What Is a Stock?
A stock is a small piece of ownership in a company. If you own one share of a company, you own a tiny slice of its business, its profit and its future.
A stock in simple terms
Imagine a pizza shop worth $100,000 split into 100,000 equal pieces. Each piece is worth $1. Buy one piece and you own 1/100,000 of the shop.
Big companies do the same thing, just with billions of pieces. Those pieces are called shares, and people buy and sell them on a stock exchange.
Stock vs share: what is the difference?
In daily talk they mean almost the same thing. "Stock" is the general idea of owning companies. A "share" is one single unit. You might say "I own stock in Apple" and "I own 10 shares of Apple".
How do stocks make you money?
- The price goes up. If the company grows its profit, people will usually pay more for each share. You sell for more than you paid.
- Dividends. Some companies send part of their profit to owners as cash. This is called a dividend.
Why do stock prices change?
A share price is what buyers and sellers agree on right now. It moves when people change their minds about the company's future. Good news about sales or profit usually pushes the price up. Bad news pushes it down.
Over a day, prices can jump around for no deep reason. Over many years, the price tends to follow how much money the business makes.
Is $10 enough to start?
Yes, with many brokers. Some let you buy a part of one share, called a fractional share. Small amounts are a fine way to learn. Many beginners start with an index fund so their money is spread across many companies.
See it in real companies
Open a company to see what it sells and how it makes money.