The Stock Market Part II - In Layman's Term

For those beginners in the Stock Market field, one of the hardest part in understanding the niche is when they encounter a very technical terminologies which only leads in confusion in the subject matter. This leads me to search an article about what is stock market, in much simpler wordings or in Layman's term. Here's what i found.

What Is the Stock Market? Basics for bulls and bears by Holly Hartman

The word stock simply refers to a supply. You may have a stock of T-shirts in your closet, or a stock of pencils in your desk. In the financial market, stock refers to a supply of money that a company has raised. This supply comes from people who have given the company money in the hope that the company will make their money grow.

A market is a public place where things are bought and sold. The term "stock market" refers to the business of buying and selling stock. The stock market is not a specific place, though some people use the term "Wall Street"—the main street in New York City's financial district—to refer to the U.S. stock market in general.

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The Stock Market – Brief Explanation

As my first post, I will discuss briefly the topic “What is Stock Market?” which meant for those beginners out there who interested to learn about share trading and other stuff happening in the Stock Market.

The stock market appears in the news every day. You hear about it any time it reaches a new high or a new low, and you also hear about it daily in statements like "The Dow Jones Industrial Average rose 2 percent today, with advances leading declines by a margin of..." Obviously, stocks and the stock market are important, but you may find that you know very little about them. What is a stock? What is a stock market? Why do we need a stock market? Where does the stock come from to begin with, and why do people want to buy and sell it? If you have questions like these, then this blog will open your eyes to a whole new world!

So what is this market all about? Consulting some online references and dictionaries, Stock Market is where shares of stocks are bought and sold. A share is a portion of the total ownership of a corporation. The more shares you own in a corporation, the more ownership you have in that corporation. Stock market also refer as a place where private and public trading of company stocks and derivatives of company stock at an agreed price is happened. It is said that the size of the stock market is estimated at about $51 trillion. The world derivatives market has been estimated at about $480 trillion face or nominal value, 30 times the size of the U.S. economy. and 12 times the size of the entire world economy. How big is that huh?

History
Originating in the Netherlands and Great Britain during the seventeenth century, stock exchanges initially enabled investors to buy and sell shares of companies to raise money for overseas expansion. Called "bourses," these exchanges eventually began dealing in the public securities of banks, insurance companies, and manufacturing firms. Until World War I, the London Stock Exchange was the largest and busiest in the world. Although inaugurated in 1792, when twenty-four New York merchants signed the Buttonwood Agreement, and formally organized in 1817, the New York Stock Exchange (NYSE), which is located on Wall Street in New York City, was small by comparison to the European bourses, with an average of only 100 shares traded per session. The NYSE attained preeminence only after World War I, which had disrupted the financial markets of Europe and transformed the United States into an economic power of the first order.

The stock market is one of the most important sources for companies to raise money. This allows businesses to go public, or raise additional capital for expansion. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate.