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How Does The Secondary Market Function? - security law notes
How Does The Secondary Market Function? - security law notes cs executive notes on security law In order to understand how the secondary markets function we must first be apprised of certain important terms: Price: - The price of a stock is totally guided by the forces of demand and supply. The share prices of liquid stocks with wide participation keep changing throughout the trading hours They can be tracked continuously on trading screens. Circuit Filters: - Share prices can swing in a volatile manner on back of news or even due to rigging by operators. It is important to protect the interest of investors and guard them against major losses due to such volatile price movements. So stocks are subjected to an upper and a lower circuit. The price of the stock can move within this range only on a particular trading day There are various slabs like 2%, 5%, 10% and 20% circuit that different stocks are subjected to. The slabs are fixed depending on various factors like share price, retail share holding etc. Volume: - The term volume refers to the total number of shares traded during the day Volumes can be calculated for a particular stock, an index or even for the entire exchange.
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