Lesson 01 · Basics
A plain-English intro to what stocks are, how they trade, and why prices move — the foundation every trader needs.
Before you scan for movers or read a single chart, it helps to know what you’re actually buying and selling. This lesson keeps it simple.
What is a stock?
A stock (also called a share) is a small piece of ownership in a company. Buy one share of a company and you own a tiny slice of it. If the business becomes more valuable, your slice tends to be worth more. If it struggles, your slice can lose value.
Companies sell shares to raise money — to hire, build, or expand. In return, buyers get a stake and the chance to profit if the company does well.
So what is “the stock market”?
The stock market is simply the network of places where those shares are bought and sold. It isn’t one building — it’s a system of exchanges (like the NYSE and the Nasdaq) connected electronically, where millions of buyers and sellers meet every second.
When you place an order through a broker, it routes to an exchange, gets matched with someone taking the other side of the trade, and the shares change hands — usually in a fraction of a second.
Why do prices move?
A stock’s price is just the most recent point where a buyer and a seller agreed. It moves constantly because supply and demand shift:
- More buyers than sellers → price rises.
- More sellers than buyers → price falls.
What drives that demand? News, earnings, the overall economy, and plain human emotion — fear and greed. For small, fast-moving stocks especially, a single catalyst (like a press release) can send price flying in minutes.
Key idea: price isn’t the “true value” of a company — it’s a live vote on what people are willing to pay right now. Trading is the art of reading that vote before the crowd does.
Buyers, sellers, and the “bid” and “ask”
At any moment you’ll see two prices: the bid (the highest price a buyer will pay) and the ask (the lowest price a seller will accept). The tiny gap between them is the spread. Understanding this is your first step toward reading order flow — something we cover in later lessons.
Where you fit in
To participate, you need a broker — an account that connects you to the exchanges. Choosing the right one matters a lot, especially for active trading. When you’re ready, our broker comparison guide breaks down the best options for different styles and account sizes.
Next lesson →Trading Styles: Investing vs. Swing vs. Day Trading
