We all have a more or less close idea of what the Stock Market is.We cannot define it precisely, but several images come to mind as soon as we hear about this concept. And you, could you tell us what it is exactly? Do you have any idea how the Stock Market works ?
What is the Stock Market? Simple explanation and some general considerations
The Stock Market remember, is that space in which company shares are bought and sold. It does not exist as such; that is to say, it is not a physical place as are, for example, the headquarters of companies or financial corporations.
This is not to say, however, that it has no impact on organizations or physical entities. On the contrary, many of
the movements that take place in the Stock Market determine the present and future performance of all the companies that actively participate in it.
In fact, when facilitating the explanation of this concept, many experts use the simile of the fruit market in which we can find bananas, strawberries, apples or pears. The difference is that in the Stock Market there are no such foods, but rather financial products such as bonds, currencies, credits, debts and derivatives.
How does the stock market works? Key points:
To go even deeper into the operation of the Stock Market, let’s review a series of essential concepts and points. Let’s see:
- The Stock Market is a generic concept. In fact, there are several exchanges in the world where companies and entities belonging to specific markets are listed: the Commodity Exchange, the Futures Exchange and the Stock Exchange, among others. All these exchanges can operate in the national, regional or international framework depending on the line of stock products offered in the market or even on the market rates.
- The Stock Market is a space where companies buy or sell shares. Their price is set by the free market; that is, those who are willing to buy make an offer and those who want to sell decide whether to accept it or reject it. They are the so-called stock market operations.
- Stock brokers are intermediaries between buyers and sellers of stocks. Supported by information technology and the resources of the digital age, many of them offer investors the purchase of shares in different markets; it is enough for clients to indicate which markets they wish to trade in and the brokers take care of the rest. Some brokers are more prestigious than companies.
- The offers that circulate on the Stock Exchange are public. For the offer to gain credibility and prestige, it is normal for those who put shares or stock products up for sale publish all the information related to said offer. From that moment on, any company or private agent can know the characteristics of the offer and the financial statements of the companies that have put it on the Stock Market.
- In the Stock Market it is important that the information is permanently updated. The objective is for potential investors to analyze whether the products on offer are suitable for their interests or not. The quality or viability of the offers can vary significantly from one day to another.
The Stock Market offers enormous possibilities to increase (or recover) the profits of companies with stocks such as Pinterest stock providing great returns for their investors. The key is to make the offer attractive and attract the attention of a good number of investors. For more information, you can do a web search and find many financial articles that can help people understand the stock market.
