Trading stocks and shares for dummies
There are also certain banks which allow you to set up your own stock portfolio and buy and sell stocks online using the funds in your bank account. Let us get you started on the basic terms used in the stock market jargon.
The number of shares issued by a company depend on the size of the share that a particular stock represents. It ensures that stockholders , that is people interested in buying shares, have a part in the company by owning a fraction of it. What you are entitled to basically are a company's earnings and assets.
Assets are everything that a company owns, be it machinery, buildings, electronic equipment and so on, where its earnings are what it makes through sales. The purpose of a company baring its stock in the stock market is to make money from the public, and return profit dividend gained, once the company makes successful returns. This is known as a bull market. The vice verse situation is when there are an increase in sellers and a fall in buyers, where the price drops.
This situation is termed as a bear market. IPO IPO or Initial Public Offering , is when a company that is privately owned issues stock to people, making itself no longer privately but simultaneously owned by those who invest in the company. Depending on the future of the company and how one foresees its profit-making potential, the IPO after a long and tedious process, determines this.
A company requires capital or money, to help it in different sectors of the business that need to be tended to. Trades When an investor decides to buy stock, he gets in touch with a broker or requests to so on online. When you put in your request to either of these, the trade order is sent to the stock market trade floor or through a network that finds the most reasonably priced stock, or the cheapest possible one for you to invest in.
While this happens, the representative of the seller is simultaneously looking for a buyer with the highest buying price, where your representative and the other's come to an understanding after settling each other's trade details. The stock market is a bustling entity that not all of us have to necessarily understand in order to invest in a company. The best way to get involved is to have someone with investing knowledge help you out when you dip your feet in for the first time.
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