Stock Markets

Stock markets exists all over the world. The biggest in the United States is the New York Stock Exchange (NYSE), but the NASDAQ is very big also.

Other countries have large stock markets, too. There are large exchanges in London, Paris, Nigeria, Bombay, Tokyo and Hong Kong.

The New York Stock Exchange is a physical exchange--trades are made between buyers and sellers on the actual floor of the exchange.

The NASDAQ is a virtual exchange, where all of the trading is done over a computer network. The process is similar to the New York Stock Exchange. However, buyers and sellers are electronically matched.

When investors are buying and selling a lot of stocks, it is called a bull market (because bulls ‘charge ahead’).

Bull or bear?

When investors buy and sell less and are a lot more cautious, it is called a bear market (because bears ‘hibernate’ and don’t do much).

It is usually hard to make a lot of stock trades in a ‘bear’ market. Investment brokers want their investors to think the market is a ‘bull’ market as much as possible.

A stock market crash is a sharp dip in share prices of stocks in a single day. There have been famous stock market crashes that have ended in the loss of billions of dollars.

Was that a crash?!

One of the most famous stock market crashes started October 29, 1929 on a day that became known as Black Thursday. The Dow Jones Average lost 50 % during this stock market crash. This was the beginning of the Great Depression.