Stock market
A stock market is an institution where people and computers buy and sell shares of companies.
Shares
[change | change source]Shares are small pieces of a company. Shares can be bought by humans, companies, and mutual funds. When buying shares in a company, the buyer owns a small part of that company. The price of a share can be based on many different things. The main thing that affects the price is the balance between supply and demand. If many buyers want to buy a stock the price goes up. If there are more sellers than buyers, the price goes down.
Stock brokers
[change | change source]Some buyers trade shares in stocks through a stockbroker. A stockbroker is a person who buys or sells stocks for their customers. A stockbroker can also help customers make choices in stocks. Their advice is based on public information about the companies.
How the Share Market Works
[change | change source]The interplay of buyers and sellers drives the operation of the stock market. Orders to purchase or sell shares can be placed through brokers or internet trading platforms. These orders are matched on stock exchanges, where supply and demand dynamics determine the price. The stock market works on the supply and demand concept, with prices moving based on a variety of factors such as corporate performance, economic conditions, and investor mood.
Stock markets in the world
[change | change source]There are dozens of stock markets (or "exchanges") in the world, including 18 of them in the U.S. (as of early 2025). Some of the better known stock exchanges are:
- NYSE (New York Stock Exchange) - USA
- NASDAQ - USA
- London Stock Exchange - UK
- Tokyo Stock Exchange - JP
- Toronto Stock Exchange - CA
Cultural changes in the stock market
[change | change source]Trading stocks online has become more popular. Stocks can be traded online. There is a fee or commission each time a position is opened.
References
[change | change source]The SEC's list of licensed exchanges can be found here: https://www.sec.gov/about/divisions-offices/division-trading-markets/national-securities-exchanges Note that some of these exchanges are not stock markets but trade other products, such as options.