Equity Security

An equity security, commonly known as a stock, represents ownership in a company. When you buy an equity security, you become a shareholder and own a part of that company. This ownership can entitle you to a share of the company's profits through dividends and voting rights on certain company decisions. Equities are typically bought and sold on stock exchanges, and their prices fluctuate based on the company's performance and market conditions. Investing in equities can offer growth potential, but also comes with risks, including the possibility of losing part or all of your investment if the company performs poorly.