Stock Market is a public market for the trading of company stock and derivatives at an agreed price; it includes the physical location for buying and selling stocks.
The major exchanges in the US are the New York Stock Exchange (NYSE), the American Stock Exchange (Amex), and NASDAQ.
The correct term for the physical location for trading stocks is the "Stock Exchange." A country may have many different stock exchanges. Usually a particular company's stocks are traded on only 1 exchange, although large corporations may be listed in several.
Investing Around The World
There are stock exchanges located throughout the world, and it is possible to buy or sell stocks on any of them. The only restriction is the oparating hours of each exchange. Both the NYSE and NASDAQ, for example, operate from 9:30 am to 4:00 pm Eastern Time, Monday through Friday.
Other exchanges have similar opening hours based on their local time. When you trade on the Hong Kong Stock Exchange, your order will be executed sometime between 9:30 pm and 4:00 am New York time.
The locations of the major stock exchanges of the world are:
Japan (Tokyo Stock Exchange) India (Bombay Stock Exchange) Europe (London Stock Exchange, Frankfurt Stock Exchange, SWX Swiss Exchange) the People's Republic of China (Shanghai Stock Exchange) United States.
Stock Market Fluctuations
The economic health of a country will strongly influence its stock market. When the economy is doing well the market is bullish. Bull markets occur during times of high economic production, low unemployment and low inflation. Bear markets, on the other hand, follow downturns in the economy. When inflation and unemployment are rising, stock prices are usually falling.
Stock price fluctuations are also driven by supply and demand, which in turn are dependent to a great degree on investor psychology. Seeing a stock price rise rapidly can cause investors to jump on the bandwagon, and this rush to buy drives the price up even faster. A falling price can have a similar effect in the other direction. These are short-term fluctuations. Stock prices tend to normalize after such runs.
The stock exchange is only 1 of many opportunities for people to invest. Other popular markets include the Foreign Exchange Market (FOREX), the Futures Market, and the Options Market.
FOREX: World's Largest Market
The FOREX is the biggest (in terms of value) investment market in the world. FOREX traders buy 1 currency against another and can profit from small changes in currency value. Most FOREX trades are entered and exited in 1 24-hour span, and traders have to keep a close watch on the market in order to make profitable trades.
The Futures Market
The Futures Market is a market of contracts to buy and sell certain goods at specified prices and times. It exists because buyers and sellers of goods wish to lock in prices for future delivery, but market conditions can make the actual futures contract fluctuate considerably in value.
Most investors in the futures market are not interested in the actual goods -- only in the profit that can be realized from trading the contracts.
The Options Market
The Options Market is similar to the Futures Market in that an option is a contract that gives you the right (but not the obligation) to trade a stock at a certain price before a specified date. These options can be traded on their own or purchased as a form of insurance against price fluctuations within a certain time frame.
Stocks: Low Risk, Long-Term
All 3 of these markets are considered quite risky without considerable knowledge and experience. They also require close monitoring of market movements. Stocks, on the other hand, are less risky because movements of the market are usually more gradual. Although short-term investment strategies are possible, most people view stocks as long-term investments.
Showing posts with label stocks. Show all posts
Showing posts with label stocks. Show all posts
Tuesday, October 13, 2009
Stock Market: Understanding Its Nature
Have you noticed the numbers rolling by on the bottom of your screen during a news cast? Those are very important to the people who steadfastly watch the stock markets for they make their fortune with stocks.
To understand the stock market you first need to understand what stocks are. Stocks are the capital raised by a company when they sell shares. Shares are offered through the stock market and the money taken in from those becomes the company’s stocks.
There are several major stock exchanges in the world where shares are traded. Company’s stocks are increased and decreased each day.
One of these stock markets is the NASDAQ. NASDAQ stands for National Association of Securities Dealers Automated Quotations. The NASDAQ is a United States based stock market. It’s the world’s first electronic based stock market. It also trades more shares each day than any other stock market which means it has the most impact on stocks.
Another large stock market that is United States based is the Dow Jones Industrial Average. You might hear someone say that the Dow is up or down this is what they are referring to. Many stocks are introduced on the Dow.
Many other countries also have a great impact on stocks. In Europe almost each country has their own stock market this includes Portugal, Germany and Lisbon. The people living and working there follow invest in the stock market there and just like in North America the stocks rise and fall.
The people who handle the buying and trading are called stock brokers. Their job is to sell and trade the shares that their clients request. It’s a demanding and rewarding job being involved directly in stocks this way. Stock brokers can make a lucrative income and the ones that study the markets and understand all the ups and downs have a definite advantage.
For the everyday person to get involved in stocks they need to do a bit of research. It might be wise if a large amount of money is involved to talk to a stock broker. Their job is related to stocks and no one is better qualified to assist you.
Stock brokers are paid on commission and therefore their drive is to invest in shares that will ultimately turn a profit. Often a stock broker has extensive knowledge with just a few stocks and he concentrates on those. If you decide to invest in a share that a certain stock broker is very well versed in, it might be prudent to have him or her handle your dealings. They can offer the best advice as to when to buy and when to sell.
There are other avenues available for people interested in stocks and that’s the online stock trading companies. Many of these companies allow anyone to sign up and buy and trade their own shares. This can be a great way for someone to be introduced to the world of stocks and with some research and practice they can make themselves a profit.
There are also many people day trading for a living, making obscene amounts of money!
To understand the stock market you first need to understand what stocks are. Stocks are the capital raised by a company when they sell shares. Shares are offered through the stock market and the money taken in from those becomes the company’s stocks.
There are several major stock exchanges in the world where shares are traded. Company’s stocks are increased and decreased each day.
One of these stock markets is the NASDAQ. NASDAQ stands for National Association of Securities Dealers Automated Quotations. The NASDAQ is a United States based stock market. It’s the world’s first electronic based stock market. It also trades more shares each day than any other stock market which means it has the most impact on stocks.
Another large stock market that is United States based is the Dow Jones Industrial Average. You might hear someone say that the Dow is up or down this is what they are referring to. Many stocks are introduced on the Dow.
Many other countries also have a great impact on stocks. In Europe almost each country has their own stock market this includes Portugal, Germany and Lisbon. The people living and working there follow invest in the stock market there and just like in North America the stocks rise and fall.
The people who handle the buying and trading are called stock brokers. Their job is to sell and trade the shares that their clients request. It’s a demanding and rewarding job being involved directly in stocks this way. Stock brokers can make a lucrative income and the ones that study the markets and understand all the ups and downs have a definite advantage.
For the everyday person to get involved in stocks they need to do a bit of research. It might be wise if a large amount of money is involved to talk to a stock broker. Their job is related to stocks and no one is better qualified to assist you.
Stock brokers are paid on commission and therefore their drive is to invest in shares that will ultimately turn a profit. Often a stock broker has extensive knowledge with just a few stocks and he concentrates on those. If you decide to invest in a share that a certain stock broker is very well versed in, it might be prudent to have him or her handle your dealings. They can offer the best advice as to when to buy and when to sell.
There are other avenues available for people interested in stocks and that’s the online stock trading companies. Many of these companies allow anyone to sign up and buy and trade their own shares. This can be a great way for someone to be introduced to the world of stocks and with some research and practice they can make themselves a profit.
There are also many people day trading for a living, making obscene amounts of money!
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