The stock market is a really interesting system. A company, if approved by the SEC can go public, onto the market. Once you buy a share of a company, you are buying a piece of it. When the company does well, and grows, the value of those shares increase, so each share is worth a lot more! In that way, you are making more money. Then you can simply sell those shares. Those shares then can be bought and traded to another person. When you sell the shares, you make the money that the company grew by. Let's say... that a company's market value is $100 per share. If you buy 100 of those shares, then that costs $10,000. Maybe in a few months, the company's share value increases by 5 dollars, making the share value, $105 per share. So now, 105 x 100= $10,500. YOU JUST MADE $500! So, you can sell those shares to another person indirectly and get your $10,500. However, there is high risk, what if the company drops down to $95, then 95 x 100= $9,500. You just lost $500! See, the stock market has the common, "High risk, high reward" system.
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