When the stock market is concerned, you will hear terms such as stock options, stock index futures, convertibles and such. This could be quite confusing to the greenhorn but for some this is what they breathe day in and day out. To begin with, the stock market is the venue where publicly open company stocks are traded, bought and sold. The term stock market deals with all the stocks being traded all over the world. Most countries have their own stock market where in they deal with the financial instruments their country has. For example, in the United States, there is the NYSE, NASDAQ and Amex stock. Large companies though have been known to be traded in many places.

Anyone can invest in the stock market. Before, individuals such as businessmen and people with money to invest dominated the stock market investors, now, large corporations and companies have become buyers and sellers. These “institutional” investors have increased the stock market making it a very good investment. Takeovers and merges have been a deciding factor in the rise and fall of the stock prices for these companies. Generally, investors can buy shares of the companies that have been opened to the public for trading. These shares represent a portion of the company and investors are called stockholders. These means that they own part of the company. The prices are determined by the growth of the company and their profits and success or by its losses as well. The movements of the prices of the stocks of company can be seen on stock market indices. Stock markets have stock market indices to provide that all important information of the price movement to the brokers and the investors. Many people consider the stock market to be a very risky venture. As the prices drop and rise, your investment is on a roller coaster ride. There is no guarantee that the value of your stocks will go up. This is especially on cases stocks of companies that are just starting, but with the higher risk comes the bigger payoff. If the company makes it big you make a big profit. Stocks for starting companies are low and when it becomes a success, the prices will rise up. Large and well established companies and corporations have better chances with having their stocks growing.

These are stock exchanges where the exchange of stocks takes place between the buyers and the sellers. In effect these are the actual stock markets but the term stock market is used in a broader term to signify the overall stock holdings, indices, exchanges and everything else related to stocks. 1792 and is located at the epitome of the US financial icon street called the Wall Street. It is undoubtedly one of the largest exchanges in the country. All the companies aspire to be listed here so there shares can be traded on this exchange but before a company can be listed here they have to complete certain set of criteria in terms of financial strength as well as the industry they operate in.

Similar to NYSE is American stock exchange which is again in the financial district of the country called New York. The American exchange has stocks for trading but also has options for trading. The AMEX can trade smaller companies than traded in NYSE and hence it is attractive to a lot of companies. NASDAQ is the baby of them all though not in terms of the sheer size of companies listed on it and the full form of NASDAQ is National Association of Securities Dealers Automated Quotations. It began in 1971 and has almost any company you could think of listed there. Historically though it was known for technology companies like Microsoft and Intel and a lot of new technology start ups like to list here. This exchange does not have a physical building and it works a computer network where buyers and sellers meet through computer software and sell or buy stocks.