Several options exist for inventory tracking. See Admin > Configuration > Stock for details.
Common configurations are:
1. Don’t track stock
Check stock level = false Subtract stock = false Allow Checkout = true
This configuration is well suited for stores that sell virtual products, which can’t be depleted.
2. Track stock, but permit backorders
Check stock level = true Subtract stock = true Allow Checkout = true
This configuration is ideal for stores that sell products where manufacturers can fill re-orders easily and out-of-stock or discontinuation situations are unlikely.
3. Track stock, do not permit backorders
Check stock level = true Subtract stock = true Allow Checkout = false
This configuration would be a good match for stores that sell unique or limited quantity products, such as artisan produced goods.