Stocks are not as hard to understand as you think. Once you understand stocks, you will understand how the stock market works. First, you need to know a little about corporations. When a company wants to issue stock, they must first become public. This allows them to sell stock and become listed on a stock exchange.
When a company needs money to run their business or grow their business, they may issue stock to help them raise money. This is called equity.
They may decide to issue 100,000 shares of stock for $5 a share. If they sell all the shares, they will have raised $500,000.
Whoever buys these shares of stock become shareholders. Shareholders are part owners in the company and have voting rights in the company. For example, even if you own only one share, you are considered an owner of the company.
Once stocks have been issued and sold, they can continue to be bought and sold. You could buy stock for $10 and sell it later on for $15 and you would make a profit. This is how you make money with stocks.
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