Difference Between Stock and Share
If you are an investor or a person interested in the stock market, you must be aware of the two commonly used terms "stocks" and "shares" in the world of the share market. Often people confuse these words and use them interchangeably, though there is a subtle difference between them. To some extent, this is also true because both these words show the ownership of an individual in a company but when we talk about 'shares' they represent the unit of ownership in a single company and the term 'stocks' indicate the part of ownership in one or more companies.
To know about them more precisely let's go ahead and describe them in detail.
What is a stock?
Stock is a type of financial security that represents a part/fraction of one or more companies, whenever you buy stock of a company, it means that you are buying a part of that company and thus you become a shareholder in that company.
You can buy stock as much as you want from different companies there is no limit on the number of stocks you bought, After buying stocks, you get a stock certificate as proof, which contains the number of stocks you hold. Generally, people plan to buy the stocks of companies that are possible to increase in value. When the stock price increases, the stockholder can sell them and gain a profit.
And the stockholders can also receive a part of the profits of the company in the form of monthly, quarterly or annual dividends as a result of share-ownership in that company. So, Buying stocks is a good technique to make money.
What is a share?
A share of the stock represents the unit of ownership in the company. you can understand share more clearly by the definition that a bunch of shares is known as stocks. and those who hold them are called shareholders.
The value of a company’s shares can increase and decrease depending on how many people prefer to buy and sell the shares at a given time. This can be affected by a range of factors like - the current performance of the company or how positive investors are in its future performance, etc.
Difference between share and stocks.
| Stock | Shares |
| Stocks do not have a nominal value. | Shares have nominal value. |
| Units of shares collectively held in a company are known as stock. |
Shares is the smallest unit in which the equity of the company is divided. |
| Stocks can only be fully paid up. | Shares can be partially or fully paid up. |
| Stocks may be of different denominations. |
All shares are of equal denomination |
| Fractional transfer possible. | The fractional transfer is not possible. |
| A company can not make original issues of stocks. stocks can be issued by an existing company by converting its fully paid-up shares. |
A company can make original issues of shares. |
So, these are the main key differences between stocks and shares, generally, people get confused about these terms and use them
interchangeably but we hope your confusion will be cleared after reading this post.
Thanks :)
