You may have heard the term Share, Stock Market, Trading etc. If you wonder and want to know what all these terminologies actually mean you are at the right place. What are stocks and shares? What is the difference between shares and stocks? What is Stock Market? And how does Stock Market works? Let’s find out the answers for these questions one by one. In this blog, we will discuss the meaning and difference between Stocks and Shares. Also we will explore why do companies sell their shares?
What are Stocks & Shares?
Do Stocks and Shares refer to same thing or they are used for different contexts? Let’s see.
Nowadays, people have started using the terms “Stocks” and “Shares” interchangeably. Both of these terms are used to depict your ownership in company. We should be aware that there are two certificates that are seen in terms of the ownership of the company.
- Ownership of a particular company is called as the “Certificate of Shares”.
- Ownership certificates of more than 1 company are called as “Certificates of Stocks”.
But there is slight difference between “Stocks” and “Shares”. Shares refer to your ownership in any specific company. However stocks refer to your overall ownership in one or more companies. If you own a share in any company, you will share the company’s profit and so you are called a Shareholder. Let us understand this with an Example:
Assume that Mr. ABC owns certificate of Company X Inc. We will call them as Certificate of Shares. Now if Mr. ABC owns certificate of many companies, we would call them Certificate of Stocks.
From above statements, it is very clear that Stocks are just larger form of Shares.
In our next blog, we will be discussing about Stock Market and its basics. If you need to know more & trade in the Stock Market, you can contact ProfitAim Research. We are a SEBI Registered investment advisory firm that helps traders’ fulfils their dream of financial expansion and stability.