The term "Stock Market" can mean both the place where you can buy and sell stocks and the overall activity of the market in a certain country. When someone says, "The stock market was down today," they are talking about how many stock exchanges did as a whole.
The New York Stock Exchange (NYSE), the American Stock Exchange (Amex), and NASDAQ are the most important exchanges in the US.
The correct name for the place where stocks are bought and sold is "Stock Exchange." There may be more than one stock exchange in a country. Usually, a company's stocks are only traded on one exchange, but big companies may be listed on more than one.
Investing in Every Country
There are stock exchanges all over the world, and any of them can be used to buy or sell stocks. The only rule is that each exchange can only happen during certain hours. For example, the NYSE and NASDAQ are both open from 9:30 a.m. to 4 p.m. Eastern Time, Monday through Friday.
The hours that other exchanges are open are similar based on their local time. When you trade on the Hong Kong Stock Exchange, your order will be carried out between 9:30 pm and 4:00 am New York time.
The biggest stock exchanges in the world are located in:
Japan (Tokyo Stock Exchange)
India (Bombay Stock Exchange)
Europe (London Stock Exchange, Frankfurt Stock Exchange, SWX Swiss Exchange)
China's government is run by the people (Shanghai Stock Exchange)
US.
Changes in the stock market
The stock market of a country will depend a lot on how well its economy is doing. When things are going well in the economy, the market is bullish. Bull markets happen when the economy is making a lot of money, unemployment is low, and inflation is low. On the other hand, bear markets happen when the economy is in a bad spot. Most of the time, stock prices go down when inflation and unemployment go up.
Changes in stock prices are also caused by supply and demand, which are in large part based on how investors feel. When the price of a stock goes up quickly, investors may rush to buy it, which makes the price go up even faster. A price that goes down can have the same effect in the opposite direction. These are just short-term changes. After a run like this, stock prices tend to go back to normal.
The stock market is just one way that people can invest their money. The Foreign Exchange Market (FOREX), the Futures Market, and the Options Market are also well-known.
FOREX: The biggest market in the world
The FOREX is the world's largest investment market in terms of value. FOREX traders buy one currency in exchange for another and can make money from small changes in the value of the two currencies. Most FOREX trades start and end in one 24-hour period, so traders have to keep a close eye on the market to make trades that are profitable.
The Market for Futures
The Futures Market is a place where people can buy and sell contracts to buy and sell goods at certain prices and times. It exists because buyers and sellers of goods want to lock in prices for future deliveries, but the actual value of a futures contract can change a lot depending on how the market is doing.
Most people who invest in the futures market don't care about the goods themselves. They only care about how much money they can make by trading the contracts.
The Market for Options
The Options Market is like 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 certain date. You can trade these options on their own or buy them as insurance against price changes in a certain amount of time.
Stocks: Low Risk, Long-Term
Without a lot of knowledge and experience, all three of these markets are pretty risky. They also need to keep a close eye on how the market moves. On the other hand, stocks are less risky because the market tends to move more slowly. Even though there are ways to invest for the short term, most people see stocks as investments for the long term.
