are stocks considered equities? Quick guide

Are stocks considered equities? Yes — in finance, stocks are the most common type of equity, representing ownership in a company. This guide explains definitions, types, accounting, trading, and ho...

2025-12-24 16:00:00

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Are stocks considered equities?

Are stocks considered equities? Yes — in finance, stocks are a primary form of equity, representing ownership stakes in companies. This article answers the question directly, explains the difference in usage between the terms, outlines types of equity securities, and describes practical, accounting, legal, and modern tokenized-asset implications. You will also find recent market context and how platforms such as Bitget are expanding access to tokenized equities and TradFi instruments.

In short: are stocks considered equities? Yes. The remainder of this guide explains what “equity” means, how “stock” or “share” fits inside that concept, and how investors, accountants, and regulators treat each term.

Definitions

Equity

Equity is the ownership interest in an asset or a business. In accounting terms, equity equals assets minus liabilities and represents the residual claim of owners after creditors are paid.

In market usage, the plural term “equities” is commonly used as a near-synonym for publicly traded stocks — though equity can also describe private ownership, retained earnings, and other components of shareholder capital.

Stock / Share

A stock (or share) is a unit of ownership in a corporation. Each share represents a proportionate claim on the company’s assets and earnings and typically confers specific rights, such as voting or dividend entitlements.

When people ask “are stocks considered equities,” they usually mean whether shares in public companies are part of the broader equity category — and they are.

Stocks vs. Equities — usage and nuance

In everyday conversation, people often use “stocks” and “equities” interchangeably. But there are useful nuances:

Equity is the broad concept of ownership. It can refer to a company’s entire ownership structure (including retained earnings and contributed capital) or to ownership in noncorporate assets.
Stock (or share) usually refers to a specific tradable security that represents equity ownership in a corporation.

Institutional users and financial professionals will sometimes favor one term over the other. For example, a portfolio manager might say “equities” when discussing asset allocation across markets, while a broker or investor might say “stocks” when referring to individual securities.

Because the distinction is subtle, a simple answer to “are stocks considered equities” is that stocks are a subset of the equity concept — and most of the time the words refer to the same asset-class exposure.

Types of equity securities

Common stock

Common stock is the most widely held equity form. Key features include:

Voting rights: Common shareholders generally have the right to vote on corporate matters such as board elections.
Variable dividends: Dividends on common stock are paid at the board’s discretion and can change over time.
Capital appreciation: Common stockholders benefit from price increases but also bear downside risk.
Subordinate claim: In liquidation, common shareholders are paid after creditors and preferred shareholders.

Preferred stock

Preferred stock combines features of equity and debt. Typical characteristics:

Fixed or stated dividends: Preferred shares often pay regular dividends at a stated rate.
Priority in liquidation: Preferred shareholders are paid before common shareholders if the company winds down.
Limited voting rights: Preferred holders usually have little or no voting power compared with common holders.
Hybrid status: Because preferred stock behaves like a fixed-income instrument in some respects, it is classified as equity on the balance sheet but treated differently by investors.

Other equity-related items

Beyond common and preferred stock, several related items appear in corporate capital structures:

Treasury stock: Shares repurchased by the issuing company, reducing outstanding shares and shareholders’ equity.
Additional paid-in capital: Amounts paid by investors above the par value of issued shares.
Retained earnings: Cumulative, undistributed profits that increase shareholder equity.
Convertible preferred shares: Preferred stock that can convert into common shares under specific conditions, blending debt-like stability with equity upside.

These instruments are all part of the broader equity picture, reinforcing that “stocks” (common and preferred) are core examples of equities.

Equities as an asset class

Equities form one of the primary asset classes, distinct from fixed income (bonds) and cash. Key ways investors categorize equities include:

Market capitalization: large-cap, mid-cap, small-cap.
Sector: technology, healthcare, financials, consumer staples, etc.
Geography: domestic, international, emerging markets.
Style: growth vs. value vs. dividend-focused.

