Stocks, bonds and other securities are traded in a stock market.
The securities market is an entity that provides the framework to establish negotiations linked to income, both fixed and variable, through purchase and sale operations focused on any type of negotiable security.
The social institution that arises when a link begins between offerors (better known as sellers) and potential demanders (that is, buyers), which interact with the purpose of carrying out exchanges, transactions or agreements, is known as a market .
A value , on the other hand, is something that has an estimate. The term, in an economic or financial sense, is used as a synonym for title or action (to mention, in this framework, the rights as owner that someone has in relation to a certain company).
How the stock market works
In a securities market, both bidders and demanders trade securities (which can range from shares or securities to bonds, among others) after accessing reliable information about the states of the companies. The functioning of the stock market allows savings and investment to be channeled.
The issuers of securities obtain financial resources from the public offering, while those who buy these securities can achieve profits either by reselling the shares or by collecting dividends (an amount that is paid in proportion to the securities held. with the profits generated by the company).
It should be noted that the stock market uses various procedures and systems that guarantee its transparency . In this way, it is assumed that there will be no one who can use their power to distort the price of securities. It is essential, therefore, that information circulates freely and is truthful.
Stock markets are regulated to protect investors.
The Tokyo example
The Tokyo stock market is the second most important in the world, and the largest in Asia , and is dedicated to trading exclusively in shares and securities, both convertible and those that give the right to acquire or subscribe.
To carry out its negotiations, it relies on a computer-assisted order management and execution system , known by the acronym CORES . More than 2 thousand companies from around the world are listed on it, undoubtedly highlighting technology and automobile companies. These include vehicle manufacturing leaders Honda and Toyota , the powerful and versatile Pioneer and Sony , electronics component manufacturers Kyocera , TDK and Fanuc , digital imaging leader Canon and security specialists Secom .
The National Securities Market Commission of Spain
In each country there is an entity that is dedicated to supervising the activities of the stock market, as is the case of Spain , for example, and its National Securities Market Commission ( CNMV ), which has been in force since 1988 . In all cases, its main objective is to ensure the legitimacy of transactions and protect investors. It is worth mentioning that the amount of data that must be analyzed to carry out its activities is freely accessible to citizens.
Speaking specifically of the Spanish CNMV , this body carries out intense work of an international nature, which mainly consists of participating in the societies that bring together those who regulate and supervise securities, such as the International Organization of Securities Commissions , and the groups that They cover various sectors, such as insurance and banking services, both nationally, continentally and globally.
On the other hand, its powers also include advice and the provision of services to national authorities to improve their collaboration with the bodies of the European Union ; Through training programs, it ensures an updated outlook and encourages the different securities market entities to modernize, thus promoting their growth.