A schematic view of Stock Market

A Stock of a corporation is all of the shares into which ownership of the corporation is divided. shares are commonly called stocks. A single share of the stock represents a part ownership of the firm in proportion to the total number of shares. This gives authority to the stockholders i.e fraction of the company's earnings, proceeds from the liquidation of assets proportion to the amount of money each stockholder has invested. Traders also take stock tips in order to get help investing in this market. Stock can be purchased and sold by a platform known as stock exchange and these transactions are heavily secured by govt to avoid the risk of fraud and misuse and protect the capital which is invested. When new shares are issued by a company, the ownership and rights of existing shareholders are liquefied in order to return for cash to sustain or grow the business.Companies also buy back the stock , which lets investors to reprise the initial investment and capital gains from rises in stock price. Stock options, issued by many companies as part of employee compensation, do not represent ownership but represent the right to buy ownership at a future time at a specified price. Any financial instrument for which an asset is the price of equity are called as stock derivative the two main types of stock derivatives are futures and options where stock index is the underlying security futures are the contracts where stocks can be holded for long and options are those contracts in which there are two types stock call options and put options. Now comes shareholders these are those companies which have or own one or more shares or stocks of a company. Private and public companies both have shareholders. There are various means of buying a stock but the main means are through a stockbroker where they transfer the stock to the seller through their exchange known as stock exchange. There are two types of brokers a full service broker and a discount broker where a full service broker charges more amount per trade but gives more personal advice, on the other hand a discount broker is a broker gives little or nil advice but also takes less charge for that another type of broker is can be a Bank which hires wither a full service or discount broker for their services. Stock selling is another part where the buyer will buy a stock at a low price and sell it on high price but if it is not in order than it is known as short selling although a number of reasons may purposely make an an investor to sell at a loss.