Share (finance)

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Securities

Securities Bond Equities Investment Fund Derivatives Structured finance Agency Securities
Markets Bond market Stock market Futures market Foreign exchange market Commodity market Spot market Over-the-counter Market (OTC)
Bonds by coupon Fixed rate bond Floating rate note Zero coupon bond Inflation-indexed bond Commercial paper Perpetual bond
Bonds by issuer Corporate bond Government bond Municipal bond Sovereign bonds
Equities (Stocks) Stock Share IPO Short Selling
Investment Funds Mutual fund Index Fund Exchange-traded fund (ETF) Closed-end fund Segregated fund Hedge fund
Structured Finance Securitization Asset-backed security Collateralized debt obligation Collateralized mortgage obligation Credit-linked note Mortgage-backed security Commercial mortgage-backed security Residential mortgage-backed security Unsecured bond Agency Securities
Derivatives Options Warrants Futures Forwards Swaps Credit Derivatives Hybrid Securities
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Suppose a group of persons or a business organization propose to start a new project requiring large amount of money which they are unable to arrange. They form a public limits company and invite the public to be a part of the project. The company as per laws of of the government announces the issue of shares through which any eligible person can become a partner (shareholder)of the company. The word stock simply refers to a supply. You may have a stock of T-shirts in your closet or a stock of pencils in your desk. In the financial market, stock refers to a supply of money that a company has raised. This supply comes from people who have given the company money in the hope that the company will make their money grow. A market is a public place where things are bought and sold. The term "stock market" refers to the business of buying and selling stock. The stock market is not a specific place, though some people use the term "Wall Street"—the main street in New York City's financial district—to refer to the U.S. stock market in general.

In financial markets, a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. In British English, use of the word shares in the plural to refer to stock is so common that it almost replaces the word stock itself. In American English, the plural stocks is widely used instead of shares, in other words to refer to the stock (or perhaps originally stock certificates) of even a single company. Traditionalist demands that the plural stocks be used only when referring to stock of more than one company are rarely heard nowadays.

The income received from shares is called a dividend, and a person owning shares is called a shareholder.

A share is one of a finite number of equal portions in the capital of a company, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends, and to a portion of the value of the company in case of liquidation. Shares can be voting or non-voting, meaning they either do or do not carry the right to vote on the board of directors and corporate policy. Whether this right exists often affects the value of the share. Voting and non-voting shares are also known as Class A and B shares respectively.