What is the Stock Market?

The Stock Market refers to the public markets that exist for buying, selling, and issuing/distributing stocks, that are traded on a "stock exchange" or "over-the-counter".

 

But, what does these terms mean?

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- A stock is a part of a company (like a slice of a pizza!). It's a fractional ownership in a company.

- An stock exchange is a place, big organized market, where people can buy and sell stocks. For example the NYSE (New York Stock Exchange) and the NASDAQ (National Association of Securities Dealers Automated Quotations).

- And "over-the-counter" refers to when stocks are bought and sold directly person to person, like a private deal.

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An Stock Market that is efficiently functioning is considered critical to the economic development, because it gives companies the ability to quickly access capital (economical) from the public/society.