Difference between Stock Market, Stock Exchange and Market Trend

In spite of the fact that the expressions “stock exchange” and “stock market” are to some degree compatible in typical discussion, there are a few distinctions in the implications of these terms. Stock market is an expansive element covering an extensive variety of business sector exercises and organizations. The stock exchange is one piece of the stock market’s framework. Market trend is the probable tendency of shift in financial markets over time.

Stock Market

A stock exchange or value business is the total of purchasers and vendors (a free system of financial exchanges, not a physical office or discrete substance) of stocks (likewise called shares). These may incorporate securities recorded on a stock trade and those just exchanged secretly.

Stocks can be classified in different ways. One way is by the nation where the organization is domiciled. For instance, Nestlé and Novartis are domiciled in Switzerland, so they may be considered as a feature of the Swiss stock market.

Stock Exchange

A stock exchange is a trade or securities exchange where stock merchants and brokers can purchase and/or offer stocks (likewise called shares), bonds, and different securities. Stock trades might likewise give offices to issue and recovery of securities and other money related instruments, and capital occasions as well as the payment of dividend and income.

Securities exchanged on a stock trade incorporate stock issued by recorded organizations, unit trusts, subsidiaries, pooled speculation items and securities. Stock trades frequently work as “continuous auction” markets, with purchasers and dealers fulfilling exchanges at a focal area, for example, the floor of the trade.

Market Trend

A market trend is classified as the tendency of financial markets, like the stock market, to move in a particular direction over a period of time. Statisticians use technical analysis to predict price tendencies within the financial markets.

Market can follow two trends: “bull market” or “bear market”. “Bull market” refers to the upward market trends, whereas “bear market” refers to the downward market trends.

Stock Market vs. Stock Exchange vs. Market Trends

In general discussion the expressions “stock exchange” and “stock market” are regularly traded but there exists differences between them that are explained below

Identification

“Stock market” is the common term to discuss the sorted out exchanging of stocks. The stock market incorporates stock exchanges, electronic exchanging frameworks and over-the-counter (OTC) market.

A stock exchange is an organization or association that advances the exchanging of stocks through posting administrations and prerequisites, devices to unite purchasers and merchants, and frameworks to track costs and deals information.

Market trends give information on the future of stocks. It predicts the rise or decrease expected in stock market in coming time.

System

Without a stock exchange, organizations would have no formal system on which to rundown offers.

Without a stock market, trades would have no motivation to exist.

Without knowledge of market trends, traders and stocks shall have no direction. The whole stock market shall collapse because there will be no predictions without market trends.

Types

The two noteworthy stock exchanges in the U.S. are the New York Stock Exchange (NYSE) and the NASDAQ stock trade. These are classified as stock exchanges. The stock exchanges are the area for the greater part of securities exchange action. Stocks can likewise exchange on the OTC business sector and electronic interchanges systems (ECNs).

The elements discussed above leads to make up of stock market.

Market trends can follow a rise in stocks which is called as “bull market”. A fall in value of stocks leads to “bear market” trend.

Importance

The stock exchanges have posting necessities for organizations to list their stocks and to stay recorded. Most individual and institutional financial specialists purchase just trade recorded stocks, so it is vital for organizations to be trade recorded on the off chance that they need to develop their reasonable worth. Stock exchange is made up by an association that promotes stock trading.

Whereas, stock market is made up the mainstream of stock exchanging volume and estimation of stocks. A stock market is general term for all types of stock trading.

Market trends analysis is important as it helps to know which stocks are expected to move up and how much risk is along the way with certain shares. Studying market trends is like performing a research before making an investment. It helps in getting maximum returns.

Purpose

Stock exchanges work under a profit intention.

Though, securities markets are just broad meeting spots for stock dealers to lead exchanging activities.

Market trends work for an informative purpose. Their purpose is to predict value of shares for better rewards on investment.

Consideration

The stock exchanges are discrete organizations that advance the precise stream of stock purchasing and offering.

The stock market is all stock exchanging through different parkways. Speculators are more inspired by the consequences of individual stocks, common and trade exchanged stores, and the different stock market lists.

Clearing House

Stock exchanges also work like clearing house which helps to eradicate the risk factor of the buyer and seller.

Stock market doesn’t work as a clearing house.

History

The concept of stock exchange was started from the mid of 1500’s.

Though, the first stock market founded in 1600’s but the concept started from 13^th century.

Market trends analysis is as old as speculation. It is deeply rooted in human nature as humans have a tendency to perform any action by looking at its consequences first.

Conclusion

From above discussion we come to know that stock market is a wider concept and stock exchange is a part of stock market. Market trends are an indispensible part of both stock exchange and stock market.