There are different types of stocks based on ownership, market capitalization, dividend payments, risk, and price trends. Stocks based on ownership- Common stocks, preference stocks, Hybrid stocks, Stocks with embedded-derivative options. Common stocks and preference shares differ from each other on the parameter of priority. Preference stocks get a priority on the distribution of surplus on the occasion of distribution of profits and dividends. Hybrid Stocks are also known as convertible preferred shares. These are the preference shares that carry an option to be converted into common stocks at a specified time. The stocks embedded with a derivative option carry both callable and putable options. Under this option, the company can call or buy and the investor can put or sell the shares. These are not very commonly available. Stocks based on market capitalization- The classification of these depend on the market value of the total shareholding of a company. Market capitalization is the share price multiplied by the number of shares. These stocks are large cap stocks, mid cap stocks, and small cap stocks. Large cap stocks are leading companies like Reliance, TATA. These are often blue-chip stocks. Mid cap stocks are companies with a market capitalization in the range of Rs. 250 crore and Rs. 4,000 crore. Small cap stocks are companies with a market capitalization of less than Rs 250 crores. Stocks based on dividend payments- These are income stocks and growth stocks. The income stocks pay a dividend higher than their share price. These are also known as dividend-yield or dog stocks. These stocks are preferred by investors who are seeking a regular income. On the other hand, growth stocks usually provide lower dividends. These stocks prefer reinvesting their income into their operation to grow the company. With the growth of the company, its share price also grows. Stocks based on risk- These stocks are relatively riskier than others due to frequent fluctuations in the share price. Blue-chip stocks are well-established companies that have lower liabilities and higher growth potential. Beta stocks are stocks with a higher risk. A higher beta means higher volatility. A beta greater than 1 is considered riskier than other stocks.