What is a stock?

Simple explanation

A stock (or 'share') is a small piece of ownership in a real company. Own one share, own a real (tiny) slice of that business.

Picture this

Imagine a pizza cut into a million slices. One slice is one share. Buying it makes you a part-owner of the whole pizza shop.

— Cash

Real example

If a company has issued 1,000,000 shares and you own 100 of them, you own 1/10,000th of the entire company.

Common mistake

Thinking a stock is like a lottery ticket. It isn't — it represents a real claim on a real business that produces real things.

Quick check

Takeaway

Stocks are slices of real businesses. Don't buy what you can't explain to a 12-year-old.

Related glossary terms