Stocks are pieces of a company that investors, called shareholders, buy that represent ownership on a small percentage of the corporation's earnings and assets. The percentage that a shareholder owns of a company is proportional to the amount of stocks they've bought and the total amount of stocks a corporation owns. Stocks are purchased and sold at stock markets all around the world. A stock market is where investors can buy, sell, and trade stocks. The largest in the world is the New York Stock Exchange and it is worth 20,161 billion U.S. dollars when all the stock values are combined. The largest stock market outside of the United States is the Tokyo Stock Exchange, located in Tokyo, Japan, it is worth nearly 4,000 billion U.S. dollars.
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These employee investors can make money through stock options by purchasing stocks from the corporation and selling them for a higher price than what they paid for them. Since stock options are generally short term investments in a new or smaller company, it becomes more likely that an investor could lose a large sum or all of the money he or she invested into the stock. Stock options are commonly practiced by small companies just starting up. In these situations with a new company it becomes very likely that an investor would lose most if not all of his money if the company was not able to succeed as …show more content…
The stock market index is calculated by taking a section of stocks and averaging the prices of them. The Dow Jones Industrial Average (DJIA) is one of the most frequently used and oldest indexes on the stock market. The DJIA is comprised of 30 of the largest corporations' stocks in the United States. It shows about 30% of the value of the entire stock market at any given time. A larger but less used stock index is the Standard & Poor's 500 (S&P). It represents around 70% of the stock market. Different stock indexes tend to move together with the economy. For example, as an economy becomes stronger, indexes will move up with it. Or if an economy starts to decline, stock index values will also plummet. Overall, following stock indexes can give you a greater understanding of the current state of the
These employee investors can make money through stock options by purchasing stocks from the corporation and selling them for a higher price than what they paid for them. Since stock options are generally short term investments in a new or smaller company, it becomes more likely that an investor could lose a large sum or all of the money he or she invested into the stock. Stock options are commonly practiced by small companies just starting up. In these situations with a new company it becomes very likely that an investor would lose most if not all of his money if the company was not able to succeed as …show more content…
The stock market index is calculated by taking a section of stocks and averaging the prices of them. The Dow Jones Industrial Average (DJIA) is one of the most frequently used and oldest indexes on the stock market. The DJIA is comprised of 30 of the largest corporations' stocks in the United States. It shows about 30% of the value of the entire stock market at any given time. A larger but less used stock index is the Standard & Poor's 500 (S&P). It represents around 70% of the stock market. Different stock indexes tend to move together with the economy. For example, as an economy becomes stronger, indexes will move up with it. Or if an economy starts to decline, stock index values will also plummet. Overall, following stock indexes can give you a greater understanding of the current state of the