Stag A stag is a cautious speculator in the stock exchange. He applies for shares in new companies and expects to sell them at a premium, if he gets an allotment. He selects those companies whose shares are in more 12th Commerce Unit - - . .
PM Stock Exchange Vs Commodity Exchange. Sl.No Feature Stock Exchange Commodity Exchange . Meaning Stock Exchange (also called Stock Market or Share Market) is one important constituent of capital market. Stock Exchange is an organized market for the purchase and sale of industrial and financial security.
It is convenient place where trading in securities is conducted in a systematic manner i.e. as per certain rules and regulations. A commodity exchange is an exchange where commodities are traded. Tradable commodities fall into the following categories.
Metals (e.g. gold, silver,copper) Energy (e.g. crude oil, natural gas) Agricultural (e.g. rice, wheat, cocoa) Livestock and meat (e.g.
live cattle, lean hog) . Function Providing easy marketability Offering hedging or price insurance services and liquidity to securities. . Object Object is facilitating capital formation and making best use of capital resources Object is facilitating goods flow through risk reduction .
Participants Investors and Speculators Producers, dealers, traders and a body of speculators. . Period of dealings Cash, ready delivery and dealings for account for a fortnight Instant cash dealings and a settlement period of or months for Future Market dealings . Articles Traded Industrial securities such as stocks and bonds and government securities.
Only durable, graded and goods having large volume of trade, price uncertainty and uncontrolled supply . Speculation Speculation ensures saleability of securities affording a broad, ready, liquid and continuous market of securities. Speculation ensures assumption and absorption of price risk. .
Forward contract Forward dealings are simplified as securities are fully standardized Standards are to be fixed for deliverable grades to facilitate futures contract . Cornering As seller has to deliver the agreed securities, cornering is easy Cornering is difficult as the seller has option to deliver standard or other deliverable goods. . Price Quotation As regards forward dealings, only one quotation is possible For future dealings, multiple quotations are possible 12th Commerce Unit - - .