Finance
What is A stock?
A stock (also called a share) is a unit of ownership in a company. Buying one makes you a part-owner, entitled to a share of the company's profits and, often, a vote in some decisions.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains a stock.
Key things to understand
- 1Owning a stock means owning a small piece of a company.
- 2Companies sell stock to raise money to grow.
- 3Shareholders can profit if the share price rises or if the company pays dividends.
- 4Prices move with the company's performance and overall market sentiment.
- 5Stocks can lose value too — they carry risk as well as potential reward.
Frequently asked questions
- What's the difference between a stock and a share?
- They're used almost interchangeably. 'Stock' often refers generally to ownership in companies, while a 'share' is a single unit of that stock.
- How do people make money from stocks?
- Two main ways: the share price rising (so you could sell for more than you paid) and dividends (a cut of profits). Both are uncertain — prices can fall too.
- Is buying stocks risky?
- Yes — share prices can rise or fall, and you can lose money. Spreading investments and a long time horizon can reduce risk. This is general information, not investment advice.