What is the stock market and how does it work?

The stock market refers to public markets that exist for issuing, buying and selling stocks that trade on a stock exchange or over-the-counter. Stocks, also known as equities, represent fractional ownership in a company, and the stock market is a place where investors can buy and sell ownership of such investible assets.

What is the history of the stock market?

This group of men met daily to buy and sell stocks and bonds, which became the origin of what we know today as the New York Stock Exchange (NYSE). Although the first stock market began in Amsterdam in 1611, America didn’t get into the stock market game until the late 1700s.

Does every country have its own stock market?

Today, virtually every country in the world has its own stock market. In the developed world, major stock markets typically emerged in the 19 th and 20 th centuries soon after the London Stock Exchange and New York Stock Exchange were first created.

What is a stock exchange?

A stock exchange or stock market is a physical or digital place where investors can buy and sell stock, or shares, in publicly traded companies. The price of each share is driven by supply and demand. The more people want to buy shares, the higher the price goes. Less demand, and the price of a share drops.

What was the first stock market in the world?

Examples of Stock Markets The first stock market in the world was the London stock exchange. It was started in a coffeehouse, where traders used to meet to exchange shares, in 1773. The first stock exchange in the United States of America was started in Philadelphia in 1790.

What are stock market indices and how do they work?

The movements of the prices in a market or section of a market are captured in price indices called stock market indices, of which there are many, e.g., the S&P, the FTSE and the Euronext indices.

How does the stock market help companies raise money?

The stock market allows companies to raise money by offering stock shares and corporate bonds. It lets investors participate in the financial achievements of the companies, making money through dividends. Dividends are cuts of the company’s profits. Investors also make a profit by selling appreciated stocks.