How does the stock market system work in Türkiye?

How does the stock market system work in Türkiye?

The stock market is a system of markets where transactions such as stocks, government bonds, commodities, foreign exchange, and forward account transactions are made, offered to the public, and buying and selling transactions are carried out easily and safely. The stock market can also be defined as a physical or virtual platform that allows buying and selling within the framework of certain rules under state control. The name of the stock exchange organization in Turkey is Borsa Istanbul.

How Does the Stock Exchange Work?

The stock market system works through the interaction between authorized stock exchange brokerage firms and state-authorized supervisory and regulatory institutions. Buyers and sellers start trading on the stock exchange through an institution that is authorized and has sufficient infrastructure. The buyer or seller places an order, the order consists of one purchase and one sale, and they must match at a price. The value of the invested financial asset increases and vice versa, that is, if the financial asset starts to be sold, its value decreases. So everything depends on the supply and demand relationship. For clarity, it is possible to list the above institutions as follows:

Buyer: Real persons or legal entities who want to purchase financial assets,

Seller: Real or legal persons who want to dispose of or sell their financial investments,

Intermediary institution: Institutions that provide adequate infrastructure to real or legal persons who want to invest,

Regulatory Authority: The authority that ensures trust between buyers and sellers, institutions authorized by the state.

Stock Exchange Types and functioning

It is possible to list the types of stock exchanges that have emerged and developed over time out of necessity as follows:

Stock Exchange:

Securities that can be used as an investment instrument, such as bills, bonds and stocks. It is the area where these assets can be bought and sold and profits can be made as a result of the transactions. Share values in this field add value by creating a positive impact for the country it owns.

Option Exchanges

It is a contract that gives the owner the right to trade a certain security at a predetermined price on a specified date or period. The option right gives the right to decide for the future, whether or not to use it according to the conditions depends on the owner of the financial investment. In other words, if the asset has gained value, it has the right to buy it and if it has lost value, it has the right to sell it.

Futures Exchange

These are contracts made for the delivery of goods in a certain quantity and at a certain price on a certain date. The purpose of using this system is to reduce and balance risk.

Gold and Precious Metals Exchange

It was established for the liberalization of gold trade in order to facilitate the import and export of gold. Gold, which is commercially important, is important in determining the price as it is traded parallel to the world markets. In our country, the Istanbul Gold Exchange took its final form on July 26, 1995.

Contribution of the Stock Exchange to the Country’s Economy

Stock exchanges can share in the profits of companies through capital changes and investments made even with small amounts of money where companies can find cheap funds. In addition to providing long-term resources to the real sector through financial instruments, stock exchanges also have a significant impact on the socio-economic structure of the country, such as the spread of capital, fair income distribution, and the fight against the informal economy. It ensures economic development and enables investors to invest more easily as it protects investors.

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