Friday, September 23, 2011

What is the difference between a stock and a share?

As far as I can understand a stock and a share may have the same meaning. How can they be distinguished from one another when used? How can I understand when a stock means a share or it means all shares equaled to capitalization of a company. How to understand a sentnce - What do you get when you own a stock? What stock is meant here? |||Stock is the overall term used to describe a person's ownership in a corporation. Shares tell you how big a part of the corporation that person owns. If I told you I own stock in Yahoo, that could mean I won one share or 1,000 shares or more. It means that I own a part of Yahoo. If I tell you I own 1,000 shares of Yahoo, if you know the price per share and the total value of all shares (that is called the market cap) then you would know how much of Yahoo I actually own. |||No difference. Bonds or fixed interest are always referred to as stock. It used to be when the share had a nomial value of 拢1. So 拢100 stock would be divided into 4 * 25p stock units rather than shares. Something like P %26amp; O Deferred Stock. You could also say "I have some stock in Barclays or IBM". Basically no difference. I would stick to shares, being a share of the company in every aspect.

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