Understanding stocks and shares is not a difficult job if you don't get too overly technical and just look for the stock market basics. Stocks are nothing more than purchasing a little piece of a business. When owners of a business need to raise money, they have several options. The first is the normal one, borrow money from a lending institution. The second one is to issue bonds. A bond pays a specific interest rate to those that purchase them. There's a date when it comes due and the company pays the loan in full. The third option is to go public with stock.
When a company goes public, it issues stock. The company creates a specific amount of shares, we'll keep it simple and use the number 1,000,000. Everyone that buys a share of stock from the company when they do the initial public offering (IPO) just purchased 1/1,000,000 of the company. Even though it sells many shares, it keeps some stock back for itself. Understanding stocks and shares is a matter of knowing that a single stock is one share of all those that the company issued.
Understanding stocks and shares also involves their purchase and sale. You can buy shares directly through many companies on a systematic basis. This saves brokerage fees. If you sell shares, you also can do that through the company direct. The problem when you do both is that you never know what price you'll get until the close of the stock market since share trading doesn't take place until then when you go direct.
Most people get involved in trading stock as a form of investing and want to make the maximum return on their money. You need a brokerage account to do that. You don't need a broker if you have some understanding of stocks and shares. To provide you with that information, here's a some stock market for beginners basics.
1. Select the stock you want to purchase. After you open a brokerage account, get a basic understanding of the type of stock, and shares you want, be on the look out for three or four companies you know and whose products you really like.
2. Check the background of the companies and their management. Read every article you can.
3. Find the symbol of the companies and track the stock. You'll probably start to see a pattern after a few weeks.
4. Decide the type of investor you want to become. It's not enough to simply have an understanding of stocks and shares, you need to know how you're going to invest. Decide whether you want to buy and hold. This type of investing comes when you believe that over time, the company will grow. You can also buy and trade rapidly. This is day trading and is used to make money on the patterns of price fluctuations.
Understanding stocks and shares is time consuming at first if you jump in with both feet, but once you follow stocks for a few weeks, you'll start to see how simple it really is.
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Article Source: http://EzineArticles.com/?expert=Banjo_Smyth
Friday, 11 February 2011
Saturday, 27 March 2010
How to Make Money By Trading Shares
Trading in shares of different companies presents a unique opportunity to make money within a short time. But there are some important points, which have to be considered before start trading in these shares.
1. Research about the company before buying a share
A thorough research is required to be carried out before you actually buy shares of a particular company. This research should be based on such aspects as Reputation of the company, Market share, Financial Results etc. For this information, you can depend on various Financial Newspapers, Magazines and Websites.
2. Identify External Factors that could affect the price of the Share
The price of a share depends on the demand for a particular share and it fluctuates daily. There are many external factors, which can decrease the demand for shares, such as Political Instability, Scams, News about wars, Financial results etc., thus resulting in a reduced price for that share. Be alert for any news that are directly associated with the company such as merger, acquisitions, change in Top Management etc.
3. Take Right Decisions at the Right Time
Timely decision is the key to success in Share Market. Your decision to buy a share should not come as a result of an impulse. Impulsive buying most of the time results in loss making. Wait for the right time to get the share at a price which you thing is appropriate. Make a deep research on the company before you buy its shares.
For more details regarding trading in shares visit Guide to Share Investment
Gijo George visit http://www.giftsspace.com for Unique Crafts around the World
Article Source: http://EzineArticles.com/?expert=Gijo_George
1. Research about the company before buying a share
A thorough research is required to be carried out before you actually buy shares of a particular company. This research should be based on such aspects as Reputation of the company, Market share, Financial Results etc. For this information, you can depend on various Financial Newspapers, Magazines and Websites.
2. Identify External Factors that could affect the price of the Share
The price of a share depends on the demand for a particular share and it fluctuates daily. There are many external factors, which can decrease the demand for shares, such as Political Instability, Scams, News about wars, Financial results etc., thus resulting in a reduced price for that share. Be alert for any news that are directly associated with the company such as merger, acquisitions, change in Top Management etc.
3. Take Right Decisions at the Right Time
Timely decision is the key to success in Share Market. Your decision to buy a share should not come as a result of an impulse. Impulsive buying most of the time results in loss making. Wait for the right time to get the share at a price which you thing is appropriate. Make a deep research on the company before you buy its shares.
For more details regarding trading in shares visit Guide to Share Investment
Gijo George visit http://www.giftsspace.com for Unique Crafts around the World
Article Source: http://EzineArticles.com/?expert=Gijo_George
Thursday, 5 November 2009
A Beginners Guide To Trading Stock Online
So You Want To Buy Or Trade Shares?
