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14 min read•Last updated: December 2024 by Quoc Doan

World's Largest Stock Market

The US stock market represents over 40% of global market capitalization, offering unparalleled liquidity, diversity, and investment opportunities across all sectors.

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Major US Exchanges

The world’s largest stock exchange by market capitalization, founded in 1792.
Key Features:
  • Market Cap: ~$25 trillion
  • Listed Companies: 2,400+
  • Trading Floor: Iconic physical trading floor in Wall Street
  • Typical Stocks: Large, established companies (blue chips)

Blue Chip Companies

  • Berkshire Hathaway (BRK.A/B)
  • Johnson & Johnson (JNJ)
  • Procter & Gamble (PG)
  • Coca-Cola (KO)

Banking Giants

  • JPMorgan Chase (JPM)
  • Bank of America (BAC)
  • Wells Fargo (WFC)
  • Goldman Sachs (GS)

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Market Hours & Sessions

Regular Trading Hours

9:30 AM - 4:00 PM ET (Monday - Friday)Key Times:
  • 9:30-10:30 AM: Opening volatility
  • 11:30 AM-2:00 PM: Midday lull
  • 3:00-4:00 PM: Closing hour activity

Extended Hours Trading

Pre-Market: 4:00-9:30 AM ET After-Hours: 4:00-8:00 PM ETCharacteristics:
  • Lower volume and liquidity
  • Higher volatility
  • Wider bid-ask spreads
US Stock Market Closed:
  • New Year’s Day: January 1
  • Martin Luther King Jr. Day: January 15
  • Presidents’ Day: February 19
  • Good Friday: March 29
  • Memorial Day: May 27
  • Juneteenth: June 19
  • Independence Day: July 4
  • Labor Day: September 2
  • Thanksgiving: November 28
  • Christmas Day: December 25
Early Close (1:00 PM ET):
  • Day after Thanksgiving: November 29
  • Christmas Eve: December 24

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Market Sectors & Industries

Largest Sector by Market Cap

Technology represents ~28% of S&P 500 market capitalization
Sub-sectors:
  • Software: Microsoft, Oracle, Salesforce
  • Hardware: Apple, Nvidia, Intel
  • Semiconductors: TSMC, Broadcom, Qualcomm
  • Internet: Google, Meta, Amazon
Key Metrics to Watch:
  • Revenue growth rates
  • R&D spending as % of revenue
  • User growth and engagement
  • Profit margins and scalability

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Market Indices

S&P 500

500 largest US companiesMarket-cap weighted index representing ~80% of total US stock market valueTicker: SPY (ETF)

Dow Jones

30 blue-chip companiesPrice-weighted index of large, established companiesTicker: DIA (ETF)

NASDAQ 100

100 largest non-financial NASDAQ stocksHeavy technology weightingTicker: QQQ (ETF)

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Trading Mechanics

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Settlement & Clearing

1

Trade Execution

Order executed on exchange at agreed price
2

Trade Date (T)

Day the transaction occurs
3

Settlement (T+2)

Cash and securities change hands 2 business days later
4

Good Faith Violation

Selling stock before paying for it can result in account restrictions

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Pattern Day Trading Rules

PDT Rule: Accounts under $25,000 are limited to 3 day trades in 5 business days.
Definition: Buying and selling the same security on the same dayRequirements for PDT accounts:
  • Maintain minimum $25,000 equity
  • Use margin account (not cash account)
  • 4:1 intraday buying power
Consequences of violations:
  • Account flagged as PDT
  • 90-day restriction on day trading
  • Must meet minimum equity requirement

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Tax Implications

Short-term (< 1 year):
  • Taxed as ordinary income
  • Rates: 10% to 37% (2024)
Long-term (≥ 1 year):
  • Preferential tax rates
  • 0%, 15%, or 20% based on income
// 2024 Long-term Capital Gains Rates
const capitalGainsRates = {
  single: {
    '0%': 'Up to $47,025',
    '15%': '$47,026 to $518,900',
    '20%': 'Over $518,900'
  },
  marriedJoint: {
    '0%': 'Up to $94,050',
    '15%': '$94,051 to $583,750',
    '20%': 'Over $583,750'
  }
};

Individual Stocks

Direct company ownershipPros: Full control, unlimited upside Cons: Higher risk, requires researchBest for: Active investors with time for analysis

ETFs

Diversified, low-cost fundsPros: Instant diversification, low fees Cons: Market returns only, no outperformancePopular: SPY, QQQ, VTI, SCHB

Mutual Funds

Professionally managed fundsPros: Professional management, research Cons: Higher fees, less flexibilityTypes: Index funds, active funds, target-date

Options

Derivatives for hedging/speculationPros: Leverage, hedging capabilities Cons: Complex, time decay, high riskRequires: Advanced knowledge and approval

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Getting Started Checklist

1

Choose a Broker

Popular Options:
  • Charles Schwab: Full-service, excellent research
  • Fidelity: Low costs, great customer service
  • Interactive Brokers: Advanced tools, global access
  • TD Ameritrade: Comprehensive platform (now Schwab)
  • E*TRADE: User-friendly, good for beginners
2

Account Types

Taxable Account: Full flexibility, immediate access IRA: Tax advantages, retirement focus 401(k): Employer match, higher limits Roth IRA: Tax-free growth, flexible withdrawals
3

Start Small

  • Begin with broad market ETFs (SPY, VTI)
  • Gradually add individual stocks
  • Never invest more than you can afford to lose
  • Consider dollar-cost averaging strategy
4

Continue Learning

  • Follow earnings reports and company news
  • Read annual reports (10-K) and quarterly reports (10-Q)
  • Track your investments and learn from results
For Beginners: Start with low-cost index funds (VTI, VXUS) to get market exposure while you learn individual stock analysis.

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Resources for US Market Analysis

SEC Edgar Database

Official company filings and financial statements

Yahoo Finance

Free stock quotes, charts, and basic analysis

Morningstar

In-depth stock research and analysis

Seeking Alpha

Investment research and analysis articles

Finviz

Stock screener and market heat maps

TradingView

Advanced charting and technical analysis

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Next Steps

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