What is stock market in simpler words?

For basic financial terms and definitions, check this out.

To understand what a stock market is, first, we need to learn about a share. What is a share or a stock?

Think of a share as a piece of a company. For example, in an overly simplified world, if a company’s capital(initial investment in terms of money) is INR 50,000, and is divided into five shares, each share value is INR 10,000. This is also called stock in general terms. Each share is also exchangeable, which means you can buy or sell in the market, called share market.

The stock market is also known as a share or equity market. It is a marketplace where investors buy and sell shares of publicly traded companies. A share represents a part or unit of the company’s capital. 

For example, if you buy shares/stocks of Apple, if the company grows well or makes profits, then you will earn good money or high returns when you sell the company’s shares in the market place.

Stocks/ shares / equity

The stocks and shares are securities that provide ownership or equity to an investor in a public company. 

There is a difference between a stock and a share in technical terms, although some countries use them interchangeably. Stock is used to describing ownership in one or more companies, whereas a share represents ownership in a particular company. So, for example, if someone says, I own a stock, you can ask which company? As there is more than one company involved in a stock.