Earnings
How much profit the company made last quarter, and how that compared to what analysts expected.
Beat expectations → buyers usually outnumber sellers next morning, price ticks up.
All learn paths
Beginner path · 12 min
Stock market 101
What stocks are, why prices move, and how to open your first brokerage account in the US or India — without the jargon.
Beginner 12 min readNo jargonWorked examples
01
1What is a stock, really?
A stock (also called a share or equity) is a tiny slice of a company. If Apple has issued 15 billion shares and you own 15, you own one ten-billionth of Apple. You're a part-owner — entitled to a part of every dollar of profit Apple ever makes, and a tiny vote on what the company does.
That's the whole idea. Everything else — tickers, charts, P/E ratios, brokerage apps — is plumbing on top of “you own a piece of the business.”
02
2Why do stock prices move?
The price of a share at any moment is whatever the most recent buyer and seller agreed on. That's it. Big arrow-on-screen theatrics aside, all moves come down to a steady fight between two groups:
- Buyers who think the business is worth more than the current price (or want to own it for non-financial reasons).
- Sellerswho think it's worth less, need cash, or are simply rebalancing.
What changes the balance? Mostly four things:
News
Anything that changes the story — a new product, lawsuit, regulator action, CEO change, macro headline.
A drug-approval headline can move a biotech stock 30% in seconds.
Rates & money
When borrowing money is cheap (low interest rates), people pay more for stocks. When it's expensive, less.
The 2022 rate-hike cycle dragged most US stock prices down without any specific company doing anything wrong.
Sentiment
Pure crowd psychology — fear, excitement, FOMO. Short-term moves are mostly this.
Index futures dropping 2% on a Sunday night with no headlines = sentiment shift, not new facts.
03
3The vocabulary you actually need
Market cap
Share price × total shares. The price tag on the whole company.
If Apple's at $200 with 15B shares, market cap = $3T.
Dividend
A cash payment the company sends shareholders each quarter. Not every stock pays one.
A 2% dividend yield = you'd get $2/year for every $100 of the stock you own.
P/E ratio
Price per share ÷ earnings per share. How many years of current profit you're paying for upfront.
A P/E of 25 means "the market is paying for 25 years of today's earnings." High = optimism (or expensive). Low = pessimism (or cheap).
Index
A weighted basket of stocks tracked as a single number — a thermometer for that group.
S&P 500 = the 500 biggest US companies. Nifty 50 = the 50 biggest Indian ones.
ETF
An Exchange-Traded Fund. One ticker that buys you a basket of stocks under the hood.
VOO buys you a slice of the S&P 500. NIFTYBEES buys you a slice of the Nifty 50.
Volume
How many shares changed hands today. High volume = lots of attention; low = nobody trading.
An earnings day usually shows 3–10× the stock's normal volume.
04
4Where stocks live: exchanges
Stocks aren't bought from companies directly — they trade on exchanges, which are matchmakers between buyers and sellers. Every stock belongs to one or two exchanges.
05
5Order types — what those buttons actually do
Market order
Buy or sell right now at whatever price is available.
Quick to fill. Risk: in a fast-moving or thin stock, the price you get can be noticeably worse than what you saw on screen.
Limit order
Buy at or below X. Sell at or above X. The order only fills if the market reaches your price.
Limit-buy AAPL at $180 → if the price drops to $180 or lower, you get filled. If it never drops, you don't buy anything.
Stop-loss
Auto-sell if the price falls to X. Designed to cap your downside on a position.
You buy at $100, set stop-loss at $90 → if the price ever touches $90, it sells automatically, locking in the 10% loss.
06
6Opening a brokerage account
A brokerage account is the bridge between your bank account and the exchange. You deposit money there; the broker places your orders. Every country has its own choices; here are the ones most beginners use.
United States
| Broker | Good for | What you'll need | Cost |
|---|---|---|---|
| FidelityRecommended | Best all-rounder. Solid app, no commission, great research, no minimums. | SSN, ID, US address, bank login | $0 stock & ETF trades |
| Charles Schwab | Almost identical to Fidelity. Owns Thinkorswim if you ever go advanced. | SSN, ID, US address, bank login | $0 stock & ETF trades |
| Robinhood | Friendliest first app. Easy interface, fractional shares, instant deposit. | SSN, ID, US address, bank login | $0 stock & ETF trades |
| Interactive Brokers | If you'll want to trade non-US markets later (Japan, Europe, India ADRs). | SSN/Tax ID, ID, address, bank login | Tiered, usually $0–$1 per trade |
- FidelityRecommended
- Good for
- Best all-rounder. Solid app, no commission, great research, no minimums.
- What you'll need
- SSN, ID, US address, bank login
- Cost
- $0 stock & ETF trades
- Good for
- Almost identical to Fidelity. Owns Thinkorswim if you ever go advanced.
- What you'll need
- SSN, ID, US address, bank login
- Cost
- $0 stock & ETF trades
- Good for
- Friendliest first app. Easy interface, fractional shares, instant deposit.
