difference between stock market and share market

Difference Between Stock Market and Share Market: Explained

The stock market and the share market are two different terms that are often used interchangeably. Although both refer to the market where stocks are bought and sold, there are significant differences between the two. In this article, we will discuss the differences between the stock market and the share market.

Definition

The stock market refers to a collection of exchanges and markets where shares of publicly traded companies are bought and sold. In other words, it is the market where stocks, which represent ownership in a public company, are traded. On the other hand, a share market is a place where shares of a specific company or a group of companies are traded.

Scope

The stock market is broader in scope than the share market. It includes all publicly traded companies, which means that anyone can buy shares in any of these companies. The share market, on the other hand, is usually limited to a specific group of companies, such as those in a particular industry or geographic region.

Trading

Trading in the stock market and the share market is usually done through a broker. However, the processes differ slightly. In the stock market, shares are traded on an exchange, such as the New York Stock Exchange (NYSE) or Nasdaq. Investors place orders to buy or sell shares through their broker, who then sends the order to the exchange. In the share market, shares are traded over-the-counter (OTC), meaning that there is no central exchange. Investors usually trade shares through their broker, who deals directly with other brokers representing the seller.

Regulation

Both the stock market and the share market are regulated, but the level of regulation differs slightly. The stock market is heavily regulated by the government, which has strict rules and guidelines that must be followed. The share market, on the other hand, is regulated by the market itself, although there are still rules and regulations that must be followed.

Risk and Reward

Both the stock market and the share market carry risks and rewards. However, the level of risk and the potential reward differ based on the companies listed in each market. The stock market is generally considered to be less risky, as it includes a large number of companies and is well regulated. The share market, on the other hand, can be more risky, as it often includes smaller companies that are not as well-established as those listed in the stock market.

In conclusion, while the terms stock market and share market are often used interchangeably, there are significant differences between the two. The stock market includes all publicly traded companies, while the share market is usually limited to a specific group of companies. The processes for trading and regulation also differ between the two markets, as do the risks and rewards involved in investing. It is important for investors to understand the differences between these two markets before investing in either.

Table difference between stock market and share market