What Are Stocks?
Stocks, also commonly referred to as equities or shares, are issued by a public corporation and put up for sale. Companies originally used stocks as a way of raising additional capital, and as a way to boost their business growth. When the company first puts these stocks up for sale, this is called the Initial Public Offering. Once this stage is complete, the shares themselves are then sold on the stock market, which is where any stock trading will occur.
People occasionally confuse buying shares with physically owning a portion of that company. The law treats this type of corporation in a unique way; as it is treated as a legal person, the corporation, therefore, owns its own assets. This is referred to as the separation of ownership and control.
The separation of these things is beneficial to both the shareholders and the corporation because it limits the liability for each party. One thing lies at the core of a stock's value: it entitles shareholders to a portion of the company profits.
How Do I Trade Stocks?
A stock market is where stocks are traded: where sellers and buyers come to agree on a price. Historically, stock exchanges existed in a physical location, and all transactions took place on the trading floor. One of the world's most famous stock markets is the London Stock Exchange (LSE).
Yet as technology progresses, so does the stock market. Now we are seeing the rise of virtual stock exchanges that are made up of large computer networks with all trades performed electronically.
A company's shares can be traded on the stock market only following its IPO, making this a secondary market. The large businesses listed on global stock exchanges do not trade stocks on a frequent basis. Stocks can only be purchased from an existing shareholder, not directly from the company.
The reason traders choose to invest in stock is because the perceived value of a company can vary greatly over time. Money can be made or lost; it depends on whether the trader's perceptions of the stock value are in line with the market.
Trying to predict the price movements of stocks in the short term is nearly impossible. Generally, stocks do tend to appreciate in value in the long term, so many investors choose to have a diverse portfolio of stocks that they intend to keep for a long time.
Stock Trading Risk Assessment
All forms of financial investment carry a level of risk, and stock trading is no different. Even traders with decades of experience cannot predict the correct price movements every single time.
People use various strategies, but it is important to note that there is no such thing as a failsafe strategy. It is also advisable to limit the amount of money you invest in a single trade, as part of your own risk management.
How do I create an account?
Click the "Sign Up" or "Create an Account" button on any page to register. You'll be guided through a short questionnaire about your investment goals, then complete your registration with your personal details.
How do I log in to my account?
Visit the login page and enter your registered email and password. If you've forgotten your password, use the "Forgot password?" link on the login page.