12 Things To Know About The Stock Market

12 Things To Know About The Stock Market — page 1 — 1 THE STOCK MARKET THE STOCK MARKET IS NOT A PLACE IS NOT A PLACE The stock market is a term that describes buying and selling stocks It is not an actual place people can visit People do not buy stocks at a stock market the same way they would buy an apple at a grocery store People All of the stocks across the world communicate to buy and sell stocks 4 that are bought or sold in the world are part of a stock market The stock market is global People and 55 trillion Value of shares traded in the world stock market in 2013 The stock market is how we refer to the organized network of people who buy and sell shares in companies It is not a place you can visit such as a grocery store It is not limited to one country or region Companies that sell shares in the stock market need to raise money Investors buy those shares and the company gets the money it needs

12 Things To Know About The Stock Market — page 2 — SCRIPOPHILY Companies issue paper certificates for their stock Stock certificates show the number of shares that are owned by whoever has the certificate Stock certificates especially old ones are popular with collectors These old stock certificates are valuable even if the company no longer exists The study and collection of stock certificates is called scripophily Old stock certificates such as this one are valuable to collectors companies all around the world can buy and sell stocks An investor in Los Angeles can buy stock in a company in Beijing An investor in Tokyo can buy stock in a company in London When a company needs money one way to get that money is to sell stocks Investors or people who buy stock in a company will give the company money In return the investors own part of the company Companies that want to sell stock are listed on a stock exchange The stock exchange is the actual place where investors can buy stocks 5

12 Things To Know About The Stock Market — page 3 — 2 THERE IS MORE THAN ONE STOCK EXCHANGE Countries around the world participate in the stock market Most of them have at least one stock exchange In the United States there are several main stock exchanges The New York Stock Exchange NYSE is on Wall Street in New York City The American Stock Exchange is now part of the NYSE The National Association of Securities Dealers Automatic Quotation System NASDAQ is the largest electronic equities market in the country Two other major exchanges are the Chicago Board of Operations and International Securities Exchange Different stock exchanges may sell different types of stocks NASDAQ for example sells a lot of technology stocks But that does not mean a technology company has to list its stock on NASDAQ Companies choose where they want to list their stock At the same time stock exchanges can choose the The floor of the New York Stock Exchange is a busy place 6

12 Things To Know About The Stock Market — page 4 — companies they list A company does not have to list its stock on a particular stock exchange And a stock exchange does not have to list a particular company 60 Number of stock exchanges worldwide listed on the World Federation of Exchanges A stock exchange is a place where stocks are bought and sold Companies can list their stocks on many different stock exchanges at the same time Major stock exchanges in the United States include the NYSE the American Stock Exchange and NASDAQ Foreign stock exchanges include the London Stock Exchange in England the SIX Swiss Exchange in Switzerland and the Zhengzhou Commodity Exchange in China OPEN OUTCRY VERSUS ELECTRONIC EXCHANGE The traditional way stocks are bought or sold is called open outcry Stock exchange workers who are buying or selling stocks of a company meet at a post on the stock exchange floor There they bid on the selling price of the stock Today many stock exchanges use electronic exchange In electronic exchange bidding happens electronically Advanced computer systems match up buyers and sellers Many technology companies choose to list their stock on NASDAQ 7

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