Stocks are issued by companies to raise capital for business.In turn the investors of the stocks get a part of the business owned by a company.So why does companies want to let others to make profit out of their companies without having them run the business and take the burden?The simple answer to the question is:

A company has two modes to raise capital.Either they can borrow money that is they can take loan.Or they can issue shares.The only advantage of the later is that the companies do not have obligation to return the money invested on the stocks if the business runs into trouble or suffers any losses.The prices of the stock falls.So the risk on the money borrowed by the company is very little for the company.

On the contrary when the company does well and are in profit ,the company pays dividends or the prices of the shares rises and then they can be sold at an appreciated price.

The stocks are traded in the stock exchanges or they are traded sometimes over the counter.There are two type of people who are trying to make profit out of stock market.They are traders and investors.Traders try to find short term gain in the market and investors try to find long term gain in the share market.

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Summary
What is share market
Article Name
What is share market
Description
Stocks are issued by companies to raise capital for business.In turn the investors of the stocks get a part of the business owned by a company.So why does companies want to let others to make profit out of their companies without having them run the business and take the burden?
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WayToInvesting
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