Stock Market

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Definition of 'Stock Market'

The stock market refers to a collection of markets and exchanges where the buying and selling of publicly traded stocks, bonds, and other securities takes place. These markets are used to enable companies to raise capital by selling shares of their ownership, or stock, to investors.

When a company goes public, it issues shares of its stock to the public through an initial public offering (IPO), and these shares can then be bought and sold by investors on the stock market. The prices of these shares fluctuate based on a variety of factors, including the company's financial performance, economic conditions, and investor sentiment.

The stock market serves a critical role in the economy by providing a way for companies to raise capital and for investors to put their money to work in a variety of investment opportunities. The stock market is also closely watched as an indicator of overall economic performance, as it reflects both the health of individual companies and broader economic trends.

There are many different stock markets and exchanges around the world, including the New York Stock Exchange (NYSE), the Nasdaq, and the Tokyo Stock Exchange. Investors can access these markets through brokers and online trading platforms. It's important to note that investing in the stock market comes with risks and requires careful consideration of an individual's financial goals and risk tolerance.

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