How do stock tradings work?
In:
In order to get investments into a company so a company have money to grow it is common to split up ownership into many equally sized shares. This makes it easier to sell parts of the company to smaller investors instead of relying on big investors to buy the company. Whenever the company makes more profits then they can use to grow they will pay this out to all the owners as dividends. So owning a share in a company will mean you get some of the income when they do well. But a problem with all the shares floating around is that it can be hard for buyers and sellers to find each other, nobody knows what others are offering for the shares and it is hard to track who actually owns the company. The solution is to publish the company on a stock market. This is basically a big room with designated places for different stocks where buyers and sellers can meet and negotiate trades. The stock market will have people recording the offers to sell or buy and the completed trades. These are both posted on boards for other traders to see and entered into a ledges so they can know who owns what shares and when the stock market closes they will handle the payments. This all makes the process very transparent.
Ownership of a company is split up into lots of little pieces. You can buy the pieces to own 0.00001% of the company. You can sell them to someone else if you decide you don’t want your percentage any more.
The price changes a lot, so people also try to make money by “flipping” stocks (buying when they are cheap, selling when they are expensive).
The prices of sticks go up and down. The goal is to buy them at low price and sell at a high.
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