The stock market is a market where securities( bonds. Shares, derivatives etc) are bought and sold.🤩
There are different stock exchanges in different countries where stocks are bought and sold. There is the New York stock exchange which is the most famous. They trade over $169 billion per day.⭐
The stock market today is a digital place but in the past these were actually trading floors in New york, London and other cities were stocks were traded in a live auction.
Companies are able to raise money via the Stock exchange through an initial public offering.This is when stocks are offered to the public for the first time. After this process a company goes from being a private company which did not have its stocks listed on the stock exchange to being a public company whose stock are traded on the stock exchange daily.
When selling or buying in the stock market, you set a price at which you want to buy or sell, you then assign a broker to find a buyer or seller at your price, once the broker finds a buyer or seller the broker will then make the transaction happen but will charge you a broker fee for their work.
The stock markets generally work off human psychology. This means bad or good news motivates the actions of buyers and sellers. Asset prices will usually fall as sellers continue to try to offer the best prices to buyers in order to attract buyers at their price point.
When good news leads to an increased demand for an asset then sellers will usually try to get the best price and will request a higher price in order to match eager demand from buyers.💫
The price of assets(securities) depends on the demand and supply in the market.
**To summarise: ** The stock market essentially deals with:
- Listing the stocks
- Processing payments
- Tracking prices and making available sales data
Some of the biggest stock exchanges include🌃:
- London Stock Exchange Group
- Shanghai Stock Exchange
- Toronto Stock Exchange
- Frankfurt Stock Exchange
- Australian Securities Exchange
- New York Stock Exchange
- Tokyo Stock Exchange
- Hong Kong Stock Exchange
You can invest in a stock exchange via an Index fund, ETF or mutual funds which can carry all the stocks in a stock exchange proportionally in a bid to track its price movement.
ETFs are known to be the easiest out of all the options.