Understanding Stock Exchange
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Mention the word “Wall Street” and images of the bustling New York or American Stock Exchange come to mind.
While these are the two largest US exchanges, they certainly aren’t the only ones. In fact, there are a dozen national and regional stock exchanges that do business daily in the United States. That doesn’t include the enormous number of shares traded over the counter (OTC) on the NASDAQ. Basically, an exchange is a place where buyers and sellers get together, either in person or electronically, to trade stocks, bonds, commodities, options, futures contracts and other securities. Exchange provide liquidity; that is, they offer investors the opportunity to buy and sell shares, at their fair market values.
The market for shares and other securities is virtually identical in the concept to the traditional public market where growers display produce on counters and consumers come to buy; only the products are different.
The New York Stock Exchange, sometimes called the “Big Board,” is the dominant market by exchanges, including many of the oldest and largest corporations, that trade there. Founded in 1792 as the New York Stock & Exchange Board, the NYSE lists thousands of companies whose securities are traded under its rule and regulation.
Member firms, brokerages and securities dealers own the NYSE. Memberships, or seats, on the exchanges trade at auction like the shares of other corporations. These seats, which can cost hundreds of thousands of dollars, permit their owner to buy or sell shares on the trading floor, either for themselves or for their clients.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
