The stock market, equity market or share market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete) of stocks (also called shares), which represent ownership claims. These may include securities listed on a public stock exchange as well as those only traded privately. Stock exchanges list shares of common equity as well as other security types, e.g. corporate bonds and convertible bonds.
Stock markets function through the interplay of buyers and sellers who come together and trade company stocks and other securities for cash or each other. The former is known as cash transactions, while the latter is called script.
The stock market is a collection of markets where stocks (pieces of ownership in businesses) are traded between investors. It usually refers to the exchanges where stocks and other securities are bought and sold.
The stock market can be used to measure the performance of a whole economy or particular sectors of it.
A company’s stock price is set by the market, based on the demand for that company’s shares. When more people want to buy a stock than sell it, the price goes up. When more people want to sell a stock than buy it, the price goes down.
Stock markets exist so that businesses can raise money by selling shares to investors, and investors can make money by buying and selling shares.
The stock market can be used to measure the performance of a whole economy or particular sectors of it. For example, the technology sector is often measured by the Nasdaq Composite Index, which includes many of the world’s biggest tech companies.
Stock markets are volatile places, and prices can go up and down a lot in a short space of time. This is because they rely on investor confidence – if people believe that a company is doing well, its stock price will go up. If they lose confidence, the price will fall.
Philly transactions. Stock markets can be either physical exchanges such as the New York Stock Exchange, London Stock Exchange and Tokyo Stock Exchange, or electronic networks such as NASDAQ and the London Stock Exchange’s AIM market.