Glossary
Common Stock
The ordinary ownership shares of a company, which carry voting rights and a residual claim on profits after creditors and preferred holders.
Common stock is the standard form of ownership in a corporation. Each share is an equal slice of the company: it usually carries one vote at shareholder meetings and a claim on whatever profits and assets are left after everyone ahead of it in line has been paid. When people say they "own stock" in Apple or Ford, this is almost always what they mean.
Where common stock sits in the capital structure
A company's claims are ranked. If it is wound up, secured lenders are paid first, then other creditors and bondholders, then preferred shareholders, and only then common shareholders. That last place is why common stock is called the residual claim, and why it carries the most risk and the most upside.
In a going concern the same logic works in reverse: after interest and preferred dividends are paid, every extra dollar of profit belongs to common holders, whether the board pays it out as a Dividend or reinvests it.
Rights and variations
Common shareholders typically can vote on directors and major deals, receive dividends if the board declares them (they are never guaranteed), and buy or sell their shares on an exchange. Some companies issue several classes with different votes: Alphabet's Class A shares carry one vote, its Class C shares none. The economic claim per share is usually the same; control is what differs.
Losses are limited to what you paid. A shareholder is not personally liable for the company's debts, so the worst case on a share bought for $40 is losing $40.