Difference Between Stocks and Shares

Difference Between Stocks and Shares

There are words that serve as a general name for some things, and there are other words that serve as more specific names for the same things in quote. This may be confusing to a lot of people, but it is important to be able to differentiate them for the sake of formality. In the world of investment for instance, it is often asked; “are shares and stocks the same?” Short answer: no, they are not; but both terms are often used interchangeably in most cases. Does it mean that the difference between shares and stocks is not significant enough to matter?

Before we start dealing with the more or less complex questions about this subject, let us first try to answer the more simple questions like what are stocks and shares definitions? After that, we can then go ahead to answer the question – what is the difference between stocks and shares? We’ll also show you a comparison table that demonstrate how these two terms differ.

Definitions of Stocks and Shares: Are They the Same?

No, they are not the same; although they can be used in place of each other depending on the context. Knowing the actual meaning of these terms can help you answer the question – “what’s the difference between stocks and shares?”

When a person says – “I own stock”, they are actually saying that they have invested their money in one or more companies, so they are part of the ownership of those businesses. Note that in this case, it is very likely that more than one company is involved.

On the other hand, when a person says – “I own shares”, what this means is that he or she has invested in a particular company. In this case, the investor is referring to just one company. This is by far the simplest way to answer the question – “are stocks and shares the same?”

Difference Between Shares and Stocks

From these simple stocks and shares definition, you can tell that they are not exactly the same in meaning. The difference between stocks and shares, in most cases is greatly dependent on context; whether you are referring to investments in different establishments, or just one.

Another thing that makes these two terms differ from each other is the way they are classified. When you are talking about types of stocks for instance, you are most likely referring to tech, finance, small-cap, large-cap, blue chips, growth, etc. In contrast, when you are talking about types of shares, you’re referring to common or preferred shares.

Stocks vs Shares Comparison Table

Basis of ComparisonStocksShares
Meaning Ownership of one or more companiesOwnership of just one company
Numeric valueDistinctive numberNone
Paid up valueFull paymentCan be paid for in installments

Conclusion of the Main Difference Between Stocks vs Shares

Knowing the meaning of these terms are important jargons in the financial sectors. If you are an investor, you need to know both of these terms.