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Blue Chip Kids: What Every Child (and Parent) Should Know About Money, Investing, and the Stock Market by David W. Bianchi

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CHAPTER 3 THE STOCK MARKET IS COOL

There are many stock markets in the world, and they all operate in a similar manner. As you read this, people are buying and selling stocks and money is being made and lost right now.

Stock Markets and Stock Exchanges: What Is the Difference?

A stock market and a stock exchange are the same thing. The terms are used interchangeably.

What Is a Stock Market?

A stock market is a place set up for the orderly buying and selling of stocks. That's it.

Think about it. If you owned 100 shares of Apple and there was no stock market, where would you go to sell your stock? You would have to start calling people to see if they wanted to buy your shares. That is not a very efficient way to make the sale. And, making matters worse, your potential buyer would not know what to pay you for the stock because he would not know what other people have been paying for it. It would be a mess.

The need for an orderly way to buy and sell stocks was apparent from America's earliest days.

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On May 17, 1792, a group of 24 stockbrokers gathered under a Buttonwood tree on Wall Street in New York City and signed the Buttonwood Agreement establishing what would later become the New York Stock Exchange (NYSE). That was the birth of what is now America's oldest and most famous stock market.

Wall Street and the Stock Market

There really is a street in New York City called ...

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