How Does The Secondary Market Work In A Stock Exchange?When a company is listed on a stock exchange, it's price in the secondary market influences the amount of funds that can be raised by issuing additional stock in the primary market. Corporate managers also pay attention to the price of the company’s stock in secondary market because it has an impact upon the financial wealth of the corporation’s owners: the stockholders. If the price of the stock rises, then the stockholders become wealthier. Typically, managers own only small amounts of a corporation’s outstanding shares, relative to the size of the company. Most corporate managers also receive options to buy company stock at a selected price, so they are motivated to increase the value of the stock in the secondary market. A stock exchange encourages investment by providing this secondary market. Stock exchanges also encourage investment in other ways. They protect investors by upholding rules and regulations. These rules ensure buyers will be treated fairly and receive exactly what they pay for. They also support cutting edge technology and the business of brokering. This support helps traders buy and sell securities quickly and efficiently. Being able to sell a security in the secondary market increases the relative safety of investing. This is because investors can sell a stock that may be on the decline or that faces an uncertain future. Would you like to learn more about trading? You would? Great! Then please click here for an excellent
free online trading video
We Recommend: Finance Blog | Trading Software | Find Stockbrokers Return To Our Homepages: Stock Market | Investment-For-Beginners |