Stock

A stock is a small ownership slice of a company. When a business wants to raise money without borrowing it, it can sell pieces of itself to the public, and each piece is called a share. If you own a share, you own that tiny fraction of the company — its assets, its future profits, and (in most cases) a vote on certain company decisions.

Companies whose shares are traded on public exchanges, like the New York Stock Exchange or Nasdaq, have their prices set continuously by buyers and sellers throughout the trading day. That price moves based on supply and demand: how many people want to buy versus sell at a given moment, driven by things like earnings reports, news, interest rates, or just overall mood in the market. There's no single "correct" price — it's whatever the last trade actually happened at.

The nuance beginners often miss is that "stock" and "share" get used almost interchangeably, but a stock is the asset class or the specific company's equity in general ("I bought some stock"), while a share is the individual unit of it ("I bought 100 shares"). Also, owning stock doesn't mean owning a physical piece of the company's buildings or products — it's a legal and financial claim, tracked electronically, that can be bought or sold in seconds.

Another point of confusion: not all stock is the same even within one company. Common stock usually comes with voting rights but sits behind other claims if the company fails. Preferred stock typically has no vote but gets paid before common shareholders in areas like dividends. Most of what trades actively on a day-to-day basis, and what most beginners mean by "stock," is common stock.