Home » Investing » What is stock and Stock Market?
Drowning in credit debt?

What is stock and Stock Market?



You might have frequently listened or read the word “stock”, “stock investment” and “stock market” in business news bulletins. In case you are a layman with little knowledge of the entire phenomenon, it would surely strike the mind in a due course. Let’s come to know what actually stock known is. A stock or share is a claim on the company’s asset. A public limited company issues the shares possessing some monetary value for fund raising purpose. Stocks are floated to the general public as an investment alternative to get return in form of dividend (annual or interim profit that the company announces) or capital gain (profit for shareholder that he earns on the difference between his buying price and selling price). There are many types of stocks distinguishable on the basis of their characteristics i.e., common stocks, preferred stocks, callable common stocks, callable preferred stocks, hybrid stocks and convertible stocks etc.

Stock Markets

Shares are floated through Initial Public Offerings (IPOs) for first time sale to general public. Company contacts some financial institutions and allocates the contract of IPO to anyone of those after mutual agreement on terms and conditions. After the first time issuance, shares are further traded in the stock markets where the transaction of shares takes place. There are two pertinent types of stock markets. First is the organized stock exchange (shares of only stock exchange listed companies are traded here) and the other is known as Over The Counter (OTC) market (shares of each and every company may be traded here). Usually investors prefer to trade in organized stock exchanges because shares traded here are backed by the authorization statutory authority. Only those firms are listed here which fulfill the legislative requirements e.g., debt to equity ratio, return on investment, and operative and financial position of the company compared to the prescribed threshold.

About Emaad Qureshi

  • Great article, totally what I needed.

  • Hey! This is my first comment here so I just wanted to give a quick shout out and say I truly enjoy reading through your
    articles. Can you suggest any other blogs/websites/forums
    that cover the same topics? Thank you so much!

  • emaad

    Please subscribe to our posts

  • Wow, increɗible blog structure! How lenցthy have you eveг been blogging
    for? you made blogging look easү. The entire loоk of your web site
    is magոificent, let аlonе the content material!

  • Hello to every , for the reason that I am actually keen of reading this website’s post to be
    updated on a regular basis. It consists of nice information.

  • I just want to tell you that I am very new to blogging and site-building and really loved this blog site. Almost certainly I’m going to bookmark your website . You surely come with outstanding writings. Kudos for sharing your web site.

    • emaad

      Thanks..Keep visiting our blog…Please subscribe to our blog