In normal parlance, share and stock interchangeably when they talk about stock markets and company ownership. But it is to be highlighted that there is a subtle difference stock and share. Therefore we need to understand so that we can carefully use both the terms as and when required. But before understanding the difference between stock and share, we need to technically understand the meaning of a stock and a share.
Literal meaning of a share:
The literal meaning of a share is “ a part or a portion or a pie out of something”. So in simple words, a share is the part out of something bigger.
Literal meaning of a stock:
The literal meaning of a stock is the stack or collection of something. So in simple words, a stock is the collection of something.
Definition of Shares
A share is the smallest unit of paid up capital against which any company is formed. Shares represent the proportion of ownership in the company. A share is the smallest unit by which the ownership of anybody on any company is ascertained meaning if anyone is holding a share then he is the owner of the company by that share.
Shares are usually divided in equity shares and preference shares and these are issued :
- At par
Definition of Stocks:
The stock is a mere aggregation of shares of a company in a chunk. When the shares of a member are converted into one fund is known as stock. So when any company get listed it is changing shares into stock. From share market perspective, A stock is the collection of shares of a single company or collection of shares of multiple companies meaning if anyone is holding 34 shares of company A or if anyone is holding N number of shares of M number of companies, all such cases are termed as stocks.
You can further refer the table below to understand the detailed difference between stock and share.
|Meaning||A share is the smallest unit by which the ownership of anybody on any company is ascertained||A stock is the collection of shares of a single company or collection of shares of multiple companies|
|Is it possible for a company to make original issue?||Yes||No|
|Paid up value||Shares are either partly paid up or fully paid up||Stocks are always fully paid up|
|Numeric value||A share have a definite number known as distinctive number.||A stock does not have such number.|
|Transfer||A share can’t be transferred in fractions||Stocks can be transferred in fractions|
|Nominal Value||There is a nominal values associated with a share||There is no nominal value associated with stocks|
|Denomination||Two different shares of a company has equal value||Two different stocks of a company may or may not be having the same value.|
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(Note: The above list is for information purpose only. Avoid trading and investing based on the information given above. Before investing in stocks do due diligence).