How does the stock market work? What are stocks? What are options?

Stocks are a type of security that represent ownership in a company and allow shareholders to receive a share of its profits.

When stocks are purchased and sold on the stock market, their price is determined by the forces of supply and demand.

When investors believe a company's stock will increase in value, they buy the stock. When they believe the stock will decrease in value, they sell the stock.

Options are contracts that give the holder the right, but not the obligation, to buy or sell a stock at a certain price within a certain time frame.

Call options give the holder the right to buy a stock at a certain price. Put options give the holder the right to sell a stock at a certain price.

Options can be used to hedge risk and provide investors with the ability to speculate on the price of a stock without actually owning the stock itself.

The stock market is a market where investors can buy and sell stocks and other securities. It is made up of exchanges and over-the-counter markets.

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