Stock

Investments

Quick Definition

A Stock (or Share) represents ownership in a company and a claim on a part of its assets and profits.

Detailed Explanation

When you buy a stock, you become a shareholder (part-owner) of the company. Stocks are traded on exchanges like the National Stock Exchange and Bombay Stock Exchange, regulated by the Securities and Exchange Board of India.

Companies issue stocks to raise capital, and investors buy them to earn returns through price appreciation and dividends.

Types of Stocks

  • Equity Shares: Ownership with voting rights
  • Preference Shares: Fixed dividend, limited voting rights

How You Earn from Stocks

  • Capital Gain: Selling at a higher price
  • Dividends: Share of company profits

Why Stocks Matter

  • Wealth creation over long term
  • Ownership in businesses
  • Liquidity (easy to buy/sell)

Risks of Stocks

  • Market volatility
  • Price fluctuations
  • Risk of loss

Example

"If you buy shares of a company at ₹100 and sell at ₹120, you earn a ₹20 profit per share."

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