A stock market or equity market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (shares); these are securities listed on a stock exchange as well as those only traded privately. Stocks are partitioned in various ways. One common way is by the country where the company is domiciled. For example, Nestle, Roche, and Novartis are domiciled in Switzerland, so they are part of the Swiss stock market. The size of the world stock market was estimated at about $36.6 trillion at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price. The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. Generally considered major stock exchanges are the Amsterdam Stock Exchange, London Stock Exchange, New York Stock Exchange, Paris Bourse, and the Deutsche Börse (Frankfurt Stock Exchange) and Toronto Stock Exchange. In Africa, examples include Nigerian Stock Exchange, JSE Limited, etc. Asian examples include the Philippine Stock Exchange, the Singapore Exchange, the Tokyo Stock Exchange, the Hong Kong Stock Exchange, the Shanghai Stock Exchange, and the Bombay Stock Exchange. In Latin America, there are such exchanges as the BM&F Bovespa and the BMV. Australia has a national stock exchange, the Australian Securities Exchange, due to the size of its population. The stock exchange is based in Sydney.
Thank you for this informational post. I hope this is one of many to come on, you could say, investment lessons. I have a question, you can buy stock from anywhere, right? If I were to live in a country with a horrible stock exchange, could I buy stocks from London, for example?
Of course. There may be countries that have limited either their citizens right to own foreign companies or foreigners owning companies listed in that country, but as a general rule of thumb you can buy from anywhere.
You can try Borsa Istanbul, the stock exchange for Turkey. Overall prices are still low after a 3 day rally, however beware of the political and geographical stress currently surrounding Turkey. Invest wisely. http://borsaistanbul.com/en/
It's actually quite easy to invest in US companies as a foreign citizen. There are US brokerages like etrade and td ameritrade that'll still allow foreigners to create accounts with them. You just need to fill out a w8-ben form.
Excellent information, really could job making it a very readable post. Its a lot to learn at one time but it will be worth it for me in the long run.
I agree with the need for future lessons. You do an excellent job of making this information easy to read. This is not easy when it comes to information about the stock market. Great job!
Future lessons would be great, hopefully someone will be able to take the time to create something like that. I'm trying to learn as much as I can before I jump into it and plan to start small until I feel I have enough knowledge to step it up a level.
Google is the best lesson you can have. Not only for understanding the terms, but also for finding actual lessons.
