How does the stock market work ?

The stock market is a platform where investors buy and sell shares of publicly traded companies. Here's a simple description of how it runs:

1. Companies Raise Money
Companies issue shares (pieces of ownership) to the public through a process called an Initial Public Offering (IPO).

Investors buy these shares, giving companies money to grow their business.

2. Buying and Selling Shares
Once shares are public, they are traded on stock exchanges (like the NYSE or NASDAQ).

Investors can buy or sell these shares through stockbrokers or trading apps.

The price of a stock goes up or down based on supply and demand — influenced by company performance, news, economic trends, and investor sentiment.

3. Making Money
Investors earn in two main ways:

Capital gains: Selling shares at a higher price than they bought them.

Dividends: Some companies pay part of their profit to shareholders regularly.

4. Stock Market Indices
Groups of stocks (like the S&P 500 or Dow Jones) help track overall market performance.

5. Regulation and Safety
Government bodies like the SEC (U.S.) regulate the market to prevent fraud and protect investors.

In Simple Terms:
The stock market is like a big online marketplace where people buy and sell pieces of companies. Prices change based on how well companies are doing and what people think will happen in the future.