The Basics of Stock Trading


Stock market trading is the buying and selling of stocks of publicly listed companies. Whenever an investor buys stock in a particular company he/she is buying a proportional share of ownership in the company. Growth is realized by an increase in the stock’s value while dividends from earnings are paid to the shareholders.

Types of Stock Market Trading

Stock market trading is of several different types including futures, Exchange Traded Funds (EFTs), equities, options, or simple stocks along with several other more complicated investment vehicles. It is up to the investor to define his/her goal of trading.

What is Stock Trading?

Stock trading is somewhat of a misleading term because stocks are technically not traded. The term refers to the activity of buying and selling stocks or equities. The process involves buying a stock at a price determined by several factors with the most prominent one being how much of it is bought and sold by other investors. More on the basics of stock trading

The price of a stock will rise as more investors buy it and the shares originally bought by the investor become more valuable. If the investor sells the stock at a higher price than it was originally bought, then he/she will make a profit. Similarly, the investor will make a loss if he/she sells the stock at a price lower than it was originally bought.Stock trading is often done on the Stock Exchange Floor. It is a physical exchange floor where transactions are completed using gestures, overhead monitors, and handheld terminals. The stock exchange floor is what comes to mind when many people think about stock trading. The New York Stock Exchange is the most famous stock exchange floor.This article provided by: Investing for Retirement