The share market, which is also known as the equity market or stock market is the collection of various buyers & sellers who deal in stocks.
Stocks/shares represent ownership claims on businesses.
Stock Exchange
A stock exchange is a trade where stock brokers & traders can purchase & sell shares of stock, bonds & various other securities.
Many large-scale companies put up listings of their stocks on stock exchanges, which in turn help liquidize the stock which is attractive to other investors.
Trade
Trade, in terms of the stock market, signifies the transfer of a stock or security to a buyer from a seller. This exchange requires the two parties to decide on a price. Partakers in the stock market span from smaller individual stock investors, right up to much larger investors who deal with multi-million dollar stocks from companies. Their trading orders can be carried out on their behalf by a stock exchange trader. Some exchanges are done in physical locations where the transactions are executed on a trading floor, by a method known as open outcry. The other version of the stock exchange involves a network of computers where the trades are carried out electronically. A prime example would be NASDAQ(National Association of Securities Dealers Automated Quotations).
A prospective buyer bids a certain price for a stock & similarly, a prospective seller asks for a certain price of the aforementioned stock.
When there is unison between the prices, a sale takes place based on first-come, first-serve if many bidders are involved. The sole purpose of a stock exchange is to ease the process of exchanging of stocks or securities between the buyers & sellers, in turn acting as a marketplace.
The stock market is one of the principal modes of raising funds alongside debt markets. This allows for public trading of businesses, as well as raising additional capital for expanding the company by selling shares of ownership in a public marketplace. The seamless functioning of the stock markets aids the economic growth of the companies selling ownership shares to the public.
