What exactly are stocks?

Primarily a stock means a share or a small fraction of a unit in a company鈥檚 ownership. To understand it better, let鈥檚 assume an example that you own a company and you issued 10 stocks of your company. In other words each stock would have a worth of about 10% or you can say one-tenth of the firm. Now if you鈥檒l possess one stock and purchase another stock, then of course your stake or ante in the stocks of the company would increase. Basically if you possess a company鈥檚 stock or if you have a share in company鈥檚 ownership rights, then you are also an integrated part of the ownership of the corporation. Some of the advantages of trading stock options include the following:


A share in the profit of the company

Right to choose the board members of the company
The real advantage however, of investing in a stock is that even if your firm loses a court case then the worst possibility that could be that your stock will become worthless and that鈥檚 it. You don鈥檛 have to fret about creditors being after you for your personal property.

A stock is a unit of ownership. If you buy a stock you own part of the company. Stocks are also known as a share.

Check out the wikipedia definition...

Owning a company's stock means you buy a small "share" of their worth. Technically, if you were to own a number of shares of Subaru, you would own part of the company. That was the old days though. You don't actually own "anything". You simply invest into their worth and play the market, investing in their future as a company in the hopes that their company's value increases, along with their stock so you may sell it at a higher price than you what you paid. If you were to own a Large amount of stock in one company and you were the primary shareholder, meaning the one with the most shares, you would probably be considered part of the company.

Note: Owning shares means you own part of the company, but it doesn't mean you can walk in and say you own a bunch of chairs or pencils and walk out with it. You own part of their investment.

Once a company goes public. It normally raises funds or gain liquidity in the market by offering EQUITY in themselves.
Hence the stock is traded on a public exchange.