Stock

In financial markets, stock is the capital raised by a corporation or joint-stock company through the issuance and distribution of shares. A person or organization that holds at least a partial share of stock is called a shareholder. The aggregate value of a corporation's issued shares is its market capitalization.
In the United Kingdom, South Africa, and Australia, the terms stock and share(s) are used the same way, but stock can also refer to completely different financial instruments such as government bonds or, less commonly, to all kinds of marketable securities.
In the plural, stocks is often used as a synonym for shares especially in the United States, but it is less commonly used that way outside of North America.

Types of stock
Common stock
Common stock, also referred to as common or ordinary shares, are, as the name implies, the most usual and commonly held form of stock in a corporation. The other type of shares that the public can hold in a corporation is known as preferred stock. Common stock that has been re-purchased by the corporation is known as treasury stock and is available for a variety of corporate uses.
Common stock typically has voting rights in corporate decision matters, though perhaps different rights from preferred stock. In order of priority in a liquidation of a corporation, the owners of common stock are near the last. Dividends paid to the stockholders must be paid to preferred shares before being paid to common stock shareholders. [1]


Preferred stock
Preferred stock, sometimes called preferred shares, have priority over common stock in the distribution of dividends and assets.
Most preferred shares provide no voting rights in corporate decision matters. However, some preferred shares have special voting rights to approve certain extraordinary events (such as the issuance of new shares, or the approval of the acquisition of the company), or to elect directors. [2]


Dual class stock
Dual class stock is shares issued for a single company with varying classes indicating different rights on voting and dividend payments. Each kind of shares has its own class of shareholders entitling different rights.

Treasury stock
Treasury stock are shares that have been bought back from public. Treasury Stock is considered issued, but not outstanding.


Golden share
Golden share is a special share giving its holder a right to veto the Board's decisions. Usually, a government owns golden shares of important enterprises that were privatized. Golden shares are mostly used in European countries.


Stock derivatives
A stock derivative is any financial claim which has a value that is dependent on the price of the underlying stock. Futures and options are the main types of derivatives on stocks. The underlying security may be a stock index or an individual firm's stock, e.g. single-stock futures.
Stock futures are contracts where the buyer, or long, takes on the obligation to buy on the contract maturity date, and the seller, or short takes on the obligation to sell. Stock index futures are generally not delivered in the usual manner, but by cash settlement.
A stock option is a class of option. Specifically, a call option is the right (not obligation) to buy stock in the future at a fixed price and a put option is the right (not obligation) to sell stock in the future at a fixed price. Thus, the value of a stock option changes in reaction to the underlying stock of which it is a derivative. The most popular method of valuing stock options is the Black Scholes model [3].
Apart from call options granted to employees, most stock options are transferable.

Stock price fluctuations
The price of a stock fluctuates fundamentally due to the theory of supply and demand. Like all commodities in the market, the price of a stock is directly proportional to the demand. However, there are many factors on the basis of which the demand for a particular stock may increase or decrease. These factors are studied using methods of fundamental analysis and technical analysis to predict the changes in the stock price. A recent study shows that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly related to the stock market value. Stock price is also changed based on the forecast for the company and whether their profits are expected to increase or decrease.