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What is a stock?
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Quick answer
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. Owning a stock means owning a small piece of a company.
Key things to understand
- Owning a stock means owning a small piece of a company.
- Companies sell stock to raise money to grow.
- Shareholders can profit if the share price rises or if the company pays dividends.
- Prices move with the company's performance and overall market sentiment.
- Stocks can lose value too — they carry risk as well as potential reward.
People also ask
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.