Stocks — a stake in a company

A share is an ownership stake in a company. Someone holding a share of Apple owns a part — a very small one — of the company, and in principle has a claim on its profits. When you trade the share through a CFD, however, you do not own the stake; you deal only in the movement of its price.

What moves a share price

• Quarterly earnings — the most important event in a share’s life, four times a year, and it moves the price violently.
• Forward guidance — what management says about the coming quarter usually matters more than the reported result itself.
• The sector — a bank share moves with rates; an energy share moves with oil.
• Company news — a new product, a lawsuit, a chief executive resigning, an acquisition.
• The broad market — on a general down day, good shares fall alongside bad ones.