The stock market is where investors purchase shares in companies to earn a profit on their investments. Investors can buy shares of stock at the open market through brokerage firms or by purchasing shares through brokerage accounts.

A stock market or equity market is the collection of buyers and sellers of shares of companies; these are known as shares; these can include publicly listed securities, government securities and unlisted securities. The major categories of stock market include the NYSE (New York Stock Exchange), NASDAQ (national association of securities dealers), AMEX (American exchange of exchange) and NYMEX (New York Mercantile Exchange). There are also specialized trading exchanges such as the Chicago Board of Exchange and the New York Board of Trade. All of these exchanges carry a wide variety of financial products; these include stocks of publicly listed companies, securities of foreign governments, and bonds of state-chartered banks. Many companies also issue unlisted shares in their own companies.

The stock market has several types of trading, including day trading, long-term trading and option trading. Day traders buy and sell shares in the open market on particular days, whereas long-term investors hold a position for an extended period of time. An investor must have knowledge of the company and the market trends before purchasing shares. Investors can select from a variety of investment funds to suit their investing goals. Some fund providers offer low-risk investment opportunities for novice traders.

Because the stock market deals with financial assets, it is prone to large price swings; this means that the value of one share can be as much as one hundred times higher or lower than its value at any given time. For this reason, it is necessary to invest carefully and only in stocks that have a high likelihood of increasing in value. The price of shares depends largely on the economy, business performance and the political situation of a country. For example, if a country's economy is doing well, then the value of its stock will likely increase as well.

In addition to the price of the stocks, the stock market varies widely on other factors like the direction of the economy, political instability, and general economic health. In times of uncertainty, the stock market experiences sudden changes that affect investors who are not familiar with these factors. Since the price of a stock can change so rapidly, investors often lose money in the process. Therefore, knowledge of these factors is essential.

The stock market also affects how a country's economy is perceived by other nations. Investors who are not involved in the business may not fully understand the economic conditions of a country and therefore be under-informed about the direction the country is taking. This knowledge can affect the investment strategies that it is undertaking. Investors may choose to buy shares in a country that is in a weakened economy, but they may also take advantage of the opportunities that the country has to stimulate the economy.