Stock market
What is it?
An organized market where financial securities such as stocks and bonds are bought and sold. Stock markets facilitate the trading and liquidity of financial assets between investors, providing a space where buyers and sellers can exchange assets efficiently and transparently.
Stock markets are essential for the functioning of economies, as they allow companies to raise capital by issuing stocks and bonds, while offering investors the opportunity to purchase assets to diversify their portfolios and generate returns. Additionally, they provide a price-setting mechanism based on supply and demand, which reflects the current value of the assets in circulation.
Key aspects to consider
In the stock market, two main types of assets are traded:
Stocks: Represent a share in the ownership of a company and grant rights to its profits and assets. Bonds: Are debt instruments issued by governments, companies, or institutions, allowing investors to receive periodic interest payments and the repayment of capital at maturity.Stock markets provide investors the ability to trade in primary markets (where new securities are issued) and in secondary markets (where previously issued securities are traded). The existence of an organized infrastructure for buying and selling securities ensures transparency, liquidity, and efficiency in transactions.
These markets also play a crucial role in asset valuation and risk distribution, as they allow investors to access a variety of financial instruments that can align with their objectives and risk profiles.