Stock is the shares into which ownership of an organization is divided legally. In American English, the stock is collectively referred to as “stock”. A single share of stock represents a fractional ownership in percentage terms of the total number of outstanding shares. Shares can be held by any person or organization at any time.
There are two general categories of stock: common and preferred. Common stock is registered in the name of the company and traded on the open market. Preferred stock, also called “preferred stock”, is normally listed on the public stock exchange and is issued with a preference over the common stock. The differences between the two categories of stock are mainly on the basis of rights. One of these rights is referred to as the “rights” and the other as “dividend payments”.
In general, shares traded on U.S. stock exchanges are represented numerically. For example, if one trades shares on the New York Stock Exchange (NYSE) or the NASDAQ, they are represented by individual symbols. When trading shares internationally, however, each currency symbol is interpreted differently and a particular symbol may not correspond to a particular stock. That is why it is sometimes necessary to exchange different currencies for international stock trades. In the case of stock exchanges, there is a list of stock exchanges that are commonly used. These include the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE).
Among the most popular stock exchanges today are the New York Stock Exchange and the NASDAQ. Both these stock markets allow corporations to list their shares on the exchanges for trading. Companies use the stock exchanges to display information about their financial health, as well as to allow the buying and selling of their stock by customers. Some of these companies include blue chip companies like Microsoft, Apple Computer, and United States Steel Corp.
One of the main reasons that corporations set up a stock exchange is to facilitate the sale or purchase of ownership in the corporation. It also provides buyers and sellers with a venue to buy and sell shares among company owners. Some companies issue more than one type of stock, usually common stock or preferred stock. Common stock is issued by the general public and traded on the stock exchanges. Preferred stock, however, is issued by a corporation and only the company members can share in the profits made by the company.
When buying and selling stock, an investor generally purchases shares at a pre-determined price. The investor will then wait a specified amount of time before selling the stock. The advantage to this system is that a trader can make money by selling his or her shares at a higher price than was paid for them. For this reason, many investors choose to purchase a small number of shares at a time and wait for a favorable price before selling them for a profit.