This would be the place where stock investors buy and sell shares showing some percentages in ownership of publicly traded companies. There are several exchanges making up the New York Stock Exchange and the Nasdaq among others. These are the ones that would be providing the platform for conducting transactions. It enables the investor to buy a company's share, which, in other words, refers to being given a part of the company's earnings and assets.
The stock market operates through a chain of brokers and dealers, acting as an agent for both the buyer and the seller. Transactions take place through this agency, and sometimes brokers and dealers are paid in return.
Types of Markets
There are two types of stock markets: the primary market and the secondary market.
Primary Market: When companies go public, they issue new equity to the public market for the first time. All the funds generated through such an issue are used to expand further or fund some other business plan.
Secondary Market: When the shares are sold out in the primary market, they are transferred to the secondary market. That is something one can easily relate to — where most people buy and sell among themselves. A price for a stock will be determined by this marketplace through the forces of supply and demand.
