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. Blue Chip

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

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

    The stock of two separate companies that are under the management ...
  5. Penny Stock

    A stock that trades at a relatively low price and market capitalization, ...
  6. Stock

    A type of security that signifies ownership in a corporation ...
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. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an ...
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center