Who are the main participants in the financial markets?

Companies raising capital or wishing to sell existing shares to new investors

Companies seeking business development and funds to execute their plans and expand have several options: to take out a loan from a bank, to find new partners, or to offer shares on the stock exchange where they can be purchased by investors to secure new capital. Companies can list on the stock exchange not only for the purpose of raising new capital, but to offer their shares to new investors. Some of the largest companies in the world have reached their current scale through their presence on the stock exchanges.

Investors and speculators

Anyone can participate in the financial markets with funds they want to invest with the intention to increase them over a certain period. Long-term investors make decisions based on analyses and information, investing funds for an extended period with the idea that a company's stock is promising due to the potential for development shown by its financial condition and business plans. Speculation is a short-term investment, where the goal is for the investor to capitalize on the immediate market conditions, reactions to specific news, and so on.

Investment intermediaries

These are brokerage companies that must be licensed or approved by the respective regulatory body in the country where they are registered. In Bulgaria, this is the Financial Supervision Commission. Specialists competent to execute transactions on the Bulgarian Stock Exchange must also have a broker's license from the Financial Supervision Commission after successfully passing the exams for this specialization. Regulation of the intermediaries' activity ensures investor protection and security in financial market operations.

Investment intermediaries provide investors with access to financial markets through brokerage services for executing trades, electronic trading systems, custody of investment funds, informational services, analyses, and more.

When investors choose an investment intermediary, they should check if the company has a license for the services it offers, and what its history and reputation are.

Stock exchanges

Exchange operators are those who provide the technological environment and organization for securities trading to take place. Stock and commodity exchanges are often confused: commodity exchanges are intended for trading commodities, not financial instruments - these are the products used on stock exchanges.

Indices are calculated for each exchange, reflecting the movement of prices and trading of specific stocks. Major indices show the performance of the shares of the largest and most frequently traded companies listed on the respective exchange and are used as a reference for the state of the given stock market.

For example, the S&P 500 (Standard & Poor’s 500) reflects the movement of prices of the 500 largest U.S. public companies by market capitalization listed on the New York Stock Exchange and the NASDAQ exchange operator. This index is often used as an indicator of the state of the U.S. economy. Exchanges organize different markets depending on the type and characteristics of financial instruments, and trading with them takes place during specific exchange session hours.