The stock market is where you buy and sell shares, or small pieces of ownership in publicly traded companies. There are dozens of exchanges around the world where stocks can be traded. The market moves up or down based on many factors, including economic growth, interest rates and inflation. You can trade stocks through online brokerages or investment apps on your phone or computer.
Once you find a company you want to invest in, follow the prompts through your account to place a buy order (or sell order). You might use a simple market order or maybe specify a price you’d be willing to pay with a limit order. Your order will then be executed if other investors are willing to buy or sell at that price.
Before a share can be sold, two parties must agree on a price, and there are rules about how to communicate with each other. For example, some exchanges don’t allow short selling or margin buying, where you borrow money to buy a share and hope that the stock price will rise.
Once a trade is agreed upon, there’s usually a period of time (often three business days) before the transaction is “settled.” At that point, you, as the buyer, officially own the stock. Then, if you decide to sell it later, you can do so through your investment platform again by following the prompts. Your platform may also offer extended trading hours, processing transactions for several hours before and after the regular market day.