What is a Stock?

A stock represents a share in the ownership of a company. When you buy a stock, you are buying a small piece of that company. As the company grows and becomes more valuable, the value of your piece (your stock) also grows.

Companies issue stocks to raise money to fund their business. They sell these shares to the public through a process called an Initial Public Offering (IPO). Once the shares are public, people can buy and sell them on the stock market.

The stock market is simply a marketplace, just like a farmers' market, but instead of buying apples or oranges, people are buying and selling shares of companies like Apple or Microsoft. The price of a stock is determined by supply and demand: if more people want to buy a stock than sell it, the price goes up. If more people want to sell than buy, the price goes down.