The terms STOCK and STOCK CERTIFICATE both are about ownership in a specific corporation. Stock itself represents a piece of the corporation's assets and earning and is purchased in units called shares. Generally stock shares are bought in lots of 100 at a time.
A Stock Certificate is the actual document that details the number of shares a shareholder owns. Each stock share has the potential to increase or decrease in value based on the corporation's assets and earnings at any given time. These days, purchasers are not mailed their certificates, like in the past. Almost all of the stock trading business in transacted electronically. Stock shares can be bought and sold with the click of a button.
One of the variables in purchasing stock is that the "assets" are not only real, fixed items like buildings, inventory, and accounts receivable. The perceived value in a company can make a huge difference in the demand, thus the price and perceived asset value of the company's stock.
An example of perceived value is oil. When the world becomes fearful that oil will be scarce, the stock market perceives that oil will run out. Thus, the demand increases for the limited resource and price goes up - all on perceived value.
Then, when the news tell us that more oil has been "found", the market relaxes a bit and, thinking that more oil is out there (the finite amount of oil in the world has not changed, has it?), demand goes down, and prices go down. The stock market represents the fear and greed of the world, not a rational, consistent, or logical business investment. It is important to understand this mentality when getting involved in trading.
While buying stock has several advantages over trading options, futures, etc., it is not without risk. A big advantage, however, in buying shares of stock is that the shares do not expire.
Are you interested in more terms and snippets of beginner information?
Chris Best has been trading since 2006 and is currently writing a book about stock trading for beginners. Before starting her live trading career she read a lot and practiced with virtual platforms. She admits "There is nothing like the real thing".
Chris continues her education while trading for real. She has certificates of completion in Stock Trading, Options Trading, and Basic Futures, meaning that she studied the basics and passed some tests. Contact her through her website [http://HelpingWomenTrade.com/13746] Chris has a M.A. in Communications and B.A. in Education. To success!
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