Stock Market
A stock market is a market for the trading of publicly held company stock and associated financial instruments
(including stock options, convertibles and stock index futures).
Trading
Traditionally, stock markets were open-outcry where trading occurred on the floor of a stock exchange. Most modern stock trading is
done in electonic exchanges where buying and selling occurs via online real-time matching of orders placed by buyers and sellers.
Ownership
Many years ago, worldwide, buyers and sellers were individual investors and businessmen. Over time, markets have become more
"institutionalized": buyers and sellers are largely institutions (e.g., pension funds, insurance companies, mutual funds, investor groups,
and banks). The rise of the institutional investor has brought with it an increase of professional diligence which has tended to regulate
the market. The character of markets around the world varies, for example with the majority of the shares in the Japanese market being held by
financial companies and industrial corporations, compared with the broader ownership of stock by individuals in the USA or the UK.
Stock Index
The movements of the prices in a market or section of a market are captured in price indices called Stock Market Indices, of which
there are many, e.g., the Standard and Poors Indices and the Financial Times Indices. Such indices are usually market-capitalisation
weighted.
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