Stock Market and Online Stock Trading
In every modern society
stock market is an integral part of the business news every day. Business
groups and even governments use the stock market to create capital. The stocks or shares are like little pieces
of ownership of the company and the value of these stocks is depending on the
performance of the company.
A stock exchange does
not own shares, but it act as an intermediate platform where buