What is a stock?

Written by Bode
Updated 3 years ago

Stock is ownership in a company. Stock is sold in units called shares. A person that owns stock is called a shareholder or stockholder.

Think of the company’s ownership as a Pizza. Each slice in that Pizza pack represents shares in a company. When you buy the shares of a company, you own a slice of that company. The size of your slice depends on the amount you paid in comparison to what the whole Pizza cost.

And just like Pizzas, companies’ shares come in different sizes: Small Cap., Mid Cap and Large Cap. We discuss those categories in detail later.

Before the digital era, stock used to be owned as paper certificates but is almost entirely electronic now. 

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