What is stock market?

Definition

The stock market is a marketplace where individuals and entities can purchase or sell stocks in companies that meet certain requirements.

Understanding the Stock Market

The stock market facilitates the buying and selling of stocks in publicly traded companies, bringing together buyers and sellers through auctions where the highest bid and lowest ask prices are named. Trade prices are typically executed at or between these prices. Stockbrokers usually place trades on behalf of investors or portfolio managers. In the United States, there are 13 exchanges that make up the stock market, including the well-known New York Stock Exchange and Nasdaq.

Example

Snap Inc., the firm that owns Snapchat, made its shares available on the public market with its initial public offering (IPO) in 2016. These shares are currently being traded on the New York Stock Exchange using the symbol "SNAP."

Gist

From New York to Hong Kong, every stock market helps connect buyers and sellers, who trade under an agreed upon set of rules.