1. Stock Market as a type of market
Stock market: A stock market is a physical place, sometimes known as a stock exchange, where
brokers gather to buy and sell stocks and other securities.
The term is also used more broadly to include electronic trading that takes place over computer
and telephone lines
Constituents of Stock Market
Participants
For e.g.: BHEL
Types of Securities
Stock Market
Investors
For e.g.: FII
Screen-based trading and Dematerialization
 NSE arrived with a fully computerized order book in 1994 called NEAT (National
Exchange for Automated Trading).
Intermediaries
For e.g.: ICICI
direct
Security Market
Primary Market Secondary Market

2.  This enabled it to spread across to various towns and cities in India by setting up
terminals connected to the central system through VSAT.
 Trading in 1363 securities through 2856 VSAT terminals (servicing 9000 users) spread
across 354 cities
Bid & Ask Price
The difference in the price of the best bid and ask is called as the Bid-Ask spread and often is
an indicator of liquidity in a stock. The narrower the difference the more liquid or highly traded
is the stock.
Regulatory Framework
SEBI Act (1992): SEBI has been obligated to protect the interests of the investors in securities
and to promote and development of, and to regulate the securities market.
Following are the functions :
 Regulating the business in stock exchanges.
 Registering and regulating the working of stock brokers.
 Promoting and regulating self-regulatory organizations.
 Prohibiting insider trading in securities.
 Regulating substantial acquisition of shares.
 Leving fees or other charges for carrying out various activities.
 Conducting research for various activities.
Conclusion
• Both buyers and sellers are price takers. ×
• The number of firms/individuals is large. 
• There are no barriers to entry. ×
• The firms' products are identical. 
• There is complete information. ×
• There are no regulations. ×