Trader's Glossary

Stock

Also known as a share or equity, a stock is a tradable security which grants the purchaser ownership of a fraction of a corporation, as well as a claim on a percentage of its assets and earnings (dividends). The two main types of stock are common and preferred. Common stock entitles owners to dividends as well as a say at stockholder meetings. Preferred stock owners are entitled to higher dividends but do not have the right to vote at shareholder meetings.