Shares vs. Stocks: What’s the Difference?

Shares vs. Stocks: An Overview

In American English, both words are used interchangeably to refer to owning part of a public company, but there are differences. For example, you might say, “I own stocks,” to indicate that you have investments in the stock market. But if you want to be more specific, you would say, “I own 100 shares of Apple Inc. (AAPL).” As such, “stock” is the financial instrument a company issues, and a “share” is a single instance of that financial instrument. That’s why saying, “I own a share of stock,” isn’t technically redundant.

Key Takeaways

• Stocks and shares both represent ownership in a company, with “shares” typically referring to specific units of a company’s stock
• Stock is often used as a broader term to discuss market investments, while shares usually refers to a specific company’s equity units
• To start investing, you’ll need a brokerage account – but don’t worry about whether to ask for “stocks” or “shares” as brokers understand both terms
• Different types of shares (common and preferred) offer varying rights and benefits, though both represent ownership in a company

Similar Terminology

Of the two, “stocks” is the more general, generic term. It’s often used to describe a slice of ownership of one or more companies. In contrast, in common parlance, “shares” has a more specific meaning: It often refers to the ownership of a particular company.

So, if you tell your broker to buy 100 shares of Apple, that’s a specific request for a piece of one company. But if you say you want to buy “100 stocks,” that would suggest you’re looking to invest in 100 different companies.

The word “shares” refers to ownership in various types of investments beyond just companies. You can own shares of mutual funds, exchange-traded funds, real estate investment trusts, or other investment vehicles. But when someone talks about “stocks,” they’re specifically talking about ownership in companies that are bought and sold on stock exchanges.

Note

According to the Oxford English Dictionary, while “stock” emerged from the Old English word stocc meaning trunk or stem (perhaps suggesting the main body of an investment), “shares” comes from various similar European language roots, including the old Saxon skara—to hold a right to something in common.

Stocks

When investment professionals discuss stocks, they’re really talking about the companies themselves. They also group stocks into categories that tell you something about the company’s characteristics—like calling something a “tech stock” or “retail stock.”

These groupings help investors make sense of the market:

• Growth stocks: Companies expected to grow faster than average
• Value stocks: Companies that appear underpriced
• Blue chip stocks: Large, well-established companies
• Small-cap stocks: Smaller companies with room to grow
• Dividend stocks: Companies that regularly share profits with investors

Per the old joke, Great Britain and the U.S. are countries split by a common language. In British English, “shares” is more commonly used than stocks, especially when discussing individual listed companies. In American English, “stocks” is more commonly used.

However, there’s no practical difference between the two in either case.

Shares

When people talk about owning stock in a company, they’re usually referring to common stock—the most basic form of company ownership. To make things a bit confusing, these refer to shares you hold in a company. Here are the differences from other types:

Types of Shares: Common Stock

This is the most popular type of stock ownership—the default type you’re buying when you execute an order on a brokerage platform:

• Voting rights: Usually one vote per share to elect board members and vote on company policies
• Dividend potential: Can receive dividends, but they’re not guaranteed
• Risk level: Higher risk than preferred stock, but more potential for price appreciation
• Last in line: If a company goes bankrupt, common stockholders get paid last

Types of Shares: Preferred Stock

These are often considered a cross between shares and buying bonds (debt) offered by a company:

• Fixed dividends: Regular dividends that must be paid before common stockholders get anything
• Less volatility: Price typically stays more stable than common stock
• No voting rights: Usually can’t vote on company matters
• Better bankruptcy protection: Get paid before common stockholders if company goes bankrupt
• More like bonds: Behaves similar to fixed-income investments

Other Share Classes

In addition, companies sometimes create different classes of shares, typically labeled as class A, class B, etc. Think of these like different ticket categories at a concert—same show, different perks:

• Class A shares might get more voting rights
• Class B shares might have less voting power but better dividend rights
• Some classes might be reserved for company founders or executives.

Note

The choice between buying common and preferred stock often comes down to an investor’s goals—growth versus income.

Shares or Stocks?

The interchangeability of the terms stocks and shares applies mainly to American English. The two words still carry distinctions in other languages. In India, for example, as per that country’s Companies Act of 2013, a share is the smallest unit into which the company’s capital is divided, representing the ownership of the shareholders in the company, and can be only partially paid up. A stock, meanwhile, is a collection of shares of a member, converted into a single fund, that is fully paid up.

What’s the Difference Between Equities and Stocks or Shares?

In financial markets, “equities” is another term for stocks and shares, representing ownership in a company, but it’s often considered a more formal or professional term—you’ll frequently hear it used by investment professionals or in academic contexts. While “stocks” and “shares” are everyday terms that individual investors commonly use, “equities” helps distinguish ownership investments from other asset classes like bonds or real estate, which is why you might hear phrases like “equity markets” or “equity investments” when discussing the broader category of stock-based investing.

Are Shares and Stocks the Same Thing?

For all intents and purposes, yes. Both shares and stocks refer to equity ownership in corporations, and owners can be referred to as either shareholders or stockholders.

How Do I Buy Shares or Stocks?

To buy shares or stocks, you’ll need to open an account with a broker who can execute your orders on the stock exchange. You’ll also need to have enough funds in your account to cover the cost of your purchase and any fees or commissions charged by your broker.

You can then research and select the shares or stocks you want to buy and place your order through your broker’s platform. You can buy shares or stocks at the market price (a market order) or a specified price (a limit order). Once your order is filled out, you will receive a confirmation, and your shares or stocks will be held in your account.

What Is the Origin of the Word Stock in English?

The word stock comes from the Old English stocc, which means “stump, post, stake, tree trunk, or log.” It is derived from the proto-Germanic stauk-, which means “tree trunk or stalk” The word stock was used to refer to the equity instruments that represent ownership in a corporation or similar entity since the early 17th century, but the exact reason is unclear. It could be the idea of a tree’s “trunk” from which gains are an outgrowth, or it could derive from an obsolete use of the word stocc as a “money-box.”

The Bottom Line

Shares and stocks are terms often used interchangeably to refer to the instruments representing ownership in a corporation or similar entity. However, there are some subtle differences between them depending on the context, geography, and culture (e.g., “shares” is used colloquially in the U.K. while “stocks” is far more common in the U.S.)

Shares is a more specific term that can refer to the ownership of a particular company or financial instrument, while stocks is a more generic term that can refer to a slice of ownership of one or more companies or a collection of investor holdings or a portfolio.