What is stock market and how it works

Stock is the share of people in the company which is registered in stock market. We can also define as stock is a unit of share a company owns. Company sale and purchase these units or stocks to and from people or public.

Stock market is the place where brokers sale and purchase stocks. The brokers tend to sale market stock with the help of people working in stock market. They do business on daily basis. The stock market depends upon the situation of country and neighbor environment of other countries. There are two types of buyers in the stock market. One is basic buyer and other is technical buyer. Basic buyer tend to buy stock after searching company portfolio and history of company profits and loss. The company profit/loss can be easily seen by the annual reports. Technical buyer first do research on all the related companies without depending on profit and loss ratio. They depend on graphs and other sophisticated algorithms of previous 10 years.

Before discussing details about how stock market works let me first tell you some of stock markets which control all the world markets. The major countries which have stocks popular are United States, Japan and United Kingdom. Other countries are India, Germany, Canada and china etc.

There are two types of stock markets, one is manual and other is computerized. Manual market involve vocal speaking of brokers to buy and sell stocks and computerized market are those in which people sell and buy equities(stock) by sitting at their PC.

Stock market is controlled by stock exchange. Stock exchange watch the stock market and people to have fraud free environment. Brokers are group of people which work for a company. One company in stock market opens one or more accounts in stock market. These accounts are then managed by brokers. People come to these brokers to have their stock sale and purchased. People are given terminal or PC approach to get access to stock market. People sale and purchase stocks by sitting at their homes. Companies distribute profits and quarterly reports, meetings and announcements through brokers to share (stock) holder.

The up and downfall of market depends upon the economy and financial situation of local country. When market goes up (bull market) then brokers get more business and when market crashes or goes down (bear market) then people tend to avoid business during that day. Some experienced share holder buys stocks from the bear market for long term investment.

If someone want to study more about stock market and how all the processes then they can go deep into it also. Have a good day. Take Care.