What is the Stock Market? Definition and Concept | Complete Guide

Learn everything you need to know about the stock market

Did you know what the stock market is for or rather, do you know what the stock market is? Learn everything you need to know about this market and the important points that you should take into account when studying this market.

What is the stock market and how does it work?

The stock exchange is the entity in charge of organizing the exchange of goods, assets or products in general. This organization is characterized by regulating or providing the global market through digital auctions.

Known as the Stock Market, the stock market is what drives the economic and financial momentum in many countries, contributing to the development of the capital of companies or individuals.

Technological advances have allowed transactions or exchanges to be carried out through it in a safe and guaranteed manner. Nowadays there are numerous brokers or intermediary platforms that make the work easier.

Like any financial action, it is governed by certain regulations and patterns to which learning and practice time is dedicated so that it guarantees our economic stability and we can enhance it.

The people trained to understand the stock market are stockbrokers , these are basically in charge of being the key factor when making a purchase and sale of assets in the financial market acting as intermediaries who charge commissions and can be legal or personal.

Although it is known that the financial market is much more than graphs and statistics, understanding the stock market is a key element in the economy of a person or company.

What is the stock market for?

The asset market is increasingly known for being a great support for the economy and financial stability of each person. Whether to invest with low capital and then obtain a significant profit in the long term, the Stock Market comes into play when we want to do it safely and follow the same pattern, avoiding a very high loss rate.

However, the stock market offers a great functional variety that many people are unaware of because they do not dare to leave behind conventional and traditional buying and selling. Some of the functions that the Stock Exchange offers us are:

• Promotes the financial development of companies through the capital market and the use of all resources for investment through savings.

• Supports free determination of prices and transparency in its operations, such as interest rates and stock prices.

• It works as a great financial support by having legal security that guarantees that operations are carried out safely and legally; and if not, assume responsibility and respond for them.

How does the stock market works?

The stock exchange tracks the supply and demand for each available stock. This supply and demand, along with other important factors, helps determine a base price for each stock and identifies buying and selling levels among investors and traders.

The correct functioning of the Stock Exchange in the market must be carried out under the existence of two characters, the offeror and the demander. The operating mechanism of this organization is basically known as supply and demand; The more requested a stock is, your investment will increase; if this stock falls, the investment value must be decreased.

Without the offeror, who is in charge of offering the product or a share, the plaintiff would have no way of accessing it, limiting the profits he or she expects to obtain in the long term if he or she decides to act as an offeror by selling the share already acquired. More information on the topic .

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