Shares

DEFINITION of Shares

Shares are the units of the ownership of a company, usually traded on the stock market. They are also known as stocks or equities.

WHAT IT IS IN ESSENCE

The total number of outstanding shares in a company is equal to its value on the market, or its market cap.

Trading them mean buying and selling a portion of a company on a share market (or a stock exchange).

Each share has value. The value of a share is determined by the company’s present performance. Future performance can impact share price as well.

It is possible to make money when their price increases and you sell your shares, and when a company pays a dividend. When you trade them you’re buying and selling a portion of a company. 

A share is a unit of ownership in a company, mutual fund, financial asset, or trust. Buying them in a company provide the shareholder with equity in that company.

Because you own a part of the company, as a shareholder you’re are entitled to a portion of the profits it makes, and these are paid out as dividends. This dividend income can be one of the ways in which they generate returns for their holders.

Shares are issued by the company in question and sold to investors for cash in an ‘initial public offer’ or ‘float’. After this initial sale, shares are then bought and sold on the stock market, unless bought back by the company at a point in the future.

HOW TO USE

Each share has value. The value of a share is determined by the company’s present performance. Future performance can impact share price as well. You can make money when a share price increases and you sell your shares, and when a company pays a dividend.

What is the difference between share and stock?

The stock is a general term used to describe the ownership certificates of any company.

And shares refer to the ownership certificates of a particular company.

So, if investors say they own stocks, they are generally referring to their overall ownership in one or more companies.