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Equities, also known as shares, represent holdings of ownership of public limited companies. When shares are listed, this means they are available to be bought and sold on national exchanges. When a person buys a stock or share in a company, it is risky for him as he is taking a gamble. If the company does well then you do well, but if the company doesn't fare so well, then the total worth of the shares you hold goes down too.
In contrast to the fixed income type scenario, there could be a bond. In this case, you act as a financier to the company, where you loan some money to the company and the company repays you back every set unit of time + interest. Bonds are more secure as in bad times; the company always pays the bond holders first. However, if the company does very well, the share holders do very well too. But the bond holders will always receive their fixed income, loan amount + interest.
At present, the New York Stock Exchange is the world's largest exchange, followed by the Nasdaq, London Stock Exchange, Tokyo Stock Exchange and then Euronext. Companies list their shares on one or more exchanges when they want to raise investor capital to expand and grow their business. The shares may initially be offered as part of Initial Public Offering or otherwise by way of a private placement amongst institutions nominated by the advising broker.
Once the shares have been listed by a company on the applicable exchange, a secondary market will come up, which means that investors can buy and sell the shares from each other via the exchange. Market forces are completely free to operate and trade prices depending upon the current situation of the company. The price of the share can rise or fall depending on the demand.
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