Difference between Share and Stock

Key Difference: Purchasing ownership of a company is known as stock. Shares are a unit of measurement, which allows the investor to purchase stock. Many times, they can be used interchangeably.

The terms share and stock are often used interchangeably in the financial market. They are often pegged to mean the same thing. However, this is not so. Albeit, these words may have a similar connotation, they have a different meaning.

Stocks and shares are heard commonly in finance and accounting, when talking about markets and trading. The term is closely related to equity. Equity, in simple terms means ownership in a company. A company may raise money for capital by equity financing, which would result in the owner issuing shares of the company to sell on the stock market.

Now, when shares are issued a portion of the company’s ownership is put on the market for sale. This ownership is known as stock. Now shares come in once a stock is determined. Shares are basically a unit of account for various financial instruments, including stock. The stock is sold in number of shares. Hence, in many places it is often used interchangeably.

However, owning stock does not have to be limited to one firm. A person can own stock or have a stock portfolio of multiple companies. While, they must state how many shares of which company they own.

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