Understanding the stock market as the market in general that is a meeting place for sellers and buyers. Here are bought and sold is a capital or funds. So sellers together capital market capital / funds with buyers capital / funds. Buyers funds / capital is they both individuals and institutions / entities were set aside excess funds / money to businesses that are productive. ‘re Penjualmodal / funds are companies that require additional funds or capital for their business purposes.
In fact the stock market is known as the Stock Exchange or in English is called the Securities Exchange or the Stock market, as seen in a different term, but essentially the same which is a meeting place for sellers and buyers of funds of funds in the capital market or the exchange mediated by the Exchange member brokerage as a wholesaler to do the transaction. This institution as supporting capital markets (Dr.Sumantoro, 1990).
In the Indonesian capital markets regulated in the Law No. 8 of 1995 on the capital market is the capital market interprets kegiataan concerned with public offerings, securities trading, public companies relating to securities, public companies relating to the issuance of securities, as well as institutions and professions related to the effect. Effects may include stocks, bonds, promissory notes, commercial paper, and so on.
There are three definitions of capital markets (Ahmad, 2003):
a. Definition in a broad sense
The capital market is organized financial system needs, including commercial banks and all intermediaries in finance, as well as securities, long-term and short-term, primary and indirect.
b. Medium in the sense of Definition
Capital market organized all markets and institutions trade-scrip scrip credits (usually with a maturity of more than one year, including stocks, bonds, savings and time deposits.
c. The definition in the narrow sense
The capital market is an organized market place to trade stocks and bonds with the services of a broker, the commissioner, and the underwriters.