What is a stock? Stock market?

Question

So I know the basic background of a stock market. But, per-say, I buy a stock from google. Now I what can I do with that besides SELLING IT? What authority give it allow me?

I'm new to stock, so please be as specific as you can, I am starting to take interest.

If you can, try to explain the following questions:

1). What is the difference between like a stock broker, and someone who buys/sells stocks?

2). Who is elligible to "play" with stocks?

3). Who runs the market, who even thought of this idea?

4). Anything helpful to get my started (Websites, words of wisdom, etc).

Thanks!

Answer 1

Companies sell shares of themselves in order to raise money to run that company.  A share of stock makes you technically, not practically, part owner of that company.  The more shares you own the more that company belongs to you.  If there are 20,000,000 shares of stock and you own one - you cna't do much about anyhting except hopefully sellit for more than you bought it.  If you own 5,000,000 shares you have a lot to say about how that company operates.

Anyone can buy and sell stocks for themselves.  However, if you buy and sell stocks for others, then you have to get a certain class of license and be an official "stock broker."  Then you can buy and sell stocks for others and charge them a commission for doing so.

As for who runs the market - supposedly the poeple who buy and sell stocks do.  There are many markets but in the USA the main two are NASDAQ and the NYSE (New York Stock Exchange)  NASDAQ is all on computers.  the NYSE is an actual place in New York with real stock brokers running around buying and selling stocks from each other based on orders their clients (That's would be you and everybody else) place.  Stock brokers take a commission on each sale.  There are discount brokerages - the online brokers are waaaay cheaper but you have to do the research.

A sto who controls the markets - that's a good question and one yo need to know something about before entering into the market on your own.  Maybe you read somewhere about a company coming out with a hot new product so you buy 100 shares (known as a block) hoping to sell it back at a profit.   The price is going up because everybody has heard the same story and wants in on it.  YO finally get your order filled at say ---$27 a share.  So you've spent $2700 for the stock plus the broker's fee. If online that could be $10 to $50.  If a real broker does it for you it could be anywhere from $50 to $500.  The stock continues up a point, two points to $29 and you read a research report saying they expect this stock to go to $45 - $50 within a year.  Wow!   The stock dips a little but the anylists say, not to worry, it's just a blip due to it's meteoric rise. It will continue on th eupward trail soon enough and it does a little, then it goes back down and you look one day and its at $25 and you see that people are lining up to sell it.  So you panic and sell and by the time your order gets filled you've sold it for $21 for a lost of $6 a share or $600 plus commissions.  What happened?  Many times these so-called "analysts" are just shills for the ocmpany or a brokerage firm wanting to buy or dump stock.  That's just one of the tricks the big boys play and they do play them - regularly because while yol're dealing with 100 or 1,000 shares they're dealing with 500,000 to 2,000,000 or more shares.  If they were to sell off all their shares at once the market for their stock would drop like a falling piano.  So they get an analyst to say great things so the stock goes up and they can sell lots of shares into that raise.  The reverse also holds true.  A brokeage firm wil get an analyst  to down grade a stock so people sell it off and their client can buy up large blocks.  they the analysts wil turn around and say great things and the stock goes up and their client sell soff at a profit.  

Make no mistake, the market is manipulated by the "big boys"   If you're a trader, you have to be aware of these things and know how to deal with them.  A safer way is to buy knto a reputable Mutual FUnd.  They are some of the bigger boys on the block.  They buy millions of shares for you and many others.  It's their business and they know what's up - if they're good.

I suggest buying a few books on the subject and look - twice or three times - before you leap.  Good luck!

Answer 2

simple answer are :

1. stock broker is a company who have a permission from stock exchange to buy or sell stock (like a bank selling mutual funds),

while a person (individual investor) or a trader is the one who will buy and sell (investing) a specific stock from stock broker.

2. the law is different for each country and market, the basic is anyone above 18 years old can buy the stock

3. anyone who trade the stock can "run" the market, the basic idea of buying the stock is buying the company. the more money you have the more power you have to move the market (and that's why  large cap stock usually less volatile than low cap stock, because the volume of the large cap is to big for any individual trader)

4. for any stock idea you can start with moneycentral, yahoo finance, canslim, even from tv like bloomberg.

for starter, trade small or just do paper trading first and test your skill. watch 1-5 stock first, monitor the stock day-by-day.

always use stop loss

sorry for my bad english...