Market basics
What is Stock?
Also called: Share, Equity share
Hinglish mein padhein: Stock ya share kya hota hai?
A stock (or share) is a small unit of ownership in a company. Owning shares gives you a claim on part of its profits and assets.
When a company lists on NSE or BSE, its ownership is divided into shares that anyone with a demat account can buy. If a company has 10 crore shares and you own 1,000, you own 0.001% of it.
Shareholders gain in two ways: the price can rise as the business grows, and the company may pay part of its profit as dividends. Prices can also fall, and in the worst case a failed company's shares can become worthless.
Example
Buying 10 shares of a company at ₹500 costs ₹5,000 (plus charges). If the price rises to ₹550 you have an unrealised gain of ₹500.
Related terms
- Demat accountA demat account holds your shares and other securities in electronic form, the way a bank account holds money.
- Market capitalisationMarket capitalisation is a company's total market value: share price multiplied by the number of shares outstanding.
- DividendA dividend is a share of profit paid to shareholders in cash. Dividend yield is the yearly dividend divided by the share price.
- NSE (National Stock Exchange)The National Stock Exchange of India, based in Mumbai, is India's largest stock exchange by trading volume and home of the Nifty 50 index.