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 The stock represents a share of the company capital that can be traded freely at a variable price. The price variations depend on many economical aspects that are global regional and individual for each stock. The stock market represents the total economic transactions made with these company shares through stock exchanges or in private trades.
The stock exchange is the place where the stocks are listed and traded. Here the buyers meet the sellers and the transactions take place. The stock exchanges are usually mutual organizations or just part of national corporations.
The most important stock exchanges in North America are New York Stock Exchange (NYSE) and Toronto Stock Exchange, while in Europe the major stock markets include London Stock Exchange, Deutsche Börse (Frankfurt Stock Exchange), and the Paris Bourse. Asia has its own important stock exchange centers that include the Hong Kong Stock Exchange, the Shanghai Stock Exchange, Tokyo Stock Exchange, and the Bombay Stock Exchange. The early forms of stock exchange appeared in the late 12th century in France. At that point there were just informal places where merchants used to meet to trade commodities. The banks picked up these types of gatherings and five centuries later the very first stock exchange was opened in Amsterdam. Now each developed country has its own stock exchanges. At first the buyers and sellers were wealthy individuals that had could afford to invest in stocks. Things changed overtime and now most traders are institutions such banks as pension funds, investor groups, insurance companies, mutual funds, hedge funds and different financial institutions. In modern economies the stock markets reflect the way the whole economy runs. If the stock market is on the rise than the economy is expanding while if the stocks market is decreasing, the economy passes through a difficult moment. The global stock market is estimated to be around $40 trillion, half the size of the entire world economy and is still growing. |
