What are Stocks?

Stocks are publicly-listed companies on the share market or stock exchange. Companies can go public by launching an initial public offering (IPO).

Stocks are publicly-listed companies on the share market or stock exchange. They are categorised into industry sectors, based on what the company does. For example, banks are categorised into ‘Financials’ and technology companies are listed under ‘Information Technology’.

By listing on the stock exchange, companies allow the public to buy shares in the business. A share is a unit of ownership, giving shareholders equity in the company. Therefore, as a shareholder you are entitled to a portion of the profits the company makes, which is known and paid as a dividend. If the company value decreases on the other hand, shareholders may not receive dividends and potentially lose money. Shares are bought and sold on stock exchanges around the world and can be done through a broker or an online share-trading platform. Shares can only be purchased and sold through the stock exchange’s trading hours. Shareholders have rights to receive company information and vote at annual general meetings (AGMs). You can start buying company shares for as little as $500.

Companies list on a stock exchange through an initial public offering (IPO) where it sells shares to investors and the public at a set price, before it begins trading. An IPO usually requires a minimum number of shares to be purchased. Funds raised from the IPO are then reinvested. Companies choose to list on a stock exchange to raise capital and fund future growth, while heightening its profile with investors and the public.

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Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.