Imagine you want to open a giant lemonade stand business, but you need $100 to buy lemons, sugar, and cups. You only have $10. What do you do?

You could ask 90 of your friends to give you $1 each. In return, you give each friend a tiny piece of your business. If your lemonade stand makes a big profit, your friends get a share of that money. If it fails, they lose their dollar.

That is exactly how the stock market works, just on a much bigger scale!

Spark your thinking!

1. Set up your Social Studies mini spark recording page #67: Discover the Stock Market!

2. Read the information and answer the question, “What is a stock”, on your recording page. Use 2 sentences.

What is a Stock?

A stock (also called a share) is a piece of ownership in a company. When you buy a stock, you become a shareholder. If you buy a share of a famous company like Apple, Disney, or Nike, you actually own a tiny, microscopic piece of that company.

Companies sell stock because they need money to grow. They use the cash from investors to build new factories, invent new products, or hire more workers.

3.  Read the information and answer the question, “How did the stock market start”, on your recording page. Use 3 sentences.

 How Did the Stock Market Start?

The stock market wasn’t invented overnight. It started hundreds of years ago because of sea voyages.

The First Stock: Sea Monsters and Spices

In the 1600s, Dutch explorers wanted to sail across the ocean to bring back valuable spices like cinnamon and pepper from Asia. These trips were incredibly expensive and risky. Ships could sink, get lost, or be attacked by pirates.

No single person wanted to risk all their money on one ship. So, in 1602, the Dutch East India Company decided to try something new. They asked regular citizens to fund the trips. In exchange, citizens got a paper certificate showing they owned a “share” of the voyage’s profits. This was the world’s very first official stock market.

Under the Buttonwood Tree

In America, the stock market started out on the streets of New York City. In 1792, a group

of 24 businessmen met outside on Wall Street under a large buttonwood tree. They signed an agreement to trade stocks with each other. This outdoor meeting spot e

ventually grew into the New York Stock Exchange (NYSE), which is now the biggest stock market in the world.

 

 

 

4. Read the information and answer the question, “How does the stock market work today:, on your recording page. Use 2 sentences.

How Does the Stock Market Work Today?

Today, people don’t meet under trees to trade stocks. It is almost entirely done on computers. The stock market acts like a giant, digital supermarket where buyers and sellers trade shares.

The prices of stocks go up and down every second based on a rule called supply and demand:

• High Demand: If a company invents an awesome new video game console, a lot of people will want to buy that company’s stock. Because the stock is popular, the price goes up.

• Low Demand: If a company makes a bad product or loses money, people will want to sell their stock. Because everyone is selling and nobody is buying, the price goes down.

People invest in the stock market hoping to buy a stock at a low price and sell it later at a higher price, making a profit.

5. There is always a risk involved! The stock market involves risk. There are NO guarantees. If a company goes out of business, the value of its stock can drop to zero and investors can lose ALL of the money they put in. Summarize this information using 5 words.

6. Share your Social Studies mini spark recording page with your teacher or EY coordinator.

Want to try it out for yourself? Learn more about the stock market by completing the Stock Market Badge at the EY website.