how does the stock market work 
the stock market is a vast complex network of trading activities where shares of companies are bought and sold protected by laws against fraud and other unfair trading practices it plays a crucial role in modern economies by enabling money to move between investors and companies sometimes the best way to see how something works is to look at its parts in that light let s review the major elements of the stock market from the companies selling shares to stocks to exchanges to the indexes that give us a snapshot of the stock market s health not all companies can offer stock to the public only public companies that have offered their shares for the first time in an initial public offering ipo can have their stock bought and sold on exchanges like the nyse or nasdaq from when a company starts planning its ipo through all the time its shares are sold to the public it must meet stringent regulations and financial disclosure laws the primary market could involve raising money and giving parts of a business to friends family and others in direct trades making it the oldest way of dividing shares in a company since the primary market is where a company sells its securities directly today it includes ipos follow on public offerings private placements debt offerings and other times when a company sells part of itself to raise funds from then on stocks are traded in the secondary market on exchanges or over the counter more than 58 000 companies worldwide are publicly traded today 3