What is the stock market?

June 13, 2020 By Jit
What is the Stock Market?

The stock market or the share market is a place where regular activities of buying, selling, and issuance of shares (also called stocks) of publicly-held companies take place. There can be multiple stock trading venues in a country or a region which allow transactions in stocks and other forms of securities.

What is the stock market
What is stock / share?

What is a Share/Stock?

Let’s understand this with a simple example. Suppose, you have 15 rupees which are to be distributed among 3 people. So, each person gets 5 rupees. In this example, the overall amount can be considered as stock and part of the overall amount can be considered as share. So, 3 people own the shares of this stock.

Now every company listed on an exchange is called Stock. You can think of stocks as Companies. Shares are part of your ownership in a company (Stock). If the company performs better then, the price of the shares rises and you make a profit. If it performs poorly then the price of the shares falls and you make a loss.