What Are Shares?
Stocks are the shares into which ownership of the company is divided. Those who own stocks are called stockholders or shareholders. The ownership of shares entitles stockholders to a fraction of the company’s assets and earnings. Stocks are usually traded in stock markets.
Companies go public and issue stocks in order to raise money to invest in their business and help it grow. Investors, on the other hand, buy stocks to try to make money and diversify their investments. Stock prices fluctuate, making the value of the company either increase or decrease.
Share Trading Strategies
In the world of trading, strategies are key to improving your chances of profitable returns, and a way to potentially reduce your risk. A good stock trading strategy takes into account the particular stock you’re planning to trade, the market conditions, and any relevant information regarding the company and industry. In addition, you should know the amount of risk you’re willing to take, as well as understand your personal needs and preferences. Strategies should be carefully crafted and tested in order to try to minimize the chances of losing money.
Important Terms Used in Stock Trading
- Annual Report – Report that contains information about the company’s management and financial situation.
- Ask – The price at which a seller is looking to sell his shares.
- Bear Market – Refers to the stock market being in a span of falling prices.
- Bid – The price that a buyer is willing to pay for a stock.
- Broker – Person who arranges transactions (buys of sell) in your name for a fee.
- Bull Market – Refers to the stock market being in a span of rising prices.
- Dividend – A portion of the earnings which is paid periodically by a corporation to its shareholders.
- Earnings Release – Quarterly statement that details the corporation’s profits or losses.
- Exchange – The venue where trades take place.