Preferred Stock

A type of equity, preferred stock is a class of ownership in a company. Preferred stock has a higher claim on earnings and assets than common stock, but does not come with voting rights. Preferred stock dividends must be paid in full before dividends may be paid to common stock shareholders. In the event of liquidation, preferred stockholders have rights to a company’s assets before common stockholders, but only after bondholders and other debtholders have been paid in full.

This is a definition, not a recommendation. Options carry risk and can expire worthless. See how the desk actually trades at TrueTrader.