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Topic

Stock Market Basics

Start here if you have never owned a share. Learn what a stock is, where it trades and what actually happens when you buy one.

  • 5 explainers
  • 3 glossary terms
  • 37 min of reading
The columned facade of the New York Stock Exchange building on Wall Street, hung with American flags
Photo: "New York Stock Exchange Building on Wall Street in Manhattan, New York City" by travelmag.com, CC BY 2.0 (edited: cropped, resized, colour-graded).

The stock market has its own vocabulary and its own plumbing. This topic takes it apart in the order a beginner meets it. A stock is a share of ownership in a corporation [1], it trades through brokers and exchanges, and strong demand from many buyers tends to push its price up [2]. None of that comes with a guarantee: you can lose money you invest in stocks [3].

Start with what is a stock, which explains what one share gives you, from voting and dividends to your place in line if a company fails. Then read how stock exchanges work for the NYSE, Nasdaq, regular hours of 9:30 a.m. to 4:00 p.m. Eastern Time and the 2026 holiday calendar [4].

When you are ready to act, how to buy your first stock walks through checking a broker, opening an account, choosing whole or fractional shares and what happens after you click buy. Market orders vs limit orders explains the choice that decides the price you pay, and what moves stock prices covers why prices rise and fall.

Short definitions live in the glossary: common stock, preferred stock and IPO. Once you can buy a share, the next topic is reading a stock page.

Every explainer uses invented example companies calculated in code, never live prices, ratings or tips, and links each rule and number to a primary source such as the SEC, FINRA or an exchange.

Explainers in this topic

Stock Market Basics8 min read

What moves stock prices up and down?

Supply and demand, company news, interest rates, economic data and surprises versus expectations: the main forces behind stock price moves, with Federal Reserve research and a worked example.

Terms used in this topic

  • Common stock

    Common stock is an ownership share in a company, usually with voting rights and no promised dividend. What it gives you and where it ranks if a company fails.

  • Preferred stock

    Preferred stock is equity with priority over common stock for dividends and in liquidation, usually with a fixed dividend and few or no votes. How it works.

  • IPO (initial public offering)

    An IPO is when a company first sells its shares to the public. How the SEC registration works, who gets shares at the offering price, and the risks.

Questions people ask about this topic

What should a complete beginner learn first?

What a share actually is and what rights it gives you. Read what is a stock first, then how stock exchanges work.

Do I need a lot of money to start?

No fixed minimum appears in the sources we cite. Some brokerage firms offer fractional shares, which let you own less than one full share, though the terms differ from firm to firm [5].

Is investing in stocks safe?

No investment in stocks is free of risk. There is no guarantee a company will grow, and large company stocks as a group have lost money on average about one out of every three years [3].

Sources

  1. Stocks | New York Attorney General. Office of the New York State Attorney General.
  2. Stocks. FINRA.
  3. Stocks - FAQs. U.S. Securities and Exchange Commission (Investor.gov).
  4. US & Nordic Stock Market Schedule | Nasdaq. Nasdaq, 2026.
  5. Fractional Share Investing - Buying a Slice Instead of the Whole Share. U.S. Securities and Exchange Commission (Investor.gov), 2020.