- What you'll need
- SSN, ID, US address, bank login
- Cost
- $0 stock & ETF trades
- Good for
- If you'll want to trade non-US markets later (Japan, Europe, India ADRs).
- What you'll need
- SSN/Tax ID, ID, address, bank login
- Cost
- Tiered, usually $0–$1 per trade
India
| Broker | Good for | What you'll need | Cost |
|---|---|---|---|
| ZerodhaRecommended | India's most popular. Clean app (Kite), best educational content (Varsity). | PAN, Aadhaar (e-sign), bank account, signed cheque | ₹0 delivery (long-term). ₹20 per intraday trade. |
| Groww | Simplest signup, instant-feeling onboarding for first-timers. | PAN, Aadhaar, bank account | ₹0 delivery. ₹20 per intraday trade. |
| Upstox | Fast app, good for someone who'll trade more actively. | PAN, Aadhaar, bank account | ₹0 delivery. ₹20 per intraday trade. |
| ICICI Direct | Already bank with ICICI? Linked account = one-stop setup. | ICICI bank linkage, PAN, KYC | Higher (0.55% delivery by default; subscription plans reduce it) |
- ZerodhaRecommended
- Good for
- India's most popular. Clean app (Kite), best educational content (Varsity).
- What you'll need
- PAN, Aadhaar (e-sign), bank account, signed cheque
- Cost
- ₹0 delivery (long-term). ₹20 per intraday trade.
- Good for
- Simplest signup, instant-feeling onboarding for first-timers.
- What you'll need
- PAN, Aadhaar, bank account
- Cost
- ₹0 delivery. ₹20 per intraday trade.
- Good for
- Fast app, good for someone who'll trade more actively.
- What you'll need
- PAN, Aadhaar, bank account
- Cost
- ₹0 delivery. ₹20 per intraday trade.
- Good for
- Already bank with ICICI? Linked account = one-stop setup.
- What you'll need
- ICICI bank linkage, PAN, KYC
- Cost
- Higher (0.55% delivery by default; subscription plans reduce it)
07
7Your first few weeks — what to actually do
- Paper trade first.Most brokers offer a simulated mode (Zerodha's Sensibull, Schwab's Thinkorswim, Webull's paper account). Place pretend orders for two weeks. You'll feel the difference between “the chart went up 5%” and “your account got 5% more money in it.”
- Start with an ETF, not a single stock.A single stock can lose half its value in a week on company news; an ETF holds hundreds of companies so no one of them can wreck you. Common starting picks: VOO/SPY (S&P 500) in the US, NIFTYBEES (Nifty 50) in India.
- Buy a small amount monthly. Buying the same rupee/dollar amount every month is called dollar-cost averaging. It removes the “am I buying at the top?” anxiety and statistically beats trying to time the market for almost everyone.
- Don't check the price more than once a day. Short-term price moves are almost entirely noise. The longer you hold an index ETF, the closer your return gets to the economy's underlying growth (historically ~7-10%/year for the US, ~12%/year for India — past returns don't guarantee future ones).
08
8What can go wrong
Single-stock blow-up
The company implodes — fraud, lawsuit, bankruptcy. Your shares can go to zero.
Enron (2001), Yes Bank (2020), Silicon Valley Bank (2023).
Market crash
Whole indexes drop 20%+. Happens roughly every 7-10 years. Always recovers, but timing varies.
March 2020 COVID crash → S&P down 34% in 33 days, fully recovered in 5 months.
Inflation drag
If your money grows 4%/year and inflation is 6%, you're actually losing buying power.
That's why most beginners use stock index ETFs as the long-term inflation hedge.
Your own brain
Most beginners lose money not by picking bad stocks but by panic-selling at the bottom and FOMO-buying at the top.
Studies show the average investor underperforms their own fund's return by 1-3%/year just from buy/sell timing.
Glossary
- Bull market
- Prices rising over months/years. Optimistic.
- Bear market
- Prices falling 20%+ from a recent peak. Pessimistic.
- Liquid
- Easy to buy or sell at a price close to the last traded one.
- Volatile
- Price swings a lot day to day. More risk + more reward.
- Yield
- Annual income from a stock (dividend) or bond, as a % of price.
- Beta
- How much a stock moves vs. the whole market. 1.0 = same. 1.5 = swings 50% more.
- Spread
- Difference between the best buy price and best sell price. Wide = thin market.
- T+1 / T+2
- When a trade actually settles. T+1 means cash moves 1 business day later.
- Brokerage account
- The account at a broker that holds your cash and shares.
- Demat (India)
- The dematerialized account that holds Indian shares electronically.
- Margin
- Borrowed money from the broker to buy more. Amplifies gains AND losses.
- Short selling
- Betting a stock goes DOWN. Borrow shares, sell now, buy back later.
Not financial advice. This page is educational only — it explains concepts so you can decide for yourself. Nothing here is a recommendation to buy, sell, or hold any security or asset.