What Even Are Stocks?

You've probably heard of the term before (and seen the meme before), but do you really know what stocks even are?

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We Answered Popular Questions About Stocks, So You Don't Have To.

What are stocks?

In short, stocks are an investment. When someone buys a company's stock, they purchase what's called a share in the company. In other words, they essentially purchase a small portion of the company. When you obtain a share of a company, you're known as a shareholder, and you share in the company's profits.

Where do I buy a stock?

If you want to purchase a stock of a public company, the best way to do so is through the stock market, which is a network of trading. Some of the most popular stock market exchanges include the New York Stock Exchange and Nasdaq. But these places aren't like supermarkets, you can't buy trade stocks yourself. Instead, a stockbroker represents individuals hoping to buy and sell stocks, so you don't have to deal with it all yourself!

Why should I care about the stock market?

If you're cautious, determined, and just a little bit lucky, you can actually make money out of buying and selling stocks on the stock market. This profit is most commonly obtained through stock trading. Buyers offer a bid, which is the highest amount they’re willing to pay. This amount is usually lower than the amount sellers ask for in exchange. This difference is called the bid-ask spread. For a trade to occur, a buyer needs to increase his price or a seller needs to decrease hers. These trades, if done correctly, can provide the seller with a significant profit.

These are just a small portion of questions about the stock market, and I hope they give you a general idea of what goes on in the world of stocks and investment. In reality, buying and trading stocks is a delicate practice, and requires a lot of research, calculations, and risk. Stay tuned for more in-depth answers about the stock market and how it works!

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