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Stocks and shares

What you own when you buy a share, and why prices move every day.

4 min read Last updated 3 Nov 2026
A pie with one slice pulled out and a small certificate, with a zigzag line behind, to show a share in a company.

The short version

A share is a small slice of ownership in a company. If you buy one, you own a tiny part of it and share in any profits paid out. Share prices move as buyers and sellers change their minds about what the company will earn in the future.

I always thought a share price rose when a company had a good year.

Often it has already gone up before the good news.

The price reflects what people expect, not only what has happened.

A slice of a company

A company can raise money by dividing itself into many equal parts, called shares, and selling them. Whoever holds a share owns that fraction of the company. It gives the right to vote on some matters, and a right to any profits the company chooses to share out.

Those payments are called dividends. Not every company pays them. Some keep the profits to grow the business instead.

Shares, bonds and funds

Share

You own a piece

Its value rises and falls with the company, and there is no promise of return.

Bond

You lend money

A company or government pays you interest and promises to repay the loan on a set date.

Fund

A basket

One purchase that spreads your money across many shares or bonds, run by a manager.

Why the price moves

A share's price is whatever buyers and sellers agree on at that moment. If more people want to buy than sell, the price rises. If more want to sell, it falls.

What drives them is mostly what they think the company will earn in future. New products, rival firms, interest rates, and the wider economy all change that picture. The price changes within seconds of news.

A company's share price rises when it reports good results.

The price already includes what people expected. Good results that are worse than hoped can send it down, and a poor result that is less bad than feared can lift it.

100

The FTSE 100 is the list of the 100 biggest companies on the London Stock Exchange by value. Its rise or fall is what a news report means by "the market is up".

Risk and return

Shares can rise a lot over time, but they can also fall, and you can lose some or all of what you put in. Over long periods shares have usually beaten cash, but not every year and not for every company.

Index funds spread the risk across many companies at once. Where prices are agreed is the stock exchange.

What ownership can include

Shareholders may be able to vote at company meetings and may receive a dividend if the company declares one. The exact rights depend on the share class: some shares have different voting or dividend rights, and some have none. Owning a share does not mean you can take a matching piece of the company's equipment or cash. It is a legal ownership interest in the company, with rights set out in its rules and the type of share you hold.

Note: this explains how it works in general. It is not advice for your situation. For a decision about your money, check an official source or ask a qualified professional. The value of investments can fall as well as rise, and you may get back less than you put in.

Sources: London Stock Exchange, how shares work; Financial Conduct Authority and MoneyHelper, guides to investing. Figures are for the UK.

Key takeaways

  • A share is a small slice of a company.
  • Dividends are a share of profits, when paid.
  • Prices move as buyers and sellers change their minds.
  • The price reflects expectations, not only results.
  • Shares can fall as well as rise.

Now you know.

A share is ownership.

Prices follow expectations.

The value can fall.

Last reviewed 3 Nov 2026

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