Stock Market Definition

Definition of ‘Stock Market’

Stock Market Definition:
The stock market is a market for the trading of a company stock. It is a place where buyers and sellers trade stock of public companies. A public company is one that is not privately owned and in which the general public can invest in shares of that particular company.

Shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. The stock market in the United States is made up of various exchanges — NYSE, NASDAQ, AMEX, OTCBB, and Pink Sheets.

More On The Stock Market

The stock market by definition a market in which shares of a company’s stock are bought and sold. When companies are looking to grow they need to find investors willing to invest in their company. They need to rise money to keep buying machines and products and to expand their businesses. At the same time many investors want to find companies where they can invest their funds, so they can receive passive income from the growth of those companies, which usually cause a growth on their portfolio of invested funds.

Companies discovered a long time ago that the most profitable, easy, fast and effective way to find the investors is through an organized system, in which there is liquidity, and through which all interested individuals could bring in funds to keep developing their businesses and enterprises. That originated The Stock Market, which have been evolving and improving for a long time.

Stocks are traded through stock exchanges. The two biggest stock exchanges in the United States are the New York Stock Exchange (NYSE) and the Nasdaq. Exchanges are regulated agencies, which facilitate the transactions between buyers and sellers and ensure the fairness of each transaction for everyone. Stockbrokers also facilitate transactions for their clients and earn a commission for doing so.

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Tutorial – Read How The Stock Markets Work