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EQUITY MARKET (equity market (other concepts (general market conditions…

- - - - stock investor
      - stock traders
      - market maker
      - floor trader
      - floor/pit broker
      - broker-dealer
    - - agencies clearing agencies
      - credit rating agencies
      - electronic communications networks
      - investment adviisers
      - securities exchanges
      - self-regulatory organization
  - - - primary market
        
        issues new stocks on an exchange
        
        intial public offering (IPO)
        
        first public sale of a company's stock
        
        requires the securities and exchange commission (SEC) approval
        
        thre choices to market securities
        
        public offering
        
        an offering to sell a set number off shares of firm's stock at a specified price
        
        rights offering
        
        an offering off a new issue of stock to existing stockholders.in pproportion to their current ownership
        
        private placement
        
        an offering of a company's securities that is not registered with SEC and is not offered to the public at large
      - secondary market
        
        the market in which securities are traded after they have been isued
        
        role
        
        provides liquidity to security purchasers
        
        provides continouus pricing mechanism
    - - organized exchanges
        
        each organied exchange has a trading floor, transaction in the secondary market
        
        Listing requirements-
        
        minimum number of shares outstanding and a minimum level of earning, cash flow, and revenua over a recent period
      - OTC market
        
        stocks not listed on the organized exchanges are traded in the OTC market
        
        OTC Bulletin Board
        
        lists stocks that have a price below &$1 per share, which are sometimes referred to as penny stocks
        
        pink sheets
        
        The OTC market has where even smaller stocks are traded. Some of the stocks have very little trading volume and may not be traded at all for several weeks
  - - - is the composite value of a group of secondary market-traded tocks
    - - monitoer the behavior of a groups of tocks
      - benchmarks to evaluate performance of professional money managers
      - create and monitor an index fund
      - measure market rates of return in economic studies
      - predicting future market movments by technicians
      - as a substitite for the market portfolio of risky assets when calculating the systematic risk of an asset
  - - - order specifies the buy or sell price
      - time specifications for order may vary: instantaneous "fill or kill", part of a day, a full day, several days, a week, a month or good until cancelled (GTC)
    - - Buy or sell at the best curent price
      - provides immediate liquidity
  - - - sell overpriced stock that you don't own and purchase it back later
        
        borrow the stock from another investoer
        
        can only be made on an uptick trade
        
        must pay any dividends to lender
        
        margin requirements apply
    - - bull market
      - bear market
- - - - obtain financing to support the firm's growth
      - cash out by selling their original equity investment to others
  - - - changes the firm's ownership structure by increasing the number of owners
      - changs the firm's capital structure by increasing the equity investment in the firm
      - stock market link the surplus units with deficit units (like other financial market
  - - - limited liability
      - professional management
      - large financial resources
      - large-scale production
      - contributon to society
      - research and development
  - - - when you own a share of stock with a claim on every asset and every penny in earnings
    - - rarely think like owners
      - it's not as if they actually have a say in how things are done
      - it's that ownership strcture that gives a stock its value
    - - common stock: most common form of stock
      - preferred stock
- - - - are not tax deductible for the firm
      - making preferred stock less desirable than bonds