What is the stock market?

The Stock Market is an umbrella term to describe the general place where you can go to buy and sell investments. You can think of the Stock Market like Amazon the company (“I got my new roller blades from Amazon). Within the Stock Market, there’s something called Stock Exchanges, which is where you actually go to buy and sell investments. You can think of the Stock Exchanges as the various Amazon websites that people can go to make the purchase, like Amazon.com (American platform) or Amazon.ca (Canadian platform). Some companies sell their stocks on multiple Exchanges, while others are exclusive to just 1 Exchange. There are 60 major Stock Exchanges across the globe

Another way to think of the Stock Market is like a global Farmer’s Market, with the Stock Exchanges being individual stalls selling different things. 

And just like Amazon, a company will decide where they want to list their stock for sales. Most Canadian companies will list their stocks for sale on the Canadian Stock Exchange, called the Toronto Stock Exchange (or TSX). The US has several Stock Exchanges, with the New York Stock Exchange being the largest Exchange in the world. They also have the NASDAQ, which is where a lot of technology companies will list their stocks for sale.

The Stocks Exchange will also act as a referee to make sure that investments are purchased properly (no funny business!) and each one has its own set of hours. For example, the Toronto Stock Exchange is only open on weekdays between 9:30am-4:00pm EST. 

And just like Amazon, the currency used to purchase stocks depends on which Exchange you’re purchasing it from. If you use Canadian money to purchase a stock listed on the Toronto Stock Exchange, you’ll be able to pay with Canadian dollars. But if a Canadian wants to buy a stock on the New York Stock Exchange, they’ll either have to pay with US dollars or they’ll be charged currency conversion fees. 

Another thing to note is that you can’t just walk into the New York Stock Exchange office and ask to purchase some stocks. You also can’t directly access the Exchanges online. Instead, you’ll have to purchase your investments through a broker. This broker could be an online platform (like Welathsimple or Questrade), or it could be a company who invests on your behalf, like a bank or an investment firm.