STOCKS AND EQUITY MARKETS

This section is about stocks and the people and organizations who use them. We begin, in Chapter Four, by discussing the various forms of stocks that exist and how issuers (who use stock to finance their business activities) and investment bankers (who help them) work together to create new shares of stock. In Chapter Five, we discuss the various settings in which stock is bought and sold, from the traditional “open outcry” markets, with their floor brokers representing customers and specialists making markets, to the latest digital exchanges that exist only in cyberspace, matching bids and offers of buyers and sellers who may never see each other or learn the other’s identity.

Discussion of the settings in which trading takes place leads naturally into Chapter Six, a discussion of the different styles of investing used by stock market participants. Investment styles, of course, are dependent on access to many sources of information, the focus of Chapter Seven.

Finally, having looked at what stock is, who trades it, where and when it is traded, and by which methods of analysis it is deemed a buy, a sell, or a hold, we come to Chapter Eight, which offers a framework for deciding how to put all this information to good use.