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In finance a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. In British English, the usage of the word share alone to refer solely to stocks is so common that it almost replaces the word stock itself.
In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.
By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price.
A company's stock price reflects what investors think about the stock,
not necessarily what the company is "worth." For example, companies that are
growing quickly often trade at a higher price than the company might currently
be "worth." Stock prices are also affected by all forms of company and market
news. Publicly traded companies are required to report quarterly on their
financial status and earnings. Market forces and general investor opinions can
also affect share price.
Quick Facts on Stocks and Shares
- Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
- Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer no
guarantee of any returns and can lose value, even in the long run
- Investments in stocks can generate returns through dividends, even if the price
How does one trade in shares ?
Every transaction in the stock exchange is carried out through licensed members called brokers.
To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders.
The general investors should identify a sub-broker for regular trading in shares and palce his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it .
What are active Shares ?
Shares in which there are frequent and day-to-day dealings, as distinguished from partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to economic and political events and are, therefore, subject to sudden price movements. Some market analysts would define active shares as those which are bought and sold at least three times a week. Easy to buy or sell.
Stock Market Terms - Definition and Meaning
Stock Market Terms - Share Market Terminology - Investment Definitions, Financial Term Meaning A to Z
A - Active Share, Amortization, Application-Money Asset Coverage Asset Financing, Auction Market, Auctioning of an Issue, Automated Screen Trading (AST), Average, Averaging, Bear Cycle, Book Profit, Booking Profit, Broker, Book Value, BSE Sensitive Index or SENSEX, Bullion, Buy and Hold Strategy, Call Money, Capital Asset, , Capital Market, Cash Cow, CD or Cum – Dividend, Certificate of Deposit, Certified Cheque, Chinese Wall, Circuit Breaker, Clearing, Clone Fund, , Collection Ratio, Commodities Market, Commodity, Compound Growth Rate, , Correction, Cost-Benefit Analysis, Cover, Covered Call, Creeping Acquisition, CRISIL, Cum-Dividend or CD, Crossing, Cum-Rights or CR, Cumulative Preference Shares, Cyclical Shares - Daily Margin, Dawn Raid, Debentures, Defensive Investment, Defensive Stock, Delisting, Deflation, Delivery Order, Delivery Price, Dematerialization of Scripts, Depreciation, Derivative, Discounted Debentures, Discounting, Dividend Cover, Dividend Play, Dividend Rollover Plan, Dow Theory, Depository Receipt, Efficient Market Hypothesis, Eligible Securities, ELSS, Employee Buyout, Employee Participation, Employee Share – Ownership Plan, Equity Shareholders, Eurodollar, FIFO or First In First Out, FII, Fill or Kill Order, Fixed Income Investments, Floating Stock, Floor Broker, Floor Trader, FForward Dealing / Trading, Forward Delivery, Forward Shares, Forward Integration, Free Lunch Theorem, Free Market Economy, Front – End Load, Front – Running, Frozen Assets, Fully Diluted Earnings Per Share, Fully Paid Share Capital, Fundamental Analysis, Futures, Futures Contract, Futures Market Glamour Shares, Godfather Offer, Going Long, Going Private, Going Public, Going Short, Gold Certificates, Golden Handcuffs, Golden Handshake, Golden Share, Good Delivery, Good Faith Deposit, Graham and Dodd Strategy of Investment, Great Crash, Gross, Gross National Product (GNP), Growth Shares, Gun Jumping, Glamour Issue.Havala or Hawala (also, Making Up Price, Head and Shoulders, Hedging Against Inflation,Inefficient Market, Insider, Insider Trading, Insolvency, Institutional Investor, Intangible Assets, Interbank Market, Interest Rate Risk, International Finance Corporation, International Monetary Fund, Inventory, Inventory Turnover, Inverted Yield Curve, Investment Analyst, Investment Club, Investment Company, Investment Company Shares (Close – Ended), Investment Company Shares (Open – Ended), Investment Horizon, Investment Letter, Investment Trust, Investor Protection, IPO, Irredeemable Debentures, Issue Price.
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