Bite-sized beginner lessons on what stocks are, tickers, bid and ask, market cap, dividends, P/E, bull vs bear markets, order types, and ETFs.
A stock (or 'share') is a tiny slice of ownership in a public company. If a company is split into 1,000,000 shares and you own 1, you own one-millionth of it. Stock prices move every second as buyers and sellers agree on a new price.
Every public stock has a short symbol called a ticker — AAPL for Apple, TSLA for Tesla, MSFT for Microsoft. Stocks trade on exchanges like NYSE and NASDAQ during market hours (9:30am–4:00pm ET on weekdays).
The bid is the highest price a buyer will pay right now. The ask is the lowest price a seller will accept. The gap between them is the spread. Tight spreads = lots of liquidity; wide spreads = harder to trade efficiently.
Market capitalization = share price × total shares outstanding. It tells you the company's size: small-cap (< $2B), mid-cap ($2B–$10B), large-cap (> $10B), mega-cap (> $200B). Bigger usually = less volatile.
Some companies share their profits with shareholders as cash payments called dividends, usually quarterly. Not all stocks pay dividends — many growth companies reinvest profits instead. Dividend yield = annual dividend ÷ share price.
Price-to-earnings ratio = share price ÷ earnings per share. A P/E of 20 means investors pay $20 today for every $1 of yearly profit. Higher P/E often means investors expect strong future growth — but it can also signal overvaluation.
A bull market is a sustained period of rising prices (think bull horns charging up). A bear market is a 20%+ drop from recent highs (a bear swiping its paws down). Corrections are 10–20% drops — uncomfortable but normal.
A market order fills immediately at the best available price — fast but unpredictable. A limit order only fills at your chosen price or better — slower but you control the price. Beginners often use limits to avoid surprises.
Don't put all your eggs in one basket. Spreading money across many stocks, sectors, and asset types reduces risk — if one company crashes, the others can cushion the blow. ETFs are an easy way to instantly diversify.
An ETF (Exchange-Traded Fund) is a basket of stocks you can buy as a single ticker. SPY tracks the S&P 500 — one purchase gives you a slice of 500 companies. ETFs are popular for low-cost, instant diversification.
More lessons: Reading the market · Technical indicators · Chart patterns · Building a portfolio · Advanced strategies · all of Learn