What is a Stock Market?

what is a stock market crash

What is a Stock Market? A stock market is a marketplace where stocks are purchased and sold. It can exist as a physical market, an electronic market or a mixture of both.

Stock markets serve numerous functions, chief among them being an industrial function. Markets help the transfer of capital from investors to users of capital. They allow firms looking to expand to raise capital from financiers in the first market and facilitate trade between buyers and sellers of stock in the secondary market.

Another function of a Stock market is its continuous pricing function. This market feature enables interested parties to grasp at any time, what the price of a stock is. Price quotes can be accessed thru monetary internet sites and financial TV or radio stations. This expediently permits stockholders to understand exactly how much their stock holdings are worth.

Perhaps the most vital of all the functions of a stock market is its FAIR PRICING function. The workings of the stockmarket enable buyers and sellers of stock, to get the best price possible for a particular stock. This fair pricing function is as a consequence of the contest between the countless buyers and sellers of stock who operate in the stock market daily.

Although many stock markets exist in the U.S, the 2 most prominent stock markets are the Manhattan Stock Exchange (NYSE) and the Naz . Billions of bucks worth of stock are traded on both markets common-or-garden and a heaps of media attention is focused on each. Stocks of the majority of the major U.S companies are mentioned on both these markets with the NDX being favored by technology companies.

While they perform the same functions, the 2 exchanges are totally different in how they operate. While the NDX is a wholly electronic marketplace, matching buy and sells orders thru its PC systems, the NYSE maintains a physical trading floor with human dealers that complete buy and sell orders in an energetic fashion. The NYSE however, does also have an electronic trading system that now handles the bulk of all daily buy and sell orders.

In order to ensure that investors are protected against crime, stock exchanges need companies looking to list their stock on the exchange, to release all money statements to the public. Both exchanges also require corporations to meet certain monetary needs. Firms that are listed but who then fall short of these finance and transparency requirements are sometimes de-listed from the stock exchange.