Shares

AAA

DEFINITION of 'Shares'

A unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends. The two main types of shares are common shares and preferred shares.

INVESTOPEDIA EXPLAINS 'Shares'

In the past, shareholders received a physical paper stock certificate that indicated that they owned "x" shares in a company. Today, brokerages have electronic records that show ownership details. Owning a "paperless" share makes conducting trades a simpler and more streamlined process, which is a far cry from the days were stock certificates needed to be taken to a brokerage before a trade could be conducted.

While shares are often used to refer to the stock of a corporation, shares can also represent ownership of other classes of financial assets, such as mutual funds.

VIDEO

RELATED TERMS
  1. Shareholder

    Any person, company or other institution that owns at least one ...
  2. American Depositary Receipt - ADR

    A negotiable certificate issued by a U.S. bank representing a ...
  3. Equity

    1. A stock or any other security representing an ownership interest. ...
  4. Blue Chip

    A nationally recognized, well-established and financially sound ...
  5. Overallotment

    An option commonly available to underwriters that allows the ...
  6. Paired Shares

    The stock of two separate companies that are under the management ...
Related Articles
  1. What Are Stocks?
    Investing

    What Are Stocks?

  2. Knowing Your Rights As A Shareholder
    Investing Basics

    Knowing Your Rights As A Shareholder

  3. Random Reinforcement: Why Most Traders ...
    Active Trading

    Random Reinforcement: Why Most Traders ...

  4. What is the doctor advisory scam?
    Investing

    What is the doctor advisory scam?

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center