“Stock market” is a term used to refer to both the physical location for buying and selling stocks, as well as general market activity within a given country. When you hear “The stock market fell today,” you are referring to the combined activity of many stock markets.
The major US stock exchanges are the New York Stock Exchange (NYSE), the American Stock Exchange (Amex) and NASDAQ.
The correct term for the physical location of stock trading is “Stock Exchange”. A country can have many different stock exchanges. Usually, the shares of a particular company are traded on a single exchange, although large corporations may be listed on several.
Invest around the world
There are stock exchanges located all over the world, and it is possible to buy or sell shares on any of them. The only restriction is the hours of operation of each exchange. Both the NYSE and NASDAQ, for example, trade from 9:30 am to 4:00 pm Eastern time, Monday through Friday.
Other exchanges have similar opening hours based on their local time. When trading on the Hong Kong Stock Exchange, your order will be executed sometime between 9:30 pm and 4:00 am New York time.
The locations of the world’s major stock exchanges are:
Japan (Tokyo Stock Exchange)
India (Bombay Stock Exchange)
Europe (London Stock Exchange, Frankfurt Stock Exchange, Swiss Stock Exchange SWX)
the People’s Republic of China (Shanghai Stock Exchange)
United States.
Stock Market Fluctuations
The economic health of a country will strongly influence its stock market. When the economy is doing well, the market is bullish. Bull markets occur during times of high economic output, low unemployment, and low inflation. Bear markets, on the other hand, follow downturns in the economy. When inflation and unemployment rise, stock prices tend to fall.
Stock price fluctuations are also driven by supply and demand, which in turn largely depends on investor psychology. Seeing a stock price go up quickly can make investors jump on the bandwagon, and this rush to buy makes the price go up even faster. A price drop can have a similar effect in the other direction. These are short-term fluctuations. Stock prices tend to normalize after such runs.
The stock market is just one of many opportunities for people to invest. Other popular markets include the foreign exchange market (FOREX), the futures market, and the options market.
FOREX: the largest market in the world
FOREX is the largest investment market (in terms of value) in the world. FOREX traders buy 1 currency against another and can benefit from small changes in the value of the currency. Most FOREX trades are entered and closed within 124 hours, and traders need to keep a close eye on the market to make profitable trades.
futures market
The Futures Market is a market for contracts to buy and sell certain commodities at specified prices and times. It exists because buyers and sellers of goods want to fix prices for future deliveries, but market conditions can cause the value of the actual futures contract to fluctuate considerably.
Most investors in the futures market are not interested in the actual goods, only the profit that can be made by trading the contracts.
the options market
The Options Market is similar to the Futures Market in that an option is a contract that gives you the right (but not the obligation) to trade a stock at a certain price before a specific date. These options can be traded on their own or purchased as a form of insurance against price fluctuations within a given period of time.
Stocks: low risk, long term
All 3 of these markets are considered quite risky without considerable knowledge and experience. They also require close monitoring of market movements. Stocks, on the other hand, are less risky because market movements are usually more gradual. Although short-term investment strategies are possible, most people view stocks as long-term investments.