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What is a stock?
A stock is a financial security that represents a portion of ownership in a company. Retail investors can buy shares from companies that are listed on a stock exchange.
The company will apply to list on an stock exchange, for example the London Stock Exchange (LSE) or the New York Stock Exchange (NYSE), so that their shares can be bought and sold by anyone.
When it list on the stock exchange, it’s usually by way of an initial public offering (IPO). At this point its share price will be fixed, however from the first day of trading onwards, it will fluctuate according to market conditions.
When you buy shares in a company, you’ll become a shareholder and part owner of the company. As an investor, you’ll receive dividend payments if the company grants them and have voting rights.
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