The stock market is one of the main places where investors come together to buy and sell shares in companies. There are many reasons why the stock of a particular company may gain or lose value, from things like new management taking over to the company having a product recall. These factors are what drive the overall movement of the stock market. The appeal of the stock market is that it offers potential for higher returns than other investments like bonds and cash. Major stock market participants include individual retail investors, institutional investors (like pension funds and insurance companies), exchange-traded funds, mutual funds, and banks and various other financial institutions. Robo-advisors that automate investment for individuals are also becoming a large part of the overall market.
When you hear about the stock market, it might seem to be a language that only the insiders understand. However, there is a lot that you can learn about it, so that the thought of investing doesn’t feel completely foreign.
The stock market is the place where buyers and sellers come together to trade stocks in real time. Historically, it was done on trading floors and in person, but now it’s all electronic. The biggest exchanges, like the New York Stock Exchange and Philadelphia Stock Exchange, have specialized systems for pairing up buyers and sellers. These systems, including the Super Dot-like Opening Automated Report Service (OARS), allow traders to send their orders before a security opens on an exchange. This helps the exchange know how many buyers and sellers there are, which will help determine the opening price of a security.
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