Knowing The Stock Exchange: Here's Understanding, Function And How It Works

Getting To Know The Stock Exchange (Tachina Lee - Unsplash Image)

YOGYAKARTA - Do you often hear about the stock exchange when buying stock investment? In fact, do you know, what is an securities exchange and what is the use of the stock exchange? So, do you know the stock exchange?

The following is the understanding of the effect and function exchanges:

The securities exchange is the party that organizes and provides a system and/or facility, to bring together selling and buying securities offers from parties who want to trade these effects. Stock exchanges are established to organize and provide systems and/or securities trading facilities. With the availability of a good system and or facility, the stock exchange members can carry out offering and buying effects in an orderly, normal, and effective manner.

In addition, the availability of systems and or facilities means that it allows the stock exchange to carry out supervision of its members more efficiently. At this time, the stock exchange in Indonesia is carried out by PT Bursa Efek Indonesia (PT IDX).

Capital Market Differences And Stock Exchanges

If the interpretation of the stock exchange is a medium of securities trading transactions, up to the capital market itself is a funding market for both industry and other institutions as places to invest.

The capital market is a long-term investment instrument that can be traded, such as stocks, debt securities, mutual funds, derivatives as well as ETF. If simplified, the capital market refers more to transaction activities, on the contrary, the securities exchange is an institution that provides the means to invest.

How Stock Exchange Works

The working method of the stock exchange is as follows, starting when an industry is registered and open to the public. The company is obliged to produce proof of its ownership in the form of shares, as a form of their working capital.

Shares issued by the company and have been listed on the stock exchange can later be purchased by retail investors. The securities exchange is a medium or facilitator of the sales process as well as purchases between companies and investors. Of course, the industries that have been listed on this stock exchange have gone through so many stages that they can be listed on the list.

Examples of Stock Exchange in Indonesia

Examples of securities exchanges in Indonesia are Indonesia Stock Exchange or IDX. This securities exchange is a provider of investments ranging from shares, debt securities, ETF to derivatives.

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