Who are market operators in stock market?

Answer 1

This question is vague:

I would assume that this is asking who runs the Stock Market as in who manages the day to day business of the stock market; i will try and answer accordingly. For the purpose of answer and my current Geographical Location i will break this down in terms of the United Kingdom, but most systems having striking similarities.

• The London Stock Exchange (LSE) manage the UK stock Market.
• The index is called the FTSE, this is a composite of the top companies that are publicly traded (IE anyone can buy and sell shares) in the United Kingdom. This is based on the market price and volume of each company. These index are split as such:

1. FTSE100, meaning the top one hundred companies in terms of their market value
2. FTSE250, meaning the top 250 companies in terms of their market value
3. FTSE ALL SHARE- incorporating all companies in the main market in the UK

• It could be argued that the people who run the market are as follows

1. Market makers- These are investment banks (eg Goldman Sachs) that partake in IPO's (initial public offerings) An IPO is done when a private company wants to 'go public', they ask investors and fund managers to buy shares in a company, when the company has fully, or nearly fully sold out then they launch the company on to the stock market. Another aspect market makers do is to generate more equity in a company, they do this buy issuing more shares in a company, effectively diluting the value of the other shares. In order to stop existing shareholders being annoyed by the decreased value of their holding they offer them the right to buy the shares (take up their rights) or to receive free shares to compensate them.
2. Stockbrokers- Buy and Sell shares on behalf of investors. They can control the price of companies by waiting and mass buying or selling shares which can effect the price drastically.
3. Fund Managers- these include unit trust, OEIC (open ended investment companies), Hedge Funds and Investment Trust managers. They manage trillions of assets on behalf of investors and in extreme circumstances can cause the rise or fall of a company in a matter of hours.