What Are the Basics of Stocks?

Stocks are all the stocks in which ownership of an organization is divided up. In English, the stocks are collectively referred to as “stock”. A single share of an organization’s stock represents fractional ownership in proportion to its number of outstanding shares.

The dividends are paid to the shareholders and this fraction of ownership is added to the stock prices to come up with the value of the dividend. Thus, the stocks represent profits that an organization makes from the earnings of its business operations. The value of these profits is expressed as a percentage of the total value of all the assets of the company. Most organizations use their profits to finance their growth and to make major purchases that improve their market standing in the market.

Most stocks are traded on stock exchanges that are operated by a large company with a trading floor. These large companies are usually those that trade on futures exchanges and options exchanges. In the case of small companies, they may trade on their own markets. The trading of stocks on stock exchanges depends on the policies of the company, its financial situation and the state of the economy.