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What is a Stock Market Index? | by Wall Street Survivor

 

Difference between Stock Market and Stock Exchange

In spite of the fact that the expressions “stock exchange” and “stock market” are to some degree compatible in typical discussion, there are a few distinctions in the implications of the terms. Stock market is an expansive element covering an extensive variety of business sector exercises and organizations. The stock exchange is one piece of the stock market’s framework.

 

Stock Market

A stock exchange or value business is the total of purchasers and venders (a free system of financial exchanges, not a physical office or discrete substance) of stocks (likewise called shares); these may incorporate securities recorded on a stock trade and those just exchanged secretly.

Stocks can be classified in different ways. One way is, by the nation where the organization is domiciled. For instance, Nestlé and Novartis are domiciled in Switzerland, so they may be considered as a feature of the Swiss stock market.

 

Stock Exchange

A stock exchange is a trade or securities exchange where stock merchants and brokers can purchase and/or offer stocks (likewise called shares), bonds, and different securities. Stock trades might likewise give offices to issue and recovery of securities and other money related instruments, and capital occasions as well as the payment of dividend and income.

Securities exchanged on a stock trade incorporate stock issued by recorded organizations, unit trusts, subsidiaries, pooled speculation items and securities. Stock trades frequently work as “continuous auction” markets, with purchasers and dealers fulfilling exchanges at a focal area, for example, the floor of the trade.

 

Stock Market VS Stock Exchange

In general discussion the expressions “stock exchange” and “stock market” are regularly traded but there exists differences between them that are explained below

• Identification:

 “Stock market” is the common term to discuss the sorted out exchanging of stocks. The stock market incorporates stock exchanges, electronic exchanging frameworks and over-the-counter (OTC) market.

A stock exchange is an organization or association that advances the exchanging of stocks through posting administrations and prerequisites, devices to unite purchasers and merchants, and frameworks to track costs and deals information.

• System:

Without a stock exchange, organizations would have no formal system on which to rundown offers,

Without a stock market, trades would have no motivation to exist.

• Types:

The two noteworthy stock exchanges in the U.S. are the New York Stock Exchange (NYSE) and the NASDAQ stock trade. These are classified as stock exchanges. The stock exchanges are the area for the greater part of securities exchange action. Stocks can likewise exchange on the OTC business sector and electronic interchanges systems (ECNs).

The elements discussed above leads to make up of stock market.

• Importance:

The stock exchanges have posting necessities for organizations to list their stocks and to stay recorded. Most individual and institutional financial specialists purchase just trade recorded stocks, so it is vital for organizations to be trade recorded on the off chance that they need to develop their reasonable worth. Stock exchange is made up by an association that promotes stock trading.

Whereas, stock market is made up the mainstream of stock exchanging volume and estimation of stocks. A stock market is general term for all types of stock trading.

• Purpose:

Stock exchanges work under a profit intention.

Though, securities markets are just broad meeting spots for stock dealers to lead exchanging activities.

• Consideration:

The stock exchanges are discrete organizations that advance the precise stream of stock purchasing and offering.

The stock market is all stock exchanging through different parkways. Speculators are more inspired by the consequences of individual stocks, common and trade exchanged stores, and the different stock market lists.

• Clearing House:

Stock exchanges also work like clearing house which helps to eradicate the risk factor to the buyer and seller.

Stock market doesn’t work as a clearing house.

• History:

The concept of stock exchange was started from the mid of 1500’s.

Though, the first stock market founded in 1600’s but the concept started from 13^th century.

 

Conclusion

From above discussion we come to know that stock market is a wider concept and stock exchange is a part of stock market.