The first thing you need to do if you are online, is check out online brokers such as TD Waterhouse or E-Trade. Opening an account is normally free, and once it is opened you can deposit money into your account so that you can trade.
What Type Of Broker?
The cheapest is an execution only broker. What this basically means is that you aren't given any advice on when to buy or sell the shares/trade. Their job is to provide a quote and fill the order.
What Is An Order?
All participants in the market want to do one of three things. They either want to buy, sell or hold. You only need a broker when you want to buy or sell. Holding the shares takes care of itself ( and is the least expensive while your stocks are going up in price ).
Online Trading Platforms
By having an account online, it allows you to buy or sell shares automatically ( i.e. without human intervention in the most part ). Once you place an order to buy or sell, you normally have a limited amount of time to accept or turn down the price offered.
How Are Prices Made Up?
Prices consist of a bid and offer, with the Mid price being the actual price of the share. Most stocks have one or more marketmakers that set the price for the stock so they can make money on the spread in return for making a market in that stock. For instance, you may have a stock priced at 136p with a 134p bid and 138p offer. This means the marketmaker will buy the stock off you for 134p and sell it to you for 138p.
Okay I Want To Place The Trade.
So in the example above you agree to buy at 138p and the deal goes through. Congratulations you now own shares in Company 'X'. If you pay the full offer price, it is also known as the 'touch' price. One thing to check is the normal market size for the shares you wish to buy. If the amount you require is above NMS, then the marketmakers can choose a different price to the 'screen price'
Article by Jason Davies of Forex System Trading ( A comprehensive resource dedicated to trading )
Article Source: http://EzineArticles.com/?expert=Jason_Davies
The first thing you need to do if you are online, is check out online brokers such as TD Waterhouse or E-Trade. Opening an account is normally free, and once it is opened you can deposit money into your account so that you can trade.
What Type Of Broker?
The cheapest is an execution only broker. What this basically means is that you aren't given any advice on when to buy or sell the shares/trade. Their job is to provide a quote and fill the order.
What Is An Order?
All participants in the market want to do one of three things. They either want to buy, sell or hold. You only need a broker when you want to buy or sell. Holding the shares takes care of itself ( and is the least expensive while your stocks are going up in price ).
Online Trading Platforms
By having an account online, it allows you to buy or sell shares automatically ( i.e. without human intervention in the most part ). Once you place an order to buy or sell, you normally have a limited amount of time to accept or turn down the price offered.
How Are Prices Made Up?
Prices consist of a bid and offer, with the Mid price being the actual price of the share. Most stocks have one or more marketmakers that set the price for the stock so they can make money on the spread in return for making a market in that stock. For instance, you may have a stock priced at 136p with a 134p bid and 138p offer. This means the marketmaker will buy the stock off you for 134p and sell it to you for 138p.
Okay I Want To Place The Trade.
So in the example above you agree to buy at 138p and the deal goes through. Congratulations you now own shares in Company 'X'. If you pay the full offer price, it is also known as the 'touch' price. One thing to check is the normal market size for the shares you wish to buy. If the amount you require is above NMS, then the marketmakers can choose a different price to the 'screen price'
Article by Jason Davies of Forex System Trading ( A comprehensive resource dedicated to trading )
Article Source: http://EzineArticles.com/?expert=Jason_Davies
Sunday, 1 November 2009
Make Money from the Stock Market
This is probably the most traditional form of investment pre-Internet. And has it gone away today? No! Quite to the contrary, it's alive, revamped and there is a lot more opportunity to make money...and lose money...from the stockmarkets.
Is it worth putting money on the stockmarket?
Classical question, to which I will give the classical answer. It depends how long you want to keep the money in there for.
If you want to, and can, leave the money aside for 5 years or more (i.e. you are putting some of your SAVINGS into the stockmarket), then definitely YES. Whilst past performance is not a guarantee of future performance, the stock market tends to outperform other forms of investments in the long term.
Then what if I want to make a short-term gain?
Once again, I will give a classical answer to this classical question. BE CAREFUL. You can also LOSE money on the stock market. Yes, it's very true.
Many, many people have lost money on the stock market. Some have become bankrupt, some have committed suicide over it.
But many people earn big money in the City and Wall Street doing just that, don't they?
True. But you cannot and should not aim to compete with them. First, you do not have the resources, database, training and time to research stocks as much as they do. Second and more importantly, you do not have the huge financial backing that the banks/funds have to leverage or hedge your positions. And finally, even they lose money. They just don't publicise it as much for obvious reasons. Click here to read an article on that matter.
