A stock is a financial security that represents partial ownership of a company. The value of a stock rises and falls depending on the company’s performance and the overall economy. Stocks have historically provided investors with high returns. However, they also carry risk, so they should always be viewed as long-term investments.

Companies sell stocks to raise capital, which they then use to expand their businesses and create jobs. Investors buy shares in the hope that they will grow in value over time, so they can sell them for a profit. Stocks are a major part of most people’s portfolios, and their price movements could be covered in the news.

When a company sells its shares, it becomes a publicly-traded company, or a public company. Public companies can then be bought and sold through brokerages and investment apps, and their share prices could be tracked on a market like the New York Stock Exchange or Nasdaq. The more people who want to buy a particular company’s shares, the higher the stock’s price. The opposite is true when there are more people selling shares.

The value of a stock can also be influenced by factors outside the company itself, such as general economic trends and investor sentiment. For example, when consumers are spending more money, it can boost the value of a consumer product company’s stocks. But, when the economy slows, it may drag down the value of all stocks, even those of companies with strong fundamentals.

One of the main differences between owning a company and owning its shares is that when you own stock, you don’t have any day-to-day decision-making control over a business. The management team and employees at a public company are there to work on behalf of the shareholders, to build value. If you owned a business on your own or with partners, you would be much more involved in the daily decision making process.

Another difference is that owning a company’s shares doesn’t guarantee you a parking spot in the lot or a desk at the corporate headquarters. If you own a company’s stock, your only claim to the company’s assets and earnings is your proportional stake in those claims. And while you might get a dividend from your company, that’s only if you own the stock before the ex-dividend date.

To make trading and investing easier, all stocks are listed on a market, or a series of markets. The information that is available to you is the quote, or the bid and offer price for a share. When a stock’s bid and offer are close together, it is said to have good liquidity. If the stock’s bid and offer spread is wide, it’s less liquid. Some markets rely on professionals to maintain a continuous supply of bids and offers at sequentially higher and lower prices, so motivated buyers and sellers can find each other. These traders are called specialists or market makers.