Stock Market. Concept And Status

　　 The stock market, also known as the two level market or secondary market, is the place where the stock is issued and circulated. It also refers to the place for the sale and transfer of the issued shares. Stock transactions are realized through the stock market. Generally speaking, the stock market can be divided into one or two levels, the first level market is also known as the stock issuing market, and the two level market is also called the stock exchange market.

As we have said, stock is a kind of negotiable securities. In addition to stocks, securities include state bonds, corporate bonds, real estate mortgage bonds and so on. State bonds appeared earlier and were the first bond to be traded. With the development of commodity economy, stock and other valuable bonds came into being gradually. Therefore, stock trading is only an integral part of the bond transaction, and the stock market is only one of many kinds of bond market. At present, there are few single stock markets, but the stock market is only a place where stocks are exclusive.

Stock market is one of the main ways to raise funds for listed companies. With the development of commodity economy, the scale of the company is bigger and bigger, and it needs a lot of long-term capital. If we rely solely on the capitalization of the company itself, it is difficult to meet the needs of production and development, so we must raise funds from the outside. There are three ways to raise long-term capital: first, borrowing from banks; two, issuing corporate bonds; and three issuing stocks. The interest of the first two ways is higher and has time limit, which not only increases the operating cost of the company, but also makes the capital of the company difficult to stabilize, so it has great limitations. And the way to raise funds by issuing shares is not required to repay principal and interest, but only to allocate part of the profits to pay dividends. By comparing these three ways of financing, the way to issue shares is undoubtedly the most economic principle, which is most beneficial to the company. Therefore, raising capital by issuing shares becomes an important form of developing large enterprises' economy, and stock trading occupies a very important position in the entire securities transaction.

The change of the stock market is closely related to the development of the market economy. The stock market always plays a barometer of the economic situation in the market economy.