Therefore, you should only play the stockmarket with money that you can afford to lose!
If you do want to play the stockmarket, please consider the following advice which, once again, is not exhaustive:
1. If you want the potential for higher gains, consider buying Contracts for Differences (CFDs). These are sophisticated derivative products that are now available to the public. You only put down a fraction of the money you want to invest on the stockmarket and borrow the rest. Obviously, you pay interest on the amount you borrow. This means that your investment is then geared. You stand to make stronger gains, but also more painful losses! I invested $3,500 in a CFD on a blue-chip company in August 2006. I am still licking my wounds!!
2. Bear in mind that you don't have to trade only in stocks/shares anymore. You can trade on gilt bonds, derivatives and commodities such as oil, gold and silver. If you feel you have some better knowledge about a particular market, go for that!
3. Research the market. For example, every day, I read This is Money. Every weekend, I read the Money and Business Section of The Guardian. I try to pick blue-chip stocks that are giving a relatively high dividend yield. This is interesting for 2 reasons.
(a) If, like me, you are buying stocks on a CFD, you will pay interest the longer you hold the position open. However, you will also be paid dividend. Hence, a higher dividend helps to offset the cost of keeping the position open;
(b) Such stocks may soon attract hot money hence pushing up their price;
Obviously, you need to take this with a pinch of salt, so ALWAYS research the company first to try to ascertain why this is the case. For example, has there been a profit warning issued recently?
My tips for stockmarket investments are:
1. Invest in currencies - the markets and less volatile and more predictable;
2. Invest in funds - they are less volatile and still offer good value;
3. Never act on inside information - you can go to jail for that!
Article Source: http://EzineArticles.com/?expert=Ashwin_Foogooa
Is it worth putting money on the stockmarket?
Classical question, to which I will give the classical answer. It depends how long you want to keep the money in there for.
If you want to, and can, leave the money aside for 5 years or more (i.e. you are putting some of your SAVINGS into the stockmarket), then definitely YES. Whilst past performance is not a guarantee of future performance, the stock market tends to outperform other forms of investments in the long term.
Then what if I want to make a short-term gain?
Once again, I will give a classical answer to this classical question. BE CAREFUL. You can also LOSE money on the stock market. Yes, it's very true.
Many, many people have lost money on the stock market. Some have become bankrupt, some have committed suicide over it.
But many people earn big money in the City and Wall Street doing just that, don't they?
True. But you cannot and should not aim to compete with them. First, you do not have the resources, database, training and time to research stocks as much as they do. Second and more importantly, you do not have the huge financial backing that the banks/funds have to leverage or hedge your positions. And finally, even they lose money. They just don't publicise it as much for obvious reasons. Click here to read an article on that matter.
Therefore, you should only play the stockmarket with money that you can afford to lose!
If you do want to play the stockmarket, please consider the following advice which, once again, is not exhaustive:
1. If you want the potential for higher gains, consider buying Contracts for Differences (CFDs). These are sophisticated derivative products that are now available to the public. You only put down a fraction of the money you want to invest on the stockmarket and borrow the rest. Obviously, you pay interest on the amount you borrow. This means that your investment is then geared. You stand to make stronger gains, but also more painful losses! I invested $3,500 in a CFD on a blue-chip company in August 2006. I am still licking my wounds!!
2. Bear in mind that you don't have to trade only in stocks/shares anymore. You can trade on gilt bonds, derivatives and commodities such as oil, gold and silver. If you feel you have some better knowledge about a particular market, go for that!
3. Research the market. For example, every day, I read This is Money. Every weekend, I read the Money and Business Section of The Guardian. I try to pick blue-chip stocks that are giving a relatively high dividend yield. This is interesting for 2 reasons.
(a) If, like me, you are buying stocks on a CFD, you will pay interest the longer you hold the position open. However, you will also be paid dividend. Hence, a higher dividend helps to offset the cost of keeping the position open;
(b) Such stocks may soon attract hot money hence pushing up their price;
Obviously, you need to take this with a pinch of salt, so ALWAYS research the company first to try to ascertain why this is the case. For example, has there been a profit warning issued recently?
My tips for stockmarket investments are:
1. Invest in currencies - the markets and less volatile and more predictable;
2. Invest in funds - they are less volatile and still offer good value;
3. Never act on inside information - you can go to jail for that!
Article Source: http://EzineArticles.com/?expert=Ashwin_Foogooa
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