The Stock Market


The New York Stock Exchange is one of the biggest stock exchanges in the world. The stock exchange is a place where fortunes can be made and lost overnight. The New York Stock Exchange is located downtown in the Wall Street area of New York City. This is where people called stockbrokers work. To give you an example of how the stock market works, let’s imagine for the sake of the discussion that you have a bunch of money, and you want to invest it. If you want to make a profit, the place to do it is at the stock market. Here you can buy shares, for a fixed price, which entitles you to be the part owner of a company where you hold very small percentage of the whole value of the company.

Companies go public because they need money to expand their operations and grow. If your company’s performance is good, the value of your shares goes up a certain proportion and you make money. If you bought shares at $29.00 each, and now their value is $56 bucks per share, it is up to you to sell your shares or to wait for the company to perform better. If you don’t sell your shares at the right time, you can lose all your money in a snap of your fingers. When the market crashes, the value of the shares plummets. The stock market attracts many people, because it is very similar to going to a casino.

There is some terminology that is used in stock market jargon. For example, when the market is dynamic and people buy and exchange shares, they say we have a bull market. When the market is slow and the transactions are at minimum, they say we have a bear market. In the New York Stock Exchange, the principal way of measuring stock market performance is with the Dow Jones Industrial average index. The index for high tech companies is the NASDAQ composite.

Vocabulary and Expressions

Overnight = from one day to the other
Downtown = the commercial area of a big city and or town.
Stockbrokers = people who work in the stock market trading stock.
For the sake of = statement meaning for the benefit of
Bunch of = a considerable quantity of something.
Shares = papers that represent a piece of the value of the company.
Whole = complete; entire.
Go public = become public.
It’s up to you = statement meaning “is your choice.”
A snap of your fingers = sound produced when you press your middle finger and your thumb together; quickly.
Jargon = vocabulary or specific terminology used for a certain subject.
To crash = to collapse.
To plummet = to decrease sharply.
Bull market = dynamic or positive market.
Bear market = slow or negative market.

Conversation Activities

1. Would you like to make money overnight?
2. Do you think that the life of a stockbroker is easy or very stressful?
3. Do people like to go out to eat often where you are from?
4. What would you do if you had a lot of stock and the market crashed?
5. Would you like to be a stockbroker?
6. Do you think that stockbrokers have a special ability for business?