Share
A unit of ownership in a company.
Also called: stock · equity
In plain language
Owning a share means owning a fractional claim on a company’s assets and future earnings, along with whatever voting rights the share class carries.
Share price alone says nothing about whether a company is large or small. A $8 stock can be worth more in total than a $600 one — market capitalization is what determines size.
For a trader, a share is simply a divisible unit of exposure. Because most equities trade in whole shares, position sizing usually rounds down.
Why it matters
Whole-share trading means your calculated position size rarely lands on an integer. Rounding down keeps your actual risk at or below your intended risk.
Common mistakes
- Judging whether a stock is cheap by its share price rather than its valuation.
- Rounding position size up, which pushes real risk above the planned limit.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
The total market value of a company’s shares — share price times shares outstanding.
The amount of an asset you buy or sell in a single trade.
The number of shares actually available for public trading.
A cash payment distributed to shareholders out of company profits.
The short code that uniquely identifies a tradable instrument on an exchange.