Stock Market

A stock market is a public market for the trading of company stockand derivatives at an agreed price; these are securities listed on astock exchange as well as those only traded privately.
The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008. [1] The total world derivatives market has been estimated at about $791 trillion face or nominal value, [2] 11 times the size of the entire world economy. [3]The value of the derivatives market, because it is stated in terms ofnotional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.
The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States includes the trading of all securities listed on theNYSE Euronext, the NASDAQ, the Amex, as well as on the many regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges include the London Stock Exchange, the Deutsche Börse.
Contents [hide]
1 Trading
2 Market participants
3 History
4 Importance of stock market
4.1 Function and purpose
4.2 Relation of the stock market to the modern financial system
4.3 The stock market, individual investors, and financial risk
4.4 The behavior of the stock market
4.5 Irrational behavior
4.6 Crashes
5 Stock market index
6 Derivative instruments
7 Leveraged strategies
7.1 Short selling
7.2 Margin buying
8 New issuance
9 Investment strategies
10 Taxation
11 See also
11.1 Lists
12 References
13 Further reading
14 External links