An example of a subdomain is http://stock.domain.com.
To explain it in a simple language, a subdomain is a subfolder within the public_http level of your account that has it’s own cgi-bin directory. The ’stock’ example above creates a new top-level folder called timber, with a cgi-bin sub-folder. Upload your files for the subdomain to this location, including a separate home file (such as index.html or index.php).
When you create a subdomain with us stock.domain.com would point to the stock folder in your public_html directory. These are not forwarders, but true Apache subdomains.

