Millions of people have invested in stock market shares and other policies. It can be risky, but there are usually plenty of rewards.
A Guide to Stock Market—Terms and Actions
Before investing in stocks and shares one must be clear about his/her own financial position and the goal one aims to reach.
Guide to stock market requires the complete understanding of the stock market—terms used its working and the options involved for an investor.
The word stock is synonymous with the stock markets, trading and brokering. Stocks are created when a business offers a small stake of his business to the public. The public will pay a particular sum for this small portion of the holding. The holding is the stock and the unit of it is the share. The business collects sufficient amount to start his business, and the shareholders have the risk only to the small holding they have, if the business fails. The stocks are of different types and can be of different rates.
Stocks can be bought on the stock exchange with the help of a broker, or can be purchased directly from the company. The stocks can be bought against money already owned, or it can be arranged, when a trader purchases stock against the value of those very stocks. Stocks should be purchased when their prices are low, so as to make a profit when prices rise. They can be purchased at a premium when there is speculation that the company is experiencing reasonable growth and the prices will rise further.
Selling is much the same as purchasing, except that one may have to pay the capital gains taxes. Selling can be done while anticipating furthers losses or maybe when the prices have reached a peak, and the seller wants to make a good profit.
Traders gather follow a process called bidding where the stock price changes with every bid and stops only when a bid is singled out as the highest.
The stock prices are determined by the demand and the shares offered by the company. The price is also influenced by the bidding on the exchange floor. Other factors that can influence the price are unexpected national or international news, economic forecast and certain scams and scandals.
Tips for stock Trading
• The stock market is not a suitable platform for everyone. But for the adventurous people with an open mind, it can be a thrilling journey.
• Investing in stock should be started only with the extra money in hand, after all the expenditure
• A complete record need to be maintained of the transactions for one who starts investing stocks.