How the Trading Floor Really Works

Equity Markets

Now, let’s focus on the equity part of the equation. As opposed to debt, which is borrowed money, equity, also called shares in a company, represents ownership in that company. A shareholder, also called an equity investor, is an owner of a portion of a company. While individuals and governments borrow money in the same way that companies do, issuing shares is exclusively done by companies and not by individuals or governments. The reason for this is that equity represents ownership, which doesn’t make sense in the context of an individual or a government. A shareholder in a company gets a return on his investment via his ownership rights in the company. When a company earns profits, the company can either pay a dividend to its ...