The stock market is where investors can buy and sell shares in publicly-traded companies. A share represents a ownership stake in a company; as a shareholder you get one vote per share owned (unless there are multiple classes of shares with different voting rights). The stock market is regulated by the Securities and Exchange Commission and individual state securities departments. Market participants include individuals, financial institutions (e.g., mutual funds, pension funds, insurance companies and banks) and public corporations trading in their own shares. Robo-advisors that automatically invest for individuals are also a growing part of the stock market.
The primary role of the stock market is to help companies raise money by offering their shares for sale and providing an opportunity for investors to gain wealth over the long term through capital growth and dividends. The stock market is also used as a way to monitor the health of the economy and can be viewed as a barometer of consumer sentiment.
Buying and selling stocks is done by placing a trade through an intermediary such as a broker or an online self-directed investing platform. The days of energetic trading floors and paper trades through postal dealing slips are mostly gone – most trading is now done electronically, with orders being added to an electronic order book where they are matched by market makers at the bid or ask price that each investor is willing to pay or sell at. Traders can buy and sell shares during all hours of the day, and even when markets are closed with digital self-directed platforms that process trades during extended trading periods before and after the regular market day.