Understanding the Stock Market???? and Its Exchanges??
The stock market ??
Businesses can raise money by selling investors shares of stock, or equity, on the stock market. In addition to voting rights, stocks grant shareholders a residual claim on the profits of the company in the form of dividends and capital gains.
To purchase and sell shares in a public market, individual and institutional investors congregate on stock exchanges. When you purchase stock on the stock exchange, you are purchasing it from an existing shareholder rather than the company.
On stock exchanges, both individual and institutional investors congregate to purchase and sell shares in a public setting. As buyers and sellers place orders, supply and demand determine share prices.
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The biggest stock exchanges
In the 16th and 17th centuries, Europe saw the emergence of its first stock markets, primarily in port cities or major trading hubs like Antwerp, Amsterdam, and London. America saw the emergence of stock markets in the late 18th century, most notably the New York Stock Exchange (NYSE), which permitted the trading of equity shares.
The Philadelphia Stock Exchange (PHLX), which is still in operation today, was America's first stock exchange. When 24 stockbrokers and merchants from New York City signed the Buttonwood Agreement in 1792, the NYSE was established. Prior to this formal incorporation, brokers and traders would meet informally on Wall Street to buy and sell shares under a buttonwood tree.
The emergence of contemporary stock markets brought about a period of professionalization and regulation that guarantees share buyers and sellers can rely on their transactions to be completed at fair prices and in a reasonable amount of time. In the United States and around the world today, there are numerous stock exchanges, many of which are connected electronically.