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As pandemic unfolds, fear and finance collide

Despite global efforts to stall the spread of the novel coronavirus, growing fears surrounding the pandemic have caused markets to respond with record-breaking volatility. On Monday, the nation's volatility index, often referred ...

Expert sees tough slog ahead for workers, small businesses

With stock markets plummeting despite the federal government's recent steps to try to bolster the economy, worries that COVID-19 could do lasting economic damage are rising. The Gazette spoke with Harvard Business School's ...

Why do banking crises occur?

Why did the U.S. banking crisis of 2007-2008 occur? Many accounts have chronicled the bad decisions and poor risk management at places like Lehmann Brothers, the now-vanished investment bank. Still, plenty of banks have vanished, ...

New systemic approach needed to tackle global challenges

The impacts of the coronavirus on people's health and daily life, stock markets, and businesses illustrate the increasingly interconnected nature of the challenges facing governments around the world. Putting systemic thinking ...

Tiny price gaps cost investors billions

Imagine standing in the grocery store, looking at a pile of bananas. On your side of the pile, the manager has posted yesterday's newspaper flyer, showing bananas at 62¢ per pound—so that's what you pay at the register. ...

Virgin Galactic goes public and leads space tourism race

Richard Branson rang the opening bell at the New York Stock Exchange on October 28 as Virgin Galactic became the first commercial spaceflight company to list on the stock market. It was valued at more than US$1 billion following ...

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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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