Can somebody explain what are stocks and shares?

Question

I really want to understand what shares and stocks are and what is shares market?
please explain in detail as i do not anything about this

Answer 1

Shares are part of a capital.Most of the companies raise their capital through the issue of shares.If one can buy shares of a particular company it is like buying the owner ship of the company. Stocks are type of buying and selling instrument. share market is a market in which buying and selling of shares is made.

Answer 2

1

Answer 3

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Penny stocks, also known as cent stocks in some countries, are common shares of small public companies that trade at low prices per share.
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Best

Answer 4

Companies used to be owned by private families. You could say that the father of the house owned 100%.

In the 1800's in England, people got together and tried joint ventures, where several men would own one company by simply contributing the money needed. Each one would own a % according to what they gave.

England was the first to seek out joint ventures by offering ownership to the general public. What they did is they offered portions of the company, and they identified the value of the portions by dividing it up equally into "shares".

In the US, when a company wants to sell shares, it has to apply to the Attorney General and also register with the SEC. The AG grants the charter and tells the company how many shares can be sold and at what minimum price (the par value). They can say 1 billion shares each with a par value of one cent. (Shares are usually given a very low par value.)

When the shares hit the market, they sell for whatever the market will bear, and the performance of the company is really what decides how much the company is worth.

"Common" shares are the normal shares of a company.
"Preferred" shares usually enjoy the first payment from dividends.
"Convertable" shares are usually preferred but have an option to convert to common shares at the owner's descretion.

"Warrants" and "options" are not shares, they're "rights" to shares. Someone who has an option or a warrant has the "right" to buy a share at a set price. The rights usually have expiration dates.

There's also a thing called a "put". It works backward from an option. A person who owns a "put" has the rights to a loan and the option of paying that loan with shares.

Here are some ways of buying stocks:

One way is to just buy them. You have a cash account and you just put in an order and see if there is someone out there willing to sell at the price you set.

Another way is to buy on margin. That means you have a cash account, and your account has the right to borrow more money to buy with. You can normally exercise the margin indefinitely without ever having to pay it back as long as the value of your stock doesn't go below a certain point. As long as you always have enough cash to pay the loan back, you're fine. When you go below a certain amount, you can face a "margin call" and you'll have a certain amount of time to deposit more money into your account to satisfy the debt load. If you don't, your stocks will be sold and the debt covered however the account holder sees fit.

Another way to buy is by "shorting". This is just backwards from buying on margin. Instead of borrowing money, you borrow stock, and you agree to repay with stock in the future. When you "short" a stock, though, your hope is that the stock price goes down. When you borrow, you get the current value of the stock. When the price goes down, you satisfy your debt with cheaper shares, and that's how you make your profit.

Answer 5

The words are really interchangable.

A corporation is owned by shareholders. Suppose XyZ Corp. has 100 shares of stock. If you own 1 share, then you own 1% of the company. If you own 4 shares, then you own 4% of the company.

Stock certificates are issued by the company to evidence that you own your share of the company. In the example above, each stock certificate represents a 1% share of ownership.

Suppose a company had 25 shares. Each stock certificate would represent a 4% share ownership of the entire company.

Suppose a company had 10,000 shares, each stock certificate would represent a 0.01% share of ownership of the entire corporation.

Going back to the first example, 100 shares, each representing 1% ownership. Suppose the company is estimated to be making $500 profit for the year. That is $5 profit per share. Suppose there is another company with 100 shares that is predicted to be making $50 profit per share. Clearly, the second company's stock would probably trade for a higher amount.

Looking at this another way, suppose one share of a company that has 50 shares total is trading for $10. The one share represents 2% of the company. If 2% is $10, then 100% is $500. Put another way, based upon what the stock is selling for, the market capitalization of the company is $500.

Hope this helps!

Answer 6

A Share and a Stock are the same thing in different terms.

A Stock is a piece of paper that represents a "share" (or percentage) of ownership of a company.

Therefore if you own Stocks in a company you therefore own a Share of the company. Shareholders and Stockowners are the same thing for a publicly traded company (e.g. private companies may not have stocks but the owners still own shares of the company).

Answer 7

Share mkt is a place where u can buy and sell shares and also vice versa.... Also companies who r in need of capital use the share mkt to obtain capital for thier operations.... As RBI is in charge for regulating banks,SEBI (Securities and Exchange Board of India) is responsible for regulating Share Market..

Answer 8

www.investorwords.com explains all the terms dealing with investing.