1.6What is a stock?
1What is it?
A stock is a general word for ownership in a company. When people say "I invest in stocks", they mean they own parts of one or more companies.
2Why does it exist?
It lets ownership be split, bought and sold easily. Instead of a few people owning a whole company, lakhs of people can each own a small piece.
3Real-life example
"I own property" is general. "I own Flat 302 in Green Towers" is specific. "Stocks" is like "property": a general idea of owning company pieces.
4Stock market example
"Priya invests in stocks" means she owns shares of companies, say Infosys, ITC and HDFC Bank. "Infosys stock went up today" means the price of Infosys shares rose.
5Quick revision
- A stock means ownership in a company.
- People often use "stocks" for the companies they invest in.
- Stocks can be bought and sold on exchanges.
6Knowledge check
Q1. What does it mean to invest in stocks?Show answer
To buy ownership pieces (shares) of companies.
Q2. If "TCS stock fell 2%", what fell?Show answer
The market price of one TCS share.
Q3. Where are stocks bought and sold in India?Show answer
On stock exchanges, mainly NSE and BSE.
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