How Does The Stock Market Work?

The stock market works like any other market in the world. Most stock markets in the world are regulated by the Government in some way or the other. Governments apply regulations so that no individual or group of individuals can manipulate the stock market at the expense of the general public.

Companies are allowed to list their stocks on the stock market. The stock market is a place where these stocks are traded. People can buy and sell them. But the people who are allowed to execute the trade are called brokers. They act as intermediaries between the buyers and the sellers.

Most stock markets in the world have a T+2 settlement period. This means that someone purchasing shares will actually get possession of them two days after the trade is made. Stock markets are also used to trade other instruments apart from stocks i.e. Futures, options and derivatives.