You might have noticed that the words stock and shares are often used interchangeably when we discuss investments and trading in the stock market. They have similar meanings, but there are a few subtle differences we’ll be looking at here.
Find out more about the terminology of stock vs shares and what practical differences exist, if any. We’ll be looking at examples, regional usage and the buying process of stocks and shares.
Stock and Shares - Plain Meanings in Markets
The first part of the shares vs stock we’re looking at is the definition of stock. This is a broad term that is often used to explain overall ownership of a company. You might use stock to mention whether you own in a specific company without saying how much, or it could refer to your overall stock market portfolio.
What are shares in stock market language? These are the countable units of your stock ownership. They refer to the amount you own of a particular company’s stock. So, you might mention that you own ten Vodafone shares or 20 shares in Barclays if you want to be exact.
It can seem more confusing because some platforms, websites and headlines mix the words when they talk about owning stock or buying shares. When you’re looking to get started, it makes sense to simply focus on the units you want to buy rather than worry about the names used to refer to them.
Difference Between Stock and Shares
When we look at the key shares and stock difference, it boils down to the fact that shares are countable units of stock ownership. In practice, this means that issues like dividends, voting rights and rights issues are all determined by the number of individual shares held.
When carrying out trades or purchases on a trading platform, you’ll be dealing with a certain number of shares. This is how the settlement is made, even though some pages might refer to stock. You need to set up your purchases and sales in terms of the number of shares involved.
The difference between shares and stock isn’t something that affects your transactions otherwise. Some people like to think of the stock of a company as being like a whole cake, while each share is an individual slice.
But it really comes down to personal preference and what word you feel more comfortable using.
For example, you could use the word “stock” when talking about market sectors like tech stock and blue-chip stock. You shouldn’t have any problem getting understood if you talk about tech shares and blue-chip shares.
However, in this case, it gives the idea that you’re referring to specific shares rather than the overall sector. We can also consider the fact that you might use either term when you want to refer to the amount you hold.
If you want to talk about how you have invested in a certain company without mentioning the exact amounts, you could say you bought some Amazon stock or Apple stock. To say exactly how much you have, this would be the number of Amazon shares or Apple shares.
Equities is another word with a similar meaning that can confuse. It’s commonly used to mention the percentage of a company’s stock that is being referred to. A 10% equity stake in Tesco means that you own 10% of the total shares, so this could also be expressed by the number of shares if you prefer.
Buying Stock CFDs on ActivTrades - A Simple Walkthrough
A contract for difference (CFD) is a financial derivative product that allows you to predict whether a company’s stock price will rise or fall, without buying any shares. You make a profit if the price moves in the direction you expect, but you lose if it goes in the opposite direction.
Leverage is often used when trading stock CFDs, which amplifies the price movements. Be aware that leverage increases the risk of loss. CFDs can be based on shares or other assets, including commodities and bonds.
If you’re looking at different ways of buying shares of stock, this approach is one of several you can use on ActivTrades. Choose from a wide range of shares CFDs as well as the option of making a stock and shares investment through exchange-traded funds (ETFs) and individual share purchases.
To get started, you need to register as a new user. This gives you the option of using a demo account until you feel completely comfortable. Once you want to add real funds, you can choose from a variety of banking methods that let you get started without any delays.
Enter the stock or shares section of the platform. There’s no difference between these words for the purpose of buying or trading on the site. You can then choose from the platforms MetaTrader 4, MetaTrader 5, TradingView, and ActivTrader.
If you want to buy shares, you just need to choose the company and how much you want to buy. The different platforms mentioned above all offer tools like charts to help you decide what moves to make. You can also look at different kinds of orders, such as market orders and limit orders.
When you want to trade stocks or shares, you need to choose the instrument to use and then decide on areas such as leverage and margin. Stop-loss and take-profit limits are recommended for making sure that you protect your trade from any sudden and unexpected price swings.
US vs UK Usage
You may see that stock & shares are used differently depending on the region that the speaker or writing comes from. In an increasingly global economy, it’s likely that you'll come across varying uses of these words, some of which might not meet the exact definitions we’ve looked at.
- In the UK, shares is the word most often used.
- In the US, there’s a preference for stock when referring to this market.
- The preference for stocks or shares varies in other countries. In Australia and India, they typically follow the British usage and refer to shares more than stock.
- Another usage you’ll find in the UK is where the words are mixed together. This can be seen in instances such as a Stocks & Shares ISA. While this name might not seem to make sense at first, the use of stock and shares in the title means that it covers the overall concept of investing in the stock market as well as specific shares.
It’s clear that the meaning varies according to where the person writing it is from, and you’re probably going to come across different usages as you explore shares and stocks online. Don’t let this confuse you, as there’s no real difference in the meaning.
The best idea is to put your focus on the share count and rights rather than paying too much attention to the exact words used. Whether you’re looking at shares of stock or stock market shares, it’s really the same thing.
If you use international sites to look for information, the differing uses of stocks and shares can be confusing at first. Many countries use the UK-style approach we mentioned earlier, where the term most commonly used is shares, but anyone influenced by the American style might prefer stock.
By understanding the key differences we’ve looked at here, you won’t run into any problems in seeing what is meant.
Stock and Shares - FAQs
Does It Matter If I Say Stocks or Shares?
No. For practical purposes, you can use either of their words since they’re used interchangeably by a lot of people. When you’re buying stocks and shares, there’s no risk of buying the wrong asset if you use either of these words.
Are Equities the Same as Stock & Shares?
Equities is a more formal term that is often used in a professional setting. It means the same, although it’s usually used to cover a broader sense of the overall market and to differentiate it from other assets like bonds and commodities.
What Are Fractional Shares of a Stock?
This is a term that’s most commonly seen when talking about expensive stocks, where an individual share might be more expensive than some people are happy to pay. In that case, a fractional share allows the investor to buy part of a single share to gain a certain level of exposure.
What Is Preferred Stock?
This is a type of stock that generally doesn’t grow in value as much as standard stock, but that offers dividend payments at regular periods. The term preferred shares is also sometimes used to explain how this stock is divided into smaller units.
Do Stocks and Shares Have Equal Voting Rights?
The voting rights are based on the class of shares that you own. Common stock is generally awarded one vote per share, while preferred stock doesn’t have any voting rights.
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