The buying and selling of a company’s derivatives, stocks or shares is done on the stock market. It is where trading of a particular company’s stock occurs at a price agreed upon.
A “stock market” is also known as an equity market since there are instances where stocks are called equities.
Stocks versus Shares
Stocks and shares are interchangeable; however both terms have (in certain contexts) differences. Stocks generally refer to any company’s ownership certificate, while shares represent a particular company’s certificate of ownership.
This means that if you have shares of a particular company, you are part owner of that company, and you have the right to vote if there are any issues in the company.
Stocks on the other hand don’t provide any assurance of revenue. Stocks can yield returns via dividends even if the stock’s price does drop. In other words, you are sure to get a return on a share as long as the company provides dividend on that share.
Stock Market Trading – How Does It Work?
Trading happens on the stock exchange floor and is executed by brokers. In order to do trading on the stock market, a dematerialized (also called demat) account is required. After that you can then talk to a broker.
They can grant power to send out trading orders to their sub-brokers. You can speak with a sub-broker as well instead of an exchange broker since brokers usually only conduct business with FII’s or huge investors.
You Can Make Money With The Stock Market
The stock market gives you a chance to generate some money by selling or buying a company’s shares. Once you have been permitted to do stock market trading; you can trade any stock. The market’s process of trading happens when an individual wants his stocks sold and there is someone who is willing to purchase them.
Therefore it serves as a medium between the seller and the buyer and they have both reached an agreement regarding the price of the said stock at that given time.
In the past the majority of trading was done using conventional trading methods wherein traders were frantically throwing and waving their hands in the air and signaling to other traders to perform an exchange. However these days the trading is carried out electronically through a network of computers and the latest information technology.
Which Stocks Should You Trade?
Since the stock market is unpredictable at the moment it can be difficult to forecast which stock price will increase or which may drop. There are countless professionals who analyze the stock market on a daily basis and they make predictions about the market trends based on their research.
A number of stock advisories also offer stock tips that can help a trader decide on which stock to buy or sell. Please don’t ever trade stock without a little bit of research.
So why not learn more and get your beginners guide to investing in shares.