ELI5: How stock market work?

Imagine you and your friends want to open a lemonade stand, "Lemon Delight."

• Raising Money: You need money to buy lemons, sugar, and a cool pitcher. You can ask people to invest in your stand. These investors become part-owners.

• Shares: Instead of just taking cash, you give them pieces of paper called shares. Each share represents a tiny part of "Lemon Delight." If you have 100 shares, and someone owns 10, they own 10% of your stand.

• The Stock Market: The stock market is like a big marketplace where people can buy and sell these "Lemon Delight" shares. It's like a big yard sale for company ownership.

• Buying and Selling: If "Lemon Delight" is super popular and everyone loves your lemonade, more people will want to buy your shares. This makes the price of each share go up. If people think your lemonade is gross, they'll sell their shares, and the price goes down.

• Why Buy Shares? People buy shares hoping the price will go up so they can sell them later for more money. Like buying a toy car for $5 and hoping to sell it for $10 later.

• Companies and Stock: Big companies, like the ones that make your toys or games, can also sell shares of their company in the stock market to raise money to grow bigger.

• Risk: Sometimes, even if you think your lemonade is amazing, a new ice cream shop might open next door, and fewer people buy your lemonade. The share price can go down, and people can lose money. It's a bit of a gamble!