What is Stock?

A stock, also known as a share or equity, is a type of security that signifies proportionate ownership in a corporation. When you buy a company's stock, you are purchasing a small piece of that company, making you a shareholder. This ownership typically grants you rights, such as voting on corporate matters (like electing the board of directors) and receiving a share of the company's profits, which may be distributed as dividends.

Stock prices fluctuate based on the company's financial performance, industry trends, overall economic conditions, and investor sentiment. Investors aim to profit from stocks through capital appreciation (selling the stock for more than they paid) and/or dividend income. Stocks are generally categorized as common stock, which carries voting rights, or preferred stock, which often has priority for dividend payments.