Basic Concepts

Stock

Share / Equity

Definition

A security representing ownership in a corporation

Explanation

When you buy a stock, you become a part-owner (shareholder) of that company. If the company makes money, you may receive dividends. If the stock price rises, you can sell for a profit. Companies issue stocks to raise capital, and investors trade them on stock exchanges.

Example

Buying 1 share of Apple = owning a tiny piece of Apple Inc.