In general terms, the stock market is where investors buy and sell shares of stocks. There are two types of markets: the primary capital market and the secondary capital market.

In the primary capital market, investors buy shares of stock from companies that issue the shares to raise money, most commonly through initial public offerings (IPOs). These offerings are handled by underwriters like Wall Street investment banks. In the secondary capital market, traders buy and sell shares among themselves, over the counter or through a stock exchange. Most stock market activity occurs in the secondary market.

When most people talk about the stock market, they are usually referring to one of the many exchanges that exist around the world. There are 16 stock exchanges with $1 trillion or more in market capitalization. The two largest and most well known are both in New York—the New York Stock Exchange and the Nasdaq. The New York Stock Exchange is the world’s largest exchange with more than $19 trillion in market capitalization. It is larger than the 50 smallest exchanges in the world combined. Other major exchanges include the London Stock Exchange, the Tokyo Stock Exchange and the Shanghai Stock Exchange.

In the past, most stock trading was conducted at physical exchanges, but today most stock traders work online. The Nasdaq, for instance, is an all-electronic exchange, so there’s no actual trading done in the Times Square location, though the building does make for a nice television backdrop.

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