What is Stock Market?

The Stock market refers to the collection of markets and exchanges where regular activities of buying & selling of shares of publicly-held companies take place. 


While today it is possible to purchase almost everything online, there is usually a designated market for every commodity. Take an general example, People went to forests and farmlands to purchase trees or visit the local timber market to buy wood and other necessary material for making home furniture and renovations, after that they sell those products into online stores like Amazon, Flipkart etc.

Such dedicated markets serve as a platform where numerous buyers and sellers meet, interact and transact. Since the number of market participants is huge, one is assured of a fair price. For example, if there is only one seller of trees in the entire city, he will charge at any price he wants as the buyers won’t have anywhere else to go. If the number of tree sellers is large in a common marketplace, they will have a competition against each other to attract their buyers. But buyers bargain with low- or optimum-pricing making it a fair market with price transparency. Even while shopping online, buyers compare prices offered by different sellers on the same shopping portal or across different portals to get the best deals, forcing the various online sellers to offer the best price.

A stock market is also exactly similar designated market for trading various kinds of securities in a controlled, secure and managed the environment. Since the stock market brings together hundreds of thousands of market participants who wish to buy and sell shares, it ensures fair pricing practices and transparency in transactions. While earlier stock markets used to issue and deal in paper-based physical share certificates, the modern day computer-aided stock markets operate electronically.