Maybe some of you heard that you friend doing a business related to the stock and stock exchange. And you think that he get a significant profit from this business. Actually, how stock and stock exchange work?

This question is the same question that most people asking about. They ask it because people who are in stock exchange business seem does nothing but they get a lot of profit. Even, some of people said that stock exchange is gambling activity. To know it better, you have to learn the basic understanding of stock exchange. In simple way, you share you capital and let the capital grow bigger and bigger. If we measured it annually so the profit comes from the demand of your capital. Let say that you have $ 500 as the capital and start your business. Of course you need to spend the capital to make your business run well let say you need $ 250.

From your effort you get $300 so it means you get $ 50 as the profit. This how stock works, you buy a stock and if the stock becomes bigger and bigger you get the profit. This kind of business is also appearing on the online and the stock holders do the transaction via online.    

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