How Does a ‘Stock Market’ Actually Work?

Like I'm 5

Imagine a lemonade stand. If you own it, and someone wants to buy part of it, they give you money, that’s like buying stock in a company.

The stock market is like a big lemonade stand fair, where people can trade pieces of many different companies all at once. Some people get rich because their shares go up, others lose money when the shares go down, it's like playing a game with real money!

Take the quiz →

Examples

If you buy a share in a toy company, and it starts making more toys than ever before, your share might become worth twice as much.
Imagine buying part of a pizza shop, if it becomes famous, other people want to buy that piece too, and its price goes up.
Your mom buys stock in a company, and when you get older, she sells it for a lot more money than she paid.

Ask a question

Discussion

Recent activity

Categories: Economics · stock market,investing,finance