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Stocks represent ownership in a company, in other words claim on the company’s assets and earnings. Stocks are also known as shares or equity. Owing shares of a company means, you own some part of the company’s asset. The more number of shares you hold increases your ownership strength on that company. Stocks are broadly divided into two types namely, common stock and preferred stocks. The stocks are traded in a place called stock exchange or share markets, here the buyer and the seller meet and arrive at a price for a stock to be traded. The price of stocks of a company varies as per the demand of the same changes in the stock market.