When answering “are stocks considered equities,” remember that most equity asset-class exposure for retail and institutional investors is delivered through stocks, ETFs, and mutual funds that hold those stocks.

How stocks represent ownership and rights

Owning stocks generally confers practical rights:

Voting rights: Common stockholders typically vote on directors and major corporate actions.
Dividends: Shareholders are eligible for dividends if and when the board declares them.
Residual claim: Shareholders have a claim on company assets after creditors and preferred shareholders, especially relevant in insolvency or liquidation.

The exact rights depend on the class of stock and any contractual terms associated with special share classes.

Stocks vs. debt securities (bonds)

Equities and debt differ fundamentally:

Relationship: Stocks create an owner relationship; bonds create a creditor relationship.
Payment priority: Bondholders are paid before shareholders in bankruptcy.
Returns: Bonds generally provide fixed interest payments; stocks provide variable returns through price changes and discretionary dividends.
Risk/return: Stocks are typically higher risk and higher expected return over the long term compared with bonds.

These differences explain why investors use bonds and equities differently within diversified portfolios.

Listed (public) stocks vs. private equity

Publicly listed stocks trade on exchanges or OTC venues, providing transparent pricing and liquidity.

Private equity refers to ownership stakes in companies that are not publicly traded. These stakes are often held by private equity firms, venture capital funds, or direct investors.

Key contrasts:

Liquidity: Public stocks are generally liquid; private equity is illiquid and often requires multi-year holding periods.
Valuation: Public stocks have market prices set continuously; private equity valuations are periodic and model-based.
Accessibility: Public stocks are widely accessible to retail investors; private equity usually requires accredited or institutional status.

If you wonder “are stocks considered equities” in the private sense, the answer remains yes: privately held shares are equity too, but they are not public stocks.

Investment and trading considerations

When deciding how to gain equity exposure, investors should consider:

Volatility: Stocks can show significant short-term price swings.
Diversification: Holding many stocks or using ETFs/mutual funds reduces single-company risk.
Trading vs. long-term investing: Traders focus on short-term price movements; investors focus on fundamentals and long-term returns.
Leverage: Trading on margin increases risk and potential losses.
Tax implications: Capital gains, qualified dividends, and tax treatment vary by jurisdiction and holding period.

If you want convenient exposure to the equities asset class without picking individual stocks, exchange-traded funds (ETFs) and equity mutual funds are common choices. On platforms that support tokenized equities and RWAs, such exposure can also be obtained via tokenized products — subject to regulatory and operational differences.

When using web3 wallets or on-chain tools, consider secure custody. For readers evaluating wallet options, Bitget Wallet is recommended as a user-friendly, secure option that integrates with Bitget’s broader trading ecosystem.

Accounting and legal treatment

On the balance sheet, equity appears under “shareholders’ equity” or “owners’ equity.” The basic formula is:

Shareholders’ equity = Total assets − Total liabilities

Components of shareholders’ equity typically include contributed capital (common and preferred), additional paid-in capital, retained earnings, and treasury stock adjustments.

In liquidation, legal priority determines payment order: secured creditors, unsecured creditors, preferred shareholders, and finally common shareholders — illustrating the residual nature of equity claims.

Stocks, equities and cryptocurrencies — how they differ

Most cryptocurrencies and native blockchain tokens are not equities. Key distinctions:

Economic rights: Stocks convey ownership and often voting rights; most tokens convey utility or protocol rights rather than ownership.
Regulation: Equities are regulated as securities in many jurisdictions; cryptocurrencies may be treated differently unless they meet securities tests.
Cash flows: Stocks can provide dividends and residual claims; tokens typically do not entitle holders to corporate profits.

Exceptions exist: security tokens and tokenized equities can represent equity-like rights on-chain. These tokenized securities are subject to securities laws and regulatory requirements.

As of December 31, 2025, according to Bitget’s 2025 annual review and Block Scholes’ industry reporting, tokenized stocks and ETFs saw rapid adoption on platforms pursuing a Universal Exchange (UEX) model. Bitget’s expansion into tokenized traditional assets enabled eligible users outside the U.S. to trade over 100 tokenized stocks and ETFs following a partnership with Ondo Finance, illustrating how regulated tokenized equities can bridge TradFi and crypto markets.

Common misconceptions / Frequently asked questions

Q: Are all equities stocks?

A: Mostly yes in the context of public company ownership. Equity is broader than stocks and includes private ownership, retained earnings, and other shareholder capital items. But when people discuss market exposure, “equities” generally refers to stocks.

Q: Is owning an ETF owning equities?

A: When you own an equity ETF, you own shares of a fund that holds equities. You have exposure to the equity asset class, but you do not directly own each underlying company’s shares.

Q: Does a token equal a stock?

A: Usually not. Most tokens are not stocks. Some tokens are structured as security tokens that legally represent equity-like ownership; those tokens are typically governed by securities regulation and require specific issuer disclosures and compliance.

Q: Are stocks considered equities when tokenized?

A: If a token legally represents a share or is explicitly structured as a tokenized equity/security, then yes — the token embodies equity rights. If a token is a synthetic or derivative asset, its economic exposure may differ from direct equity ownership.

Q: Are stocks considered equities in accounting statements?

A: Yes. Stocks issued by a corporation are part of shareholders’ equity on the company’s balance sheet.

Use cases and examples

Buying common shares of a public company: You gain voting rights (typically), dividend eligibility (if declared), and price appreciation exposure. This is a direct example that answers “are stocks considered equities” in the affirmative.
Preferred share dividend priority: If a company distributes dividends, preferred shares often receive payment before common shares, illustrating equity subtypes.
ETF exposure to equities: Purchasing an equity ETF gives diversified exposure to the equities asset class without selecting individual stocks.
Tokenized stock trading (UEX context): On platforms that support tokenized equities, eligible users can acquire tokens that represent tradable, regulated slices of traditional stocks or ETFs. As of December 31, 2025, Bitget’s tokenized-stock offering achieved notable market activity, reflecting institutional and retail interest in tokenized equities.

Market context and recent developments (timely data)

As of December 31, 2025, according to Bitget’s 2025 annual review and the 2025 Crypto Derivatives Market Annual Report by CoinGlass, Bitget recorded total derivatives trading volume of $8.17 trillion for the year, averaging roughly $25.20 billion in daily trades.

Institutional adoption grew markedly during 2025 on Bitget: internal data cited in the review showed institutional share of spot trading rose from 39.4% in January to 82% by December, while institutional market-maker share of futures volume increased from 3% to 60% over the same period.

A central pillar of Bitget’s 2025 strategy was expanding Real-World Assets (RWAs) and tokenized equities. Following a partnership with Ondo Finance, Bitget enabled eligible users outside the U.S. to trade over 100 tokenized stocks and ETFs. By late 2025, Bitget captured a large share of trading activity in tokenized stock tokens stemming from that partnership, with cumulative tokenized-stock futures trading exceeding $15 billion.

Independent research from Block Scholes documented broader market trends: tokenized equities and ETFs moved from niche experiments toward mainstream liquidity across 2025, with improving spreads and growing institutional participation. This evolution supports platforms pursuing a Universal Exchange (UEX) model that integrates crypto, stablecoins, and tokenized traditional assets into a single trading experience.

These developments illustrate real-world ways in which questions like “are stocks considered equities” are becoming operationally relevant on-chain: tokenized equities can represent legally enforceable equity rights while also bringing new trading hours, settlement models, and custody considerations.

Risk and regulatory considerations

Legal classification: Tokenized equities are typically subject to securities laws. Legal classification determines disclosure, custody, and who may trade the instrument.
Price behavior: Tokenized stocks may track their off-chain counterparts closely during regular market hours but can deviate overnight or during mint/redemption pauses.
Custody and counterparty risk: Holding tokenized equity depends on issuer controls, custodial arrangements, and platform safeguards.

Platforms expanding tokenized equity access — including Bitget under its UEX strategy — emphasize regulatory compliance and technical risk management as core priorities. As of December 31, 2025, Bitget stated that 2026 would focus on UEX, AI, and compliance to deepen TradFi access while refining liquidity and regulatory engagement.

Accounting snapshot: where equity sits on the balance sheet

On a corporate balance sheet, shareholders’ equity includes:

Common stock (par value)
Preferred stock (if issued)
Additional paid-in capital
Retained earnings
Treasury stock (subtracted)

The simple accounting identity is assets minus liabilities equals shareholders’ equity. This formula underscores why equity represents the owners’ residual claim on a firm’s net assets.

In liquidation, the seniority order — creditors then preferred shareholders then common shareholders — clarifies why equity is risk-bearing capital rather than contractual debt.

Practical steps for investors who want equity exposure

Clarify your objective: Do you want individual-stock upside, dividend income, or broad market exposure?
Choose the vehicle: Direct common shares, preferred shares, ETFs, mutual funds, or tokenized equities (where regulated and available).
Consider diversification: Holding many stocks or an ETF reduces single-company risk.
Understand trading venue and custody: For on-chain tokenized equities, evaluate platform security, custody model, and regulatory compliance. Bitget offers a unified environment for trading tokenized assets and recommends secure custody through Bitget Wallet for users entering tokenized TradFi markets.
Factor taxes and costs into your plan: Transaction costs, platform fees, and tax treatment vary by jurisdiction and product type.

This checklist helps translate the conceptual question “are stocks considered equities” into concrete investor decisions.

Stocks, tokenization, and the Universal Exchange (UEX) model

Tokenization brings traditional equity economics to chain-native formats. The UEX model pursued by Bitget integrates crypto, stablecoins, and tokenized equities into a single platform experience.

Benefits that motivated market participants in 2025 included:

24/7 market access: On-chain tokenized equities can trade outside regular exchange hours, subject to regulatory constraints around settlement and mint/redemption.
Integrated liquidity: Funding equity exposure directly with digital assets such as stablecoins reduces frictions between crypto and TradFi accounts.
Institutional on-chain activity: As institutions increase on-chain participation, centralized platforms that support custody, KYC, and regulated tokenized products can serve as gateways to tokenized equities.

As of December 31, 2025, Bitget reported meaningful traction in these areas and the firm emphasized regulatory and technical refinement as priorities for 2026.

Common misconceptions revisited

Misconception: All tokens are equities.
- Reality: Most tokens are not equities. Only tokens structured and regulated as securities are equity-like.
Misconception: Tokenized stocks are identical to off-chain stocks.
- Reality: Tokenized stocks can closely track off-chain prices during core hours, but structural differences (24/7 trading, mint/redemption mechanics, custody) can create divergence outside core sessions.
Misconception: Owning an ETF means you directly own every stock.
- Reality: ETF holders own fund shares which grant economic exposure to the portfolio; the fund holds the underlying stocks or derivatives.

These points help readers avoid oversimplifying the relationship between stocks and equities.

Final notes and practical next steps

Are stocks considered equities? Reiterating: yes — stocks are the most common, tradable form of equity. The practical difference between the words is mainly one of scope and context: equity is the broader concept; stock/share is the specific security.

If you are exploring equity exposure through traditional markets or the growing tokenized-equity ecosystem, consider platform selection, custody security, diversification, and regulatory status.

Explore more on Bitget’s product pages and educational resources to learn about trading equities, tokenized assets, and related custody options. For on-chain custody, Bitget Wallet is a recommended starting point to bridge digital asset management and trading within Bitget’s Universal Exchange ecosystem.

Risk warning: Digital asset prices and tokenized product prices may be volatile and subject to regulatory restrictions. This article is informational only and does not constitute financial advice. Verify legal and tax treatment for your jurisdiction and consult qualified professionals for personal guidance.

As of December 31, 2025, reporting and figures above reference Bitget’s 2025 annual review, the 2025 Crypto Derivatives Market Annual Report by CoinGlass, and industry analysis from Block Scholes and Ondo Finance.

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.