More stock market basics: the price of each share is driven by

supply and demand, as well as investor sentiment, and domestic

and global economic trends. Investors need to know what they’re
willing to pay for a security (bid) and what a seller is willing to sell
it for (ask). There are spreads between those two prices, but in
the end, if the two come to an agreement, securities trade hands.

The U.S. stock market is volatile, too. The more investors want
to buy shares (or, as demand rises), the higher the price goes.
When there’s less demand, the price of a share drops. Prices or
values of securities are almost always in flux, even when the
markets are not officially open for trading.

And as for how investors make money? Generally, through asset

appreciation, which is when an investor buys a security, that
security increases in value, and then is sold. As such, investors
can make money off of stock market fluctuations, though there
are other ways to generate returns.

Stock Market History: A Timeline

Here is a timeline of major events in the stock market’s history:

• Late 1400s: Antwerp, or modern-day Belgium, becomes the

center of international trade. Merchants buy goods anticipating
that prices will rise in order to net them a profit. Some bond
trading also occurs.

• 1611: The first modern stock trading was created in

Amsterdam. The Dutch East India Company is the first publicly
traded company, and for many years, it is the only company with
trading activity on the exchange.

• Late 1700s: A small group of merchants made the Buttonwood

Tree Agreement. The men meet daily to buy and sell stocks and
bonds, a practice that eventually comes to form the New York
Stock Exchange.

• 1790: The Philadelphia Stock Exchange is formed, helping

spur the development of financial sectors in the U.S., and the
country’s expansion west.