What Are the Types of Stocks?

Stocks are all the stocks held by an organization in which ownership of an entire company is under an agreement. In American English, all the stocks are collectively referred to as “stock.” A single share of this stock represents fractional ownership in proportion to its total number of outstanding shares. The value of any particular share is usually fixed at the time of purchase; however, it can be increased or decreased, depending on the general stock market conditions.

As a shareholder, you have a right (but no obligation) to participate in the determination of a company’s share price. You are entitled to your vote at Board meetings and other regularly scheduled meetings, but cannot participate in shareholder meetings or when company directors are holding annual meetings. There are many different types of stocks, including common stock, preferred stock, bridge stock, issuer stock, reverse stock, treasury stock, and new stock. One type of stock is “follow-on” stock, which means that the purchaser receives shares of stock immediately upon the sale or purchase of shares by a previous owner.

Some companies issue stock as part of initial public offerings, or IPOs. Other companies issue shares to employees immediately after they become employees, sometimes known as employee stock options. These are often the most highly traded and potentially the most lucrative types of stocks. Shares of this type are usually traded on major exchanges such as the New York Stock Exchange, the NASDAQ, and the London Stock Exchange.