Overview
Stock trading is the process of buying or
selling stocks of companies in the stock exchange. You should first
understand how the market works before you can go in to trade. A
stockbroker is someone who helps you with the process of buying and
selling stocks or bonds. A stock market investment brings large returns,
but it also involves huge risks. Before you start trading in the stock
market, you should be aware of the risks associated with trading and
invest wisely.
How It Works
Stock trading is the process of buying and selling stocks of publicly
traded companies. Small stock investors and large hedge fund traders
participate in stock trading. Exchange takes place in physical locations
where the transactions are carried out on a trading floor. This method,
known as open outcry, is used in stock and commodity exchanges where
traders call out verbal bids and offers simultaneously. There is another
kind of stock exchange, which is a virtual kind, composed of a network
of computers where the trading is made electronically. In the stock
exchange, a potential buyer bids a stock for a specific price and a
potential seller asks a specific price for the stock. The sale takes
place on a first-come, first-served basis if there are multiple bidders
or askers for the same price.
Benefits
There are many benefits that can come from stock trading. One of the
biggest benefits, of course, is the opportunity to share the profits of
the companies that you invest in. It also offers a great amount of
flexibility in work timings, educational qualifications and investment.
You can work part time or full time, and even from your home. Another
advantage is that you can work without interference, at your own pace
and get immediate returns.
Cost/Pricing
When it comes to the costs of stock trading, the prices will vary
depending on what type of stocks you wish to purchase. Stock prices of
every company depend on the market conditions and the company's
prospects. Transaction costs are incurred when the stock is traded. If
you choose to hire a professional to trade your stocks for you or to
advise you on marketing conditions, you may have to pay them a fee.
Timing
The ideal time to buy stocks is when their prices are low and sell
them when the stock prices rise. You should be well versed with the
financial market before you start trading in stocks.
Companies/Industries
Many companies are publicly traded in the stock market. Make sure you
do your research to get as much information as possible on the company
before you invest in it. Some of the famous stock exchanges where this
trading takes place are the New York Stock Exchange, London Stock
Exchange, Tokyo Stock Exchange and Bombay Stock Exchange. National
Association of Securities Dealers Automated Quotations, or NASDAQ, is a
virtual stock exchange, while Paris Brouse is an electronic stock
exchange.
