The stock market is a public exchange or place where stocks and bonds are traded. Wall Street is another term for the stock market. When stocks and bonds are bought and sold, that is known as trading. Prices on the stock market rise and fall each business day, so the price of stocks change regularly. Investors and stock traders make money when they buy equities at a low price, hold onto them for a certain amount of time, and then sell them when the value of the stock increases. This is how people investing in the stock market and Wall Street make money.

How Investors Use the Stock Market

When investors buy a stock, they are purchasing a share of that company. Most investors purchase shares in large quantities, especially when the stock price is low. This means they feel that the company's stock price is lower than the actual value of it. The investor purchases shares of their desired company at the current stock price and then sells the stock when they feel the price has increased sufficiently. Equities can both increase and decrease due to market forces, so there is a degree of risk when dealing with the stock market.

Wall Street and the Stock Market

Wall Street is another name for the stock market in the United States. In other markets around the world, they are known by the most prominent street of the financial district. At the stock market, institutional traders and stock brokers are responsible for buying and selling stocks for investors. Most of the buying and selling of stock happens electronically now, with many investors and traders doing it online.

Any investor that is considering playing the stock market must be aware of the risk they are taking. They should educate themselves through research and do their due diligence in the companies they plan to invest in. It is almost always wise to diversify investments on Wall Street so that that risk is spread out over the performance of many stocks or mutual funds. If you aren't sure how you should be investing, an advisor can help you make these kinds of decisions.