A stock market, equity market or share market is the (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (also called shares); these may include securities listed on a stock exchange as well as those only traded privately.
A or equity trader or share trader is a person or company involved in .
Stock traders may be an agent, hedger, arbitrageur, speculator, stockbroker or investor. A stock investor is an individual or company who puts money to use by the , offering potential profitable returns, as interest, income, or appreciation in value (capital gains).
This buy-and-hold long term strategy is passive in nature, as opposed to speculation, which is typically active in nature. Many stock speculators will trade bonds (and possibly other financial assets) as well.
Stock speculation is a risky and complex occupation because the direction of the markets are generally unpredictable and lack transparency, also financial regulators are sometimes unable to adequately detect, prevent and remediate irregularities committed by malicious listed companies or other financial market participants. In addition, the financial markets are usually subjected to speculation.
At the close of 2012, the
Trade in stock markets means the transfer for money of a stock or security from a seller to a buyer. This requires these two parties to agree on a price. Equities (stocks or shares) confer an ownership interest in a particular company.
The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery.
People trading stock will prefer to trade on the most popular exchange since this gives the largest number of potential counterparties (buyers for a seller, sellers for a buyer) and probably the best price. However, there have always been alternatives such as brokers trying to bring parties together to trade outside the exchange. Some third markets that were popular are Instinet, and later Island and Archipelago. One advantage is that this avoids the commissions of the exchange. However, it also has problems such as adverse selection. Financial regulators are probing dark pools.