"How Stock Market Works" is an informative chapter that provides readers with a comprehensive understanding of the functioning and mechanisms of the stock market. The chapter begins by introducing readers to the basics of the stock market. It explains what stocks are and how they represent ownership in a company. Readers will gain insights into the primary and secondary markets, stock exchanges, and the significance of stock trading in the economy.

This chapter explores the role of stock exchanges in facilitating stock trading. It discusses major stock exchanges, such as the New York Stock Exchange (NYSE) and the NASDAQ, and their functions in providing a platform for buyers and sellers to trade stocks. Readers will understand the role of stockbrokers and how orders are executed on the exchange.

The chapter also explores the various participants in the stock market. It discusses individual investors, institutional investors, traders, and market makers. Readers will gain insights into the roles and motivations of different market participants and how their activities influence stock prices.

By the end of this chapter, readers will have gained a comprehensive understanding of how the stock market works. They will be equipped with knowledge about the basics of the stock market, the role of stock exchanges, trading mechanisms, stock market participants, and the factors that influence stock prices. Whether readers are new to investing or seeking to enhance their understanding of the stock market, this chapter provides valuable insights to navigate the complexities of the stock market effectively.