-It is the same
-There are different stock exchanges. They are all run close to the same way.
-1875 to allow people who have a company to gain investors and money to grow their business.
-You buy and sell stock, you are estenially buying a small portion of the company. The stock prices goes up and down based on how the company does.
-Private means the company does not offer shares for purchase to the public
-??? This is too much to explain.
-There is a general formula based on how much the company is currently making every year to find the intial price
- You sign up
- NO only if you want to give up a part of your company inexcahnge for money
The stock market is essentially an exchange of holdings in a business. The stock exchange and stock market are the same thing, although people may use the words differently in context. For example, the NYSE, which is a stock exchange does not hold every stock in the market. It essentially facilitates trading of companies listed on its exchange. The NYSE was created years and years ago, I can't remember the exact date but I believe it was sometime in the early 19th century. The Nasdaq on the other hand was created relatively recently, early 70's I believe. Nasdaq has been gaining market share, while NYSE is still the largest exchange, it has lost market share to Nasdaq over the years. Those two are the biggest and the only stock exchanges in America you really need to concern yourself with.
Your other questions are broad, so I'm not going to answer all of them, because I would probably run out on my word limit. However, I've been studying finance in college for several years now, and I would recommend you first understand the basic concepts of finance before you plunge into understanding stocks. You have to crawl before you walk. Start by getting a intro to finance textbook that gives you info on time value of money concepts, and basic economics. Math and statistics are especially important in the stock trading business. I would recommend getting the level 1 CFA books if you are fairly familiar with math concepts. They are a little pricy but you can buy them without having to purchase the test. Good luck, finance is really an amazing field once you get into it!
The very most important thing that all you young people need to learn is that, on average, stocks make about 8% per year. Anybody who is trying to double his money every year by day-trading is gambling, not investing. And the vast majority of day traders lose everything.
Stocks are originated when a company needs money to begin business or expand it. This is called an Initial Public Offering (IPO). After they get that money, that is all the company makes from stocks. Stocks go up or down for two reasons, logic and emotion.
Logic dictates that a stock will be priced according to the earnings which goes to each share of stock - that is the only purpose of investing - to get a return on investment.
Emotion influences the price of stock because of expectations of investors. Is business overall in a recession? Is there an expectation of increased earnings? Is this a great industry to be in? Is it a great product? Did something happen to the company which will be bad for business?
Go to your library and get a book called "Learn to Earn" by Peter Lynch. It is written in language you will be able to understand and will inspire you, not just inform you.
I'm 15 and very interested in the stock market so I hope you can answer my questions with understandable words that someone my age can understand
What is the stock market?
What is the stock exchange and is it the same as the stock market?
What is Nasdaq, NYSE and how many stocks exchanges exist in America?
When and why was it created?
How does it work?
What does a private and public comapny mean?
How does the investing work?
Does every company make it's initial stock market price or what happens there?
How does a company get into the stock market?
Does every company need to have a stock market?
