Stock Market Basics By Jonathon Hardcastle At Isnare.com Ezine Articles

The term stock market, as the name connotes, is a place where you can market or trade a company's stock, which the corporation issues through shares in order to raise capital. Of course, capital is the cost that a company incurs in relation to producing its products and services.

The people who buy these shares are the shareholders, and the term can refer to an individual or an organization.

The term stock market can also apply to all the stocks available for trading (as well as other securities), for example, when used in terms like "the stock market performed well today."

The stock market involves the trading of bonds, which is a debt security that stipulates that the issuer of the bonds holds the holders a debt. It is exactly like a loan, only that it is in the form of a security. These bonds are traded over-the-counter, which means they are traded directly between two parties. Thisis opposed to exchange trading or the trading that occurs on stock exchanges or future exchanges.

The stock market also involves the trading of commodities, which refer to raw commodities such as agricultural products (coffee, sugar, wheat, maize, barley, cocoa, milk products) and other raw materials (pork bellies, oil, metals).

The stock market is different from the stock exchange, which is primarily concerned with bringing togehter buyers and sellers of stock and securities.

You can participate in the stock exchange as an individual stock investor or as major player (large hedge fund trader). Orders at a stock exchange are usually made through a broker.

There are two types of exchanges where stocks can be traded. There is the exchange that has a physical location where verbal trading takes place. This is the more famous type of exchange because it is often depicted on TV showing animated trader shouting at each other, waving and running around frantically. That's exactly how the stock exchange works. What happens is traders enter into verbal agreements on the prices of stocks. The other type of exhcnage is the virtual kind where traders deal electronically through computer terminals.

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=94593&ca=Finances

Important Notice DISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.