Term: Stock market

The stock market is the collective system through which shares — small ownership pieces of publicly listed companies — are bought and sold. It is not one physical place anymore; it is a network of exchanges (like the NYSE or Nasdaq) and electronic systems that match buyers with sellers and record the resulting trades.

When a company wants to raise money, it can sell shares to the public for the first time in an IPO (initial public offering). After that, those shares trade among investors on an exchange, and the price moves based on how many people want to buy versus sell at any given moment — this ongoing buying and selling is what people mean when they say "the market."

A common point of confusion: the stock market itself doesn't set prices by decree. Prices emerge from an order book, where buy orders (bids) and sell orders (asks) are matched. When you hear an index level quoted, like "the S&P 500 is up 1% today," that's a summary of price movement across a basket of stocks, not the whole market moving as one block — individual stocks can go the opposite direction on the same day.

It's also worth separating "the stock market" as an abstract concept from the specific venues where trades actually execute. A day trader doesn't trade "the market" directly; they place orders through a broker, which routes those orders to an exchange or another venue for execution.