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Stockholders And The Stock Exchange

When an individual invests money into the stock exchange, he or she buys stocks (or shares / equities). These are shares of part ownership in companies. People who buy a company’s stock may receive dividends (a portion of any profits).

Owners are entitled to any gain in capital that is made. This capital gain may be made by buying and selling at an increased price or simply by buying and holding, long term a business which is growing.

However, stockholders also face risks. These take the form of business and market risks. A firm may experience losses due to a downturn in business and not be able to continue the payment of dividends. Alternatively capital losses may occur when the stockholder sells shares at a price below the purchase price.

A company can list its stock on only one major stock exchange. However, options on its stock may be traded on another exchange. Where a stock is traded depends on both the requirements of the exchange and the decision of the corporation. Each exchange establishes requirements that a company must meet to have its stock listed.

The different exchanges tend to attract different kinds of companies. Some stock exchanges, such as the Nasdaq, typically trade the stock of small, emerging businesses, such as high-tech companies. In the USA, the AMEX lists small to medium-sized businesses, including many oil and gas companies. The NYSE primarily lists large, established companies.

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To see more pages which discuss the background issues relating to the stock exchange, please use the following links:

Stock Exchange Information

What Is An Efficient Capital Market?

Stock Exchanges And The National Economy

The Stock Exchange Secondary Market

Investment Institutions On The Stock Exchange

Executing A Trade On The Stock Exchange

Stock Exchange Scandals

Increased Regulations - The Sarbanes Oxley Act

Investing In A Stock Exchange

Learn About The Important Role Of Stock Rating Agencies

How Big Should Stock Market Bonuses Be?

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