What is the Stock Market?

I have heard about the word Stock market a couple of times but if asked to explain how it works I would probably be lost for words. I just know that stock markets are full of shouting people who are bidding for something I can’t quite understand. This kind of picture is strongly influenced by the movies that I have watch which include scenes from the stock market. Now, I realized why such a commotion happens in stock markets because of the trading and bidding that occurs.

Stock markets serve as a public market for trading in company like shares derivatives and other options. The companies that offer there shares to the public are listed in the stock exchange to facilitate the transaction of shares, purchase, and sale. Once listed the shareholders can start trading in company shares as per the price prevailing in the market. The shares are traded through stock brokers and dealers. The stock markets are regulated by authorities in their respective countries in order to ensure compliance with legal system of the country. The stock market is the primary source of money for different companies. It is also an indicator of the economic status of a country.