👍 What is the stock market?
The stock market is a market in which stocks, which are securities representing shareholder rights, are traded.
For companies that issue stocks, long-term funding is possible like corporate bonds,
It gives investors a great opportunity to call their own funds.
In addition, since stocks are a channel through which companies raise their own equity capital, they play a role in enhancing financial stability by lowering the company's dependence on others' capital.
The stock market is divided into a "issuance market" in which stocks are newly created and supplied through public offerings and rights offerings, and a "distribution market" where already issued stocks are traded between investors.
👊 Stock issuance market (primary market)-where stocks are issued
🙌 When will the shares be issued?
This is done when a stock company raises the capital of the establishment (founding the company for the first time) or increases the capital (expansion of the company).
Issuance methods for capital increase include capital increase, free increase, stock dividend, and stock conversion of stock-related bonds.
Publisher: Companies that need funds
Investors: Individuals/foreigners/institutions (banks, securities companies, asset management companies, insurance companies, etc.)/other corporations
Underwriter: Securities company
🙌 Stock issuance method
Stock issuance methods are divided into public offering and private issuance depending on the method of selecting the consumer of the stock, and direct issuance and indirect issuance depending on the risk associated with issuance and the method in charge of office procedures.
Public offering issuance: Recruitment to unspecified investors (soliciting acquisition/subscription of newly issued securities) or sales (soliciting sales/purchase of previously issued securities)
Private placement: Issued by the issuer for specific individuals/corporations
Direct issuance: A method in which the issuing company bears the risk of issuance under its own name and is in charge of the issuance work. If unsubscribed is issued, the size of issuance must be reduced or re-recruited, so it is used in company establishment or private placement when the size is small.
Indirect issuance: A method in which the issuing company transfers the issuance risk and affairs to the securities company and pays commission.
Recruitment/Sales Arrangement: A method in which a securities company is in charge of issuing only, and the issuing company takes risks on its own
Balance Acquisition: Stocks that have not been sold are handled by securities companies
Total acquisition: A method in which a securities company bears all risks by taking over the entire issue amount of the issuer
👊 Stock distribution market (secondary market)-Where to buy and sell stocks
If stocks are issued, trading is active in the distribution market.
When buying or selling stocks in the distribution market, follow the "trading principle".
Price-priority principle: high-priced quotes take precedence for buy orders, and low-priced quotes take precedence for sell orders.
Time-priority principle: The quoted price received first takes precedence over the same price quote.
Consignment trading price priority: Consignment trading price (customer's order) takes precedence over self-trading price (security company order)
Quantity-priority principle: Asking prices with a large quantity take precedence over simultaneous quotations