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Stock represents ownership in a company. Each unit of a stock is called a share. If you own 50% of YouTube’s stock, you own half of YouTube. A shareholder is someone who owns a stock.
A stock exchange is a place where investors can buy or sell stocks. A public company is a company whose ownership is organized via shares of stock that are intended to be freely traded on a stock exchange.
In a bull market, prices are rising. In a bear market, prices are falling. They are named after each animal’s attack style. Volatility is how fast the stock price moves up and down. Volume is the number of shares of a company traded each day.
Capital is a broad term that can describe anything that gives value to its owners. It usually refers to money, but it can also describe machinery, patents, etc. Liquidity is how easily you can get into and out of a stock. It increases with volume.
Bubbles occur when prices for a particular item rise far above the item’s real value due to too much optimism. Sooner or later, the high prices become unsustainable and they fall dramatically until the item is valued at or even below its true worth.
An IPO (initial public offering) happens when a private company becomes publicly traded in order to raise money. Dividends…
