A stock is essentially a piece of a company. You are a shareholder when you own a stock. The shareholder will share in the companies profits and has a voice about how the company is run.

The reason a company sells stock is because they need. A company may want to purchase property, for example, selling stock will give them the capital to do this. The value at which the stock is sold depends on the growth and success of the company.

When a company is successful in the market, the stocks value will. The purchase of stock of a new company is a high risk because there is no assurance that new company will be successful. An investment in a well reputable company will have lower hazard, but great potential for a gain in value. As for example those who purchased the Reliance stock and held it in the beginning had a great return of their investment.

NASDAQ (the National Association of Securities Dealers Automated Quotation System) and NYSE (the New York Stock Exchange) are where companies sell their shares to the open market. You may buy stocks that are not listed through the exchange but this is a topic for another article.

Stocks are sold and bought in the stock exchange so an investor should have a stock broker to make all the transactions. Brokers take the instructions from the client to buy or sell certain stocks. The investor can grant the broker to trade the stock when it hits a particular price or whatever the stock market can get. The broker tries to find a suitable buyer, or seller to fulfill the investors instruction. The brokers have links with the other brokers who correspond to a different buyer or seller. Every broker will fulfill the instruction of their investor to get commission for the sale.