Legal Definitions - inactive stock

Definition: Inactive stock refers to a low-volume stock that is not traded frequently.

Example: Company XYZ has issued 1,000 shares of stock, but only 50 of them are traded on a regular basis. The remaining 950 shares are considered inactive stock.

Explanation: Inactive stock is a term used to describe stocks that are not actively traded on the stock market. These stocks may have low trading volumes, which means that there are not many buyers or sellers for these stocks. Inactive stocks may be difficult to sell or buy, and their prices may be more volatile than actively traded stocks. In the example given, only 5% of the total shares issued by Company XYZ are actively traded, while the remaining 95% are considered inactive.