The terms stock market and share market are often used interchangeably. However, there are a few subtle differences between the terms that every investor needs to be aware of. Shares, in general, signify a particular company while a stock is much more broad-based and it can also involve the shares. Thus, it can be said that while the former is more specific, the latter is more extensive. For example, if you own the shares of ‘XYZ Industries,’ you cannot say that you own the stocks of that industry. But, if you own the shares of a couple of other companies along with XYZ Industries, it can be categorized as stocks that you own.
The basic differences between stocks and share market
A stock market is basically a market that deals with the selling and buying of all kinds of stocks or securities. A stock is essentially a set of shares that have been brought together as a group. When you are considering how to invest in stock market, you need to understand that one set of completely paid shares make up a stock. A stock is never expressed in numerical terms but rather always expressed in terms of monetary values. You can split it into any portion of any amount. But there is a crucial point to be kept in mind that regardless of any factor, there can always be a set of partly paid up shares that combine to make a stock. A stock must always be fully paid by you.
On the other hand, the share market, as opposed to stock market deals solely with the transactions relating to shares. The shares can be partly paid or fully paid up. In case of shares, this particular criteria does not really matter. A share is basically the interest of the holder of the share in the company that he has invested in. The rights and obligations are given to the investor in this case. It can even have the cause of liability, which means that the investment which an individual makes on a company’s shares are basically a type of liability for that company. The idea of liability and the Sensex are some of the things you must know when looking for how to invest in stock market.
Knowing the difference between the terms
There are some crucial difference between the terminologies as well. For instance, a share can be issued directly but a stock in the stock market is never issued directly. It comes either as the shares or a stock always. Besides, shares come with a nominal value but a stock never has a nominal value. Shares are usually split into equal amount by the investors but that is not something they would do with the stocks.
It is crucial for the investor to understand and know the different terms of shares and stock market so that can take the right decision regarding subscribing to securities. Any beginner venturing into the securities market is a layman and without knowing the differences, it can be very difficult for him to take a profitable step.
