Definition: What is the Stock Market?

The stock market is a blanket term used to refer to several marketplaces across the world where investors can buy and sell shares of publicly owned companies.

The stock market has existed in some form for hundreds of years, but has evolved enormously.

What is the Stock Market?

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Today, most stock trades are executed electronically, with shares transferring instantly as payment is made.

The Equity Market

There are various types of financial markets, including stock markets, commondity markets, futures, and bonds markets.

The equity market, where stocks are bought and sold, is the primary financial marketplace in which large companies raise money needed to operate or expand their business.

By selling individual stakes and equity (commonly called shares) in the company, a company’s management and owners are able to raise the up-front money needed at any given time by allowing other individuals or companies to own a small portion of the company.

Stock Exchanges

Shares on the stock market are primarily listed, bought and sold on what is called a stock exchange.

In the United States, the New York Stock Exchange and the NASDAQ are the exchanges.

Countries around the world have their own stock exchanges, and investors may buy and trade internationally as well as at home.

The stock market refers to all buying and selling of the shares of a company.

Some smaller companies and private companies may have shares bought and sold through private dealers.

While these may not be traded on an exchange, they are still part of the complete picture that makes up the stock market.

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