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An Introduction To The Stock Market

Aug 17, 2007
A stock market is basically both the physical location where stocks are traded as well as the stocks themselves. The combined activity of stocks leads to the ups and downs of the market as a whole. Stock exchange is something entirely different, and refers to a particular company and its stocks.

1. The Stock Exhange

Worldwide, it is possible to buy and sell stocks. The only restriction is the opening hours of each exchange. Both the NYSE and Nasdaq for example operate from 9 - 30 a.m. to 4 - 00 p.m. Eastern Time from Monday to Friday. Other exchanges have similar opening hours based on their local time. The most usual hours are between 9 - 30 AM and 10 - 30 PM.

2. Major Exchange Locations

Japan - Tokyo Stock Exchange
India - Bombay Stock Exchange
Europe - London Stock Exchange
SWX - Swiss Exchange
China - Shanghai Stock Exchange
United States - NYSE, Nasdaq, and Amex

3. Good Stocks Equals Good Economic Health

When the economy is doing well the market is strong. A strong market is sometimes also called a bull market. Bull markets occur during times of high economic production, low unemployment and low inflation. Bear markets, on the other hand, follow downtrends in the economy - inflation and unemployment are rising and stock prices fall.

4. Change Is Good

The stock market is largely controlled by supply and demand. A rise in stock price might cause investors to jump on the bandwagon and thus the price will rise even higher. A falling price might have the same effect, causing investors to jump ship and try and sell all their shares as quickly as possible.


As the largest in the world, the FOREX market buy one currency against another and individual investors profit from very small changes in value. Most FOREX trades exist only for 24 hours and so traders keep a very close watch on the market to make a profit.

6. The Options Market

The Options Market is similar to 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 specified date. This means that if you want to sell but want to hold out a bit longer for a better buyer, you can.

7. Futures

Significantly different from the FOREX market, a Futures Market is where contracts to buy and sell goods at specified prices are traded. Because market conditions make the actual futures contract fluctuate considerably in value, most investors in the futures market are not interested in the actual goods - only in the profit that can be realized in trading the contracts.
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