What is the Equity Market?

by Investing School on November 29, 2010

Equity market is also known as the stock market. It is a public market, which means a loosely connected network of financial transactions without a specific facility where the transactions are completed. This is a market where shares are distributed and traded. They are managed either via exchanges or in over-the-counter markets.

These markets are vital aspects of a market economy because they provide companies access to cash and also gives investors a chance to have ownership in companies that have the possibility of providing them with high returns.

You can divide the market into two different components. There is the primary market and there is the secondary market. The primary market is the place where new issues of stock are first offered to investors. Any trading that is done subsequent to that is done in the secondary market.

The world stock market was estimated a few years ago at approximately $36.6 trillion US. And, the total world derivatives market was estimated to be at around $791 million at around the same time.

The stocks that are listed and traded on these exchanges are entities that represent a corporation or mutual organization that is designed to bring buyers and sellers together. The stock market or equity market in the United States is located in New York City and is called the New York Stock Exchange. In Canada, it is located in Toronto and is called the Toronto Stock Exchange. Other major exchanges include the London Stock Exchange, Paris Bourse and the Deutsche Borse.

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