Stocks & Shares

When you buy a stock, you buy a small ownership slice of a company. If the company grows, your shares become more valuable. Many companies also pay dividends — regular cash payments from profits.

Quick quiz and answers

What does owning a stock represent?

Answer: Partial ownership of the company. Stocks represent equity — actual ownership in the company that issued them.

What are dividends?

Answer: Cash payments from company profits. Dividends are a portion of profits distributed to shareholders, often quarterly.

What does "market cap" measure?

Answer: The total value of all outstanding shares. Market cap = share price × total shares outstanding. It's the company's total market value.

If a company goes bankrupt, stockholders are paid:

Answer: After bondholders and creditors. Stockholders are last in line — bondholders and creditors have priority in bankruptcy.

Practice this with $10,000 in virtual cash in Tradecraft, free paper trading with real market data.

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Educational content only, not investment advice. Tradecraft is a simulator; no real securities are bought or sold.