What Are Shares?

Share means part. It means partial ownership. The term share in terms of investment also means the same. A company is issuing ownerships to the public in return of an investment in its company. The investment is exactly the price you pay to purchase a share. Thus by purchasing a share, you are investing money in the company and becoming a partial owner of it. If you sell the share, you are selling your ownership and it goes to another person. The dividends you get from a share is actually a return on your investment. The company in this way is giving you a part of its profit to you.

The sale and purchase of shares happen in a platform that you call the stock market. It is also called the secondary market. Once you place an order to buy or sell a stock, the market takes the order and buys or sells the stock from or to a person who is ready to fetch the price as quoted by you. If you don’t give any price, the transaction gets executed at the current market value of the share.

Prices of share fluctuates every moment. It happens due to demand supply formula. If the demand is more, the price rises and opposite. Demand may increase due to several factors like government policy, performance of the company, good news related to the company etc. Demand may decrease also due to negative performance or negative news flows. At present time, physical shares are not held but they are converted and kept in non physical form.Thus this is the basic information related to shares.

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