How are opportunity stages used?

The opportunity stage describes the current state of an opportunity--and can be used to track opportunity life cycles. For example, if you are looking at a brand new opportunity, you might mark the opportunity as being in the "Qualifying" stage. Once you are actively working the opportunity its stage might change to something like "Engaged" or "Active." Finally, you can tell an opportunity is completed if the stage is "Closed." Opportunity stages are user-definable, so you can create any phrases you want to suit your business needs.