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Why short selling is good for the capital markets

Short selling often gets a bad rap because it is a type of trade that bets against the success of a firm. In essence, short selling allows investors to borrow stock from a broker to sell into the market with the hope of buying ...

COVID-19 hit stock markets as it spread from country to country

As Covid-19 spread around the world, stock markets in individual countries took a major hit—yet stock markets in China where the disease first struck avoided significant falls—researchers at Lero, the Science Foundation ...

Market report: Rising stock wealth does boost spending, employment

The stock market is a staple of business news, but it is unclear how meaningful stock prices are to the larger economy. Do changes in stock prices directly affect shorter-term consumption, or are they just leading indicators ...

Study detects lottery-like behavior in cryptocurrency market

Recent research from the University of Vaasa and the University of Jyväskyla shows that speculation and lottery-like behavior is a fundamental factor for the pricing of cryptocurrencies. Speculation could explain the enormous ...

New tool can help predict the next financial bubble

An international team of interdisciplinary researchers has identified mathematical metrics to characterize the fragility of financial markets. Their paper "Network geometry and market instability" sheds light on the higher-order ...

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Stock market

A stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.

The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States includes the trading of all securities listed on the NYSE Euronext, the NASDAQ, the Amex, as well as on the many regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges include the London Stock Exchange, the Deutsche Börse.

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