The stock market in Australia is a trading forum: a market for the trading of stocks and shares in a company or corporation. Every major economy has a stock market, with a stock-price index, which essentially indicates how well the companies that are 'floated' on the stock market are performing. A stock market provides a way for people to buy and sell fractions of a particular company's capital. A company can choose to sell shares in its business. These shares can be bought and sold on the stock market. The price of the shares will depend on how well the company is seen to be doing at that time; if the company is very successful, its shares will be expensive, if not, its shares will be cheaper. Professional traders try to make money by buying shares when they are cheaper and selling them when they become expensive. They trade shares on the stock exchange, based on how well they are doing in the stock market.
In Australia the main stock exchange indicator is the Australian Securities Exchange or ASX, sometimes referred to as the Sydney Stock Exchange. The ASX is an Australian public listed company that operates Australia`s primary securities exchange. It oversees compliance with its operating rules, promotes standards of corporate governance among Australia`s listed companies and helps educate retail investors. It also publishes a range of indexes which track the share price fluctuations of a specific group of companies. The S&P/ASX 100 index is an index based on the average share price fluctuations of the one hundred most valuable companies in Australia. Currently the ASX 50 includes companies such as BHP Billiton, Commonwealth Bank of Australia, Westpac, Telstra, Rio Tinto, National Australia Bank and Australia and New Zealand Banking Group. Other oft-quoted Australian indices include the S&P/ASX 200 AND THE S&P/ASX 100, tracking the success of the top two hundred and top one most valuable Australian companies (after those in the ASX 50) and the ASX Trade, or ASX All-Share, which facilitates the trading of ASX securities and essentially tracks the fortunes of all trading companies, and the ASX Trade24 for derivative securities trading.
ASX Trade24 is ASX global trading platform for derivatives. It is globally distributed with network access points (gateways) located in Chicago, New York, London, Hong Kong, Singapore, Sydney and Melbourne. It also allows for true 24-hour trading, and simultaneously maintains two active trading days which enables products to be opened for trading in the new trading day in one time zone while products are still trading under the previous day.
In the USA the stock market indexes tend to chart the fortunes of the 'blue chip' companies. Blue chip companies are those whose shares are established on the stock market and are seen to be very secure investments, perhaps because their ongoing success is all but guaranteed. Examples of blue chip companies include Coca-Cola and Disney. You may find that some Australian indexes refer to certain companies as blue chip investments. This means that their shares are seen to be a very secure investment. These shares are unlikely to increase in value suddenly, but are also unlikely to suffer huge losses: over time they are almost guaranteed to give you steady investment returns.
For details of savings and investments linked to the success of the stock market, see:
> Stock Market-Linked Savings.
