Investing 101
1:35
What is the Stock Market? | The Stock Market Explained
The stock market is where all stock trading happens. Understanding how it works is key before investing. Learn about it with Titan's Emily Bice.
Video Transcript
The stock market is where people can buy, sell and trade their ownership in companies with other investors. Let's say you want to own a piece of Starbucks, the company. Since Starbucks is listed on the stock market and makes shares of their company available to the public, you can buy yourself a share of Starbucks and hold it forever. Or sell it whenever you want, ideally when it increases. When most people think of the stock market, they envision the New York Stock Exchange trading floor with its shouting brokers negotiating buys and sells via hand signals.
But most exchanges have changed over to electronic trading platforms. Still, the basic idea remains the same. Buyers want to buy a stock low and sell it high for a profit later, and sellers naturally want the best price they believe they can get. This whole process is largely governed by the economic law of supply and demand. Today, the global stock market is made up of more than 60 stock exchanges around the world.
The New York Stock Exchange and the Nasdaq are stock exchange names you may have heard of before, but others exist around the globe, like Euronext and the Shanghai Stock Exchange. One last interesting fact: institutions account for 70 to 80 percent of the total volume of shares transacted in the stock market on average. So when you invest in the stock market, you'll invest alongside hedge funds, college endowments, pension funds, and investment managers like Titan.
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