Finance: The Difference Between Stocks and Shares

Finance: The Difference BUSINESS

LegacyFX Introduction

BETWEEN STOCKS AND SHARES

Finance: The Difference Between Stocks and Shares Many people use the words stocks and shares interchangeably. There are differences between the two, although both represent an equity stake in a company. Stocks can encompass several companies, while shares are tied to a single company.

Value Each share in a company has a specific value and the value of all shares is equal. However, there can be two different stocks in a company that have different values from each other. Stocks have no nominal value, while shares are associated with some nominal value.

Paid Up Value The nature of stocks means they are always fully paid up, whereas shares can be partially or fully paid up.

Representation of Ownership Owners of stocks and shares both have a partial ownership of the company or companies they have invested in, which incurs certain rights and responsibilities. Stocks can be comprised of bundles of shares, with each individual share representing the smallest unit of value it is possible to own in a company.

The nature of stocks means they are always fully paid up, whereas shares can be partially or fully paid up.

Owners of stocks and shares both have a partial ownership of the company or companies they have invested in, which incurs certain rights and responsibilities.

You can learn more about trading stocks by visiting the LegacyFX blog.