Community Forex Questions
What are the basic rules of stock exchange?
The stock exchange operates on a set of fundamental rules to ensure fairness, transparency, and efficiency in trading. Here are the key principles:
Regulated Market – Stock exchanges are regulated by financial authorities (e.g., SEC in the U.S., SEBI in India) to prevent fraud, insider trading, and market manipulation.
Listing Requirements – Companies must meet specific criteria (financial health, governance standards) to list their shares on an exchange.
Buying & Selling Orders – Trading follows a bid (buy) and ask (sell) system. Orders are matched electronically, ensuring fair price discovery.
Settlement Cycle – Trades are settled within a fixed period (e.g., T+1 or T+2), meaning payment and share transfer happen after the trade date.
Circuit Breakers – Exchanges implement trading halts or limits during extreme volatility to prevent panic selling or irrational surges.
Disclosure & Transparency – Companies must disclose financial reports and material information promptly to keep investors informed.
Brokerage & Fees – Investors must trade through licensed brokers, who charge commissions or fees for executing trades.
No Insider Trading – Using non-public information for trading is illegal and punishable by law.
By following these rules, stock exchanges maintain investor confidence and ensure smooth market operations.
Regulated Market – Stock exchanges are regulated by financial authorities (e.g., SEC in the U.S., SEBI in India) to prevent fraud, insider trading, and market manipulation.
Listing Requirements – Companies must meet specific criteria (financial health, governance standards) to list their shares on an exchange.
Buying & Selling Orders – Trading follows a bid (buy) and ask (sell) system. Orders are matched electronically, ensuring fair price discovery.
Settlement Cycle – Trades are settled within a fixed period (e.g., T+1 or T+2), meaning payment and share transfer happen after the trade date.
Circuit Breakers – Exchanges implement trading halts or limits during extreme volatility to prevent panic selling or irrational surges.
Disclosure & Transparency – Companies must disclose financial reports and material information promptly to keep investors informed.
Brokerage & Fees – Investors must trade through licensed brokers, who charge commissions or fees for executing trades.
No Insider Trading – Using non-public information for trading is illegal and punishable by law.
By following these rules, stock exchanges maintain investor confidence and ensure smooth market operations.
Apr 21, 2025 02:40