Basically the stock market works in the sense that you can buy and even sell shares in a company. When a company makes its shares available for the public to buy they are referred to as stocks and this is what you are trading. In most cases what you get when you purchase a stock is a very small portion of the company. Read more at http://en.wikipedia.org/wiki/Stock_market.
they sell stocks to people, its kind of like gambling because you can lose all your stocks, my friends family bought stocks but noone contributed to them so they lost alot of moneyy. its a cheap scandal really