Concetti Chiave
- The Stock Exchange facilitates the buying and selling of shares and bonds, dividing a company's capital into equal units called shares.
- Investing in shares presents both opportunities for profit and risks of loss, especially if share values decline or company profits are absent.
- Stock trading occurs globally 24/7, with brokers assisting investors in buying or selling shares; market trends are categorized as bear (falling prices) or bull (rising prices).
- The London Stock Exchange, a major global market, evolved significantly since its formation in 1801, notably with the Big Bang reforms of 1986 and its merger with Borsa Italiana in 2007.
- The New York Stock Exchange, established in 1792, is now based in Wall Street and has embraced electronic trading since 2007, with over half of orders processed electronically.
The Stock Exchange is the center where shares and bonds are bought and sold.
The capital of a company is divided in shares, the result of dividing the capital invested in a company into equal units.
What are the Risks and Opportunities of Investments?
People buy shares because they hope to make a profit by selling then after their value has risen.
However there are risks involved: shareholders risk a loss if value of the shares goes down or if there are no company profit to be divided, in which case they receive nothing. A bond is a document issued by a government or company when borrowing money from the public. The holder of the document is called bondholder.
Functioning and Intermediaries of the Market
Trading on the Stock Exchange take place 24 hours a day in the main trading centers of the world, and as one market closes, another opens.
When an investor wants to buy and sell shares he needs the assistance and advice of an intermediary, a broker-dealer, who buy and sells shares for the investor. An investor can be a bear or a bull about a particular kind of stock.
The term bear market describes a time when stock prices are generally falling. A bull market is a period when stock prices are generally rising.
History and Evolution of the London Stock Exchange
The London Stock Exchange is on of the major Stock exchange in the world. In 1801 the London Stock Exchange was formed and become the accepted place to buy and sell shares. The structure of the London Stock Exchange changed on 27 October 1986, day know as the Big Bang, when it become known as the international Stock Exchange. Since then soe rules were changed:
Were abolished fixed commissions a new system of free competition was started, all firms became broker/dealers that could buy shares from or sell them to clients, without the need of an intermediary and trading stopped being conducted face-to-face on a market floor and was performed via computer and telephone from separate dealing rooms. In 1997 a computerized dealing system called the Stock Exchange Automated Quotation was introduced. In 2007 the London Stock Exchange merged with Borsa Italiana, creating Europe's leading equity platform.
Origins and Development of the New York Stock Exchange
The New York Stock Exchange's history dates back to 1792, when 24 brokers subscribed an agreement, forming the first organised stock market in New York. Now its based in Wall Street and was opened in 1922. One of the worst moments of the New York stock Exchange, was the Great crash which took place in October 1929. Since 2007 all New York Stock Exchange can be traded using its electronic Hybrid market. More than 50% of all orders are now delivered electronically.
Domande da interrogazione
- What are the main risks and opportunities associated with investing in shares?
- How does trading on the Stock Exchange operate globally?
- What significant changes occurred in the London Stock Exchange on the day known as the Big Bang?
- How has the New York Stock Exchange evolved since its inception?
Investing in shares offers the opportunity to make a profit if the value of shares rises. However, there are risks, such as the potential for loss if share values decrease or if the company does not generate profits to distribute to shareholders.
Trading on the Stock Exchange occurs 24 hours a day across major global trading centers. As one market closes, another opens, allowing continuous trading. Investors typically require the assistance of a broker-dealer to buy and sell shares.
On 27 October 1986, known as the Big Bang, the London Stock Exchange underwent significant changes, including the abolition of fixed commissions, the introduction of free competition, and the shift from face-to-face trading to electronic and telephone-based trading.
The New York Stock Exchange began in 1792 and has evolved significantly, including the introduction of an electronic Hybrid market in 2007, which allows more than 50% of orders to be delivered electronically. It is now based in Wall Street, having opened there in 1922.
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