ELI5: stock market

// eli5

What is the stock market?

The stock market is like a giant marketplace where people buy and sell pieces of companies, just like trading cards [4]. When you own a piece of a company, it's called a stock, and you can sell it to someone else if you want your money back [1][2].

Why does the stock market exist?

Companies need money to grow and build new things, so they divide themselves into tiny pieces called shares and sell them to regular people [4]. This way, the company gets money and regular people can own a piece of the company and make money if it becomes more valuable [5].

What happens when you buy stock?

When you buy stock, you're betting that the company will do well and become worth more money [1]. If the company makes more money or becomes popular, your stock becomes more valuable, and you can sell it for more than you paid for it [4].

How do people trade stocks?

People buy and sell stocks through special websites and apps, kind of like an online store for company pieces [2]. The price of each stock goes up and down all day long based on whether lots of people want to buy it or sell it [1][4].