Learn what stocks are, how exchanges work, and the key forces that move prices every day.
A stock (also called a share or equity) represents a small ownership stake in a company. When Apple has 15 billion shares outstanding and you own 10, you own 10/15,000,000,000th of Apple — tiny, but real.
Companies issue stock to raise money. Instead of borrowing from a bank, a company can sell ownership stakes to thousands of investors. Those investors hope the company grows and their stake becomes worth more over time.
A stock exchange is the marketplace where buyers and sellers meet to trade shares. The two largest in the world are the New York Stock Exchange (NYSE) and NASDAQ. Every transaction — billions of them daily — is recorded and matched electronically in milliseconds.
NYSE and NASDAQ differ slightly: NYSE is older and uses a hybrid of human traders and electronic matching. NASDAQ is fully electronic and is home to most major tech companies (Apple, Microsoft, Google, Amazon, Meta are all NASDAQ-listed).
At the most fundamental level, prices are set by supply and demand. If more people want to buy a stock than sell it, the price rises. If more want to sell, it falls. But what drives those decisions?
A company beating or missing earnings expectations is the single biggest short-term price mover.
Investors pay premiums for companies growing revenue faster than expected.
Higher rates make bonds more attractive, pulling money away from stocks.
GDP growth, unemployment, and inflation all signal how strong corporate profits might be.
Product launches, lawsuits, CEO changes, and geopolitical events all cause price reactions.
When a major bank raises a price target, institutional investors often buy — pushing the price up.
Prices rising 20%+ from recent lows. Usually driven by strong economic growth, rising corporate earnings, and investor optimism. The average bull market lasts about 5.5 years.
Prices falling 20%+ from recent highs. Driven by economic slowdowns, rising rates, or crises. The average bear market lasts about 10 months — much shorter than bull markets.
The key insight most beginners miss: bear markets are temporary, bull markets are the default state. Since 1950, the S&P 500 has spent roughly 78% of its time in bull market conditions. Long-term investors who hold through bear markets have always been rewarded.
What does owning a stock actually give you?
Which of the two major US exchanges is fully electronic with no human floor traders?
Historically, how long does the average bear market last compared to the average bull market?
Now that you know what stocks are, explore real-time signals, price data, and AI scores for thousands of stocks — free, no account needed.