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Questions and Answers
What is the primary function of a stock market?
Who are the individuals, institutions, and organizations that buy and sell stocks?
What is the name of the platform where stocks are traded?
What is the term for a measure of the overall performance of a particular stock market or segment?
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What is the term for a prolonged period of rising stock prices and economic growth?
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What is the term for instructions to buy or sell stocks?
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What is the type of stock that represents ownership in a company and gives voting rights?
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Which organization is the primary regulator of the US stock market?
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What is the term for stocks that pay regular dividends to shareholders?
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What is the term for a self-regulatory organization that oversees brokerages and trading activities?
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Study Notes
Stock Market
Definition
- A stock market, also known as an equity market or share market, is a platform for buying and selling company stocks and other securities.
Key Players
- Investors: Individuals, institutions, and organizations that buy and sell stocks.
- Listed Companies: Publicly traded companies that issue stocks to raise capital.
- Stock Exchanges: Platforms where stocks are traded, e.g., New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE).
- Brokerages: Intermediaries that facilitate buying and selling of stocks, e.g., Merrill Lynch, Charles Schwab.
Stock Market Indices
- Stock Market Indices: Measures of the overall performance of a particular stock market or segment, e.g., S&P 500, Dow Jones Industrial Average (DJIA), FTSE 100.
- Index Components: Stocks that make up an index, e.g., Apple, Microsoft, Amazon.
Stock Trading
- Bull Market: A prolonged period of rising stock prices and economic growth.
- Bear Market: A prolonged period of falling stock prices and economic decline.
- Orders: Instructions to buy or sell stocks, e.g., market order, limit order, stop-loss order.
- Trading Hours: The time period when stock markets are open for trading, e.g., 9:30 am - 4:00 pm ET (NYSE).
Stock Types
- Common Stock: Represents ownership in a company and gives voting rights.
- Preferred Stock: Has a higher claim on assets and dividends than common stock, but typically no voting rights.
- Growth Stocks: Stocks of companies expected to grow rapidly, e.g., technology startups.
- Dividend Stocks: Stocks that pay regular dividends to shareholders.
Regulation
- Securities and Exchange Commission (SEC): The primary regulator of the US stock market.
- Financial Industry Regulatory Authority (FINRA): A self-regulatory organization that oversees brokerages and trading activities.
Stock Market
- A platform for buying and selling company stocks and other securities
Key Players
- Investors: individuals, institutions, and organizations that buy and sell stocks
- Listed Companies: publicly traded companies that issue stocks to raise capital
- Stock Exchanges: platforms where stocks are traded, e.g. New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE)
- Brokerages: intermediaries that facilitate buying and selling of stocks, e.g. Merrill Lynch, Charles Schwab
Stock Market Indices
- Measures of the overall performance of a particular stock market or segment
- Examples of stock market indices include S&P 500, Dow Jones Industrial Average (DJIA), FTSE 100
- Index components are the stocks that make up an index, e.g. Apple, Microsoft, Amazon
Stock Trading
- Bull Market: a prolonged period of rising stock prices and economic growth
- Bear Market: a prolonged period of falling stock prices and economic decline
- Orders: instructions to buy or sell stocks, e.g. market order, limit order, stop-loss order
- Trading Hours: the time period when stock markets are open for trading, e.g. 9:30 am - 4:00 pm ET (NYSE)
Stock Types
- Common Stock: represents ownership in a company and gives voting rights
- Preferred Stock: has a higher claim on assets and dividends than common stock, but typically no voting rights
- Growth Stocks: stocks of companies expected to grow rapidly, e.g. technology startups
- Dividend Stocks: stocks that pay regular dividends to shareholders
Regulation
- Securities and Exchange Commission (SEC): the primary regulator of the US stock market
- Financial Industry Regulatory Authority (FINRA): a self-regulatory organization that oversees brokerages and trading activities
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Description
Learn about the stock market, its key players, and how it works. Understand the roles of investors, listed companies, and stock exchanges in the equity market.
