What are stocks ?

Brief Explanation of stocks:

If you are new to trading, you might be wondering what stocks are. Stocks are essentially a share of a company which you can purchase on the Stock Market. Outstanding shares also known as Capitol Stock are the total number of shares (stock) the company consists of. This includes restricted shares proprietary to company executives, public stock and stock owned by institutions. After a company's IPO, the price of a stock is determined by the market and the long term price is set based on how profitable investors see the company. Stocks exist for various reasons. One being that a company executive cannot "cash out" if he or she does not sell their stock. This is because their assets are in the form of equity in their company but not in real cash. Additionally, since stocks change value, being a smart investor able to read the market can help many struggling financially to gain financial independence.

Brief History behind stocks:

As you might have learned in school, buying equity in companies dated back to joint-stock companies in the 1600s. Equity in these companies was sold so merchants could fund the ships' ventures in the first place. However, the stock market broadly known as The New York Stock Exchange (NYSE) was founded on March 8th, 1817. As we learned in APush, the Securities and Exchange Commission (SEC) was formed in 1934 by FDR as a way to regulate the Stock Market.

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