outlined several strategic rules of thumb or criteria that should be evaluated when considering a particular security investment... » more (Market Cap - PEG Ratio < 1.2 - Earnings Growth 15-30% - Debt Ratio < 35% - Institutional Ownership 5-65% - Dividend Yields - Cyclical Stocks) Stock Selection Effectiveness In A Random Walk Down Wall Street, Burton Malkiel (b. 1932), an economist from Princeton University, argues that asset prices typically exhibit signs of random walk and that one cannot consistently outperform market averages. ... » more (wikipedia) Market capitalization ...Market capitalization, often abbreviated to market cap, is a measurement of corporate size that refers to the current stock price times the number of outstanding shares. ... » Market cap (www.1mtx.com) STOCKS GLOSSARY A - Z Terms - Definitions - Exchanges Major Trade Exchanges Europe - Africa/M.E. - Asia/Pacific - Americas - USA Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top ...| Reports | Analysis | Opinions | Comments |... | Reports | Analysis | Opinions | Comments | Stocks vs. Bonds - Are You Listening? Where are we in the relative strength between stocks and bonds? We will assume that the effect of coupon interest and stock dividends are built into the current prices. The following ratio chart gives us some indication in terms of stocks relative strength. We have chosen to relate the Nasdaq 100 to the 30 year Treasury Bond.... Read more » (by Greg Miller - Safehaven.com; November 13, 2005) A Random Walk Down Wall Street An Excerpt All investment returns — whether from common stocks or exceptional diamonds — are dependent, to varying degrees, on future events. That's what makes the fascination of investing: It's a gamble whose success depends on an ability to predict the future. ... Read more » (wwnorton.com) The stock market, individual investors, and financial risk With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all overtalking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly. ... Read more » (quote: Warren Buffett) Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Bolsa de Madrid - Stock Exchange in Madrid, Spain Bolsa de Madrid Take a break... ...Take a Break...Just Relax... » Slideshow: StockExchange (flickr.com) Wallstrip - Vice Stocks ...just relax... Floor Trading at the NYSE New York Stock Exchange. Photo: Julie Dermansky - Oct 2008 New York Stock Exchange ADVERTISEMENT Purpose Market Participants Market Makers Trading Behavior Crashes » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Sources: Wikipedia; Safehaven.com; BBC Business .1MTX 2007/2008