A stock market is a cluster of buyers and sellers of the stocks representing the ownership claims on businesses which may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is done through stockbrokerages and electronic trading platforms which is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Investment is usually made with an investment strategy in mind. A stockbroker is a person who is a registered trading representative.
The total market capitalization of equity backed securities worldwide rose from US$2.5 trillion in 1980 to US$68.65 trillion at the end of 2018. As of December 31, 2019, the total market capitalization of all stocks worldwide was approximately US$70.75 trillion. The largest stock exchange markets are US stock exchange, Japan stock exchange and UK stock exchange.
Many large companies have their stocks listed on a stock exchange. This makes the stock more liquid and thus more attractive to many investors. Large companies, mainly the multi national companies have there stocks listed in various stock exchange markets. Trade in stock markets means the transfer (in exchange 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. Equity is ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets.
A potential buyer bids a specific price for a stock, and a potential seller asks a specific price for the same stock. Buying or selling at the Market means you will accept any ask price or bid price for the stock. When the bid and ask prices match, a sale takes place, on a first-come, first-served basis if there are multiple bidders at a given price. The stock exchange provides a safe marketplace facilitating the exchange of securities between buyers and sellers.