If you are a beginner who wants to start trading, there might be times you get confused between the different financial instruments and the financial market jargon. There are multiple routes to invest and grow your wealth these days and the correct knowledge about all the available options is important. If you want to start investing in stocks or share market, but are confused between the two, then you have come to the right place.
What are shares and the share market?
Shares are units of ownership and valuation of a company that is traded in the share market. When investors buy shares of a company, they become ‘shareholders’ of that company. Having shares in a company gives the investors a share of the profits gained, the loss incurred, and the voting rights. The number of shares you get in a company depends on the amount of money you have invested. The share market is the place where companies sell their shares for share market investment.
What are stocks and the stock market?
Stocks are a more generic term compared to shares. Stocks refer to ownership over a companies’ dividends, shares, securities or bonds, but these stocks can be a bundle of multiple companies. These stocks are traded in the stock market and can include securities, equities and other bonds of the companies.
If you want to know about stock market India, the BSE (Bombay Stock Exchange), NSE (National Stock Exchange), Calcutta Stock Exchange, Vadodara Stock Exchange are some of the leading stock exchanges.
Similarity between these two terms
Many times, especially in the American culture, ‘stocks’ and ‘shares’ are used interchangeably. They both talk about a slice of a company’s ownership and are bought and sold in a market. Both stocks and shares can be calculated, predicted, and analyzed using an option calculator since both are asset types in financial trading. Companies get onto the stock or share market to raise funds for themselves and promote their company growth. On the other hand, investors get into these markets to diversify their portfolios, explore different trading options, earn dividends and grow their wealth.
Difference between the stock and share markets
Stock is a generic concept, however, share on the other hand is a specific concept. Shares usually talk about a specific company, stocks can include fractional shares of a bundle of companies. Share markets deal with mutual funds and exchange traded funds, whereas stock markets deal with equities, bonds and government securities.
Now, when you open your online trading app next time, you will know the difference between the stock market and the share market. As an investor, it is important to research extensively and gain knowledge about different vehicles of the financial world. Apart from this, one must always be vigilant about the trading platform or online app that one uses to get one’s investment journey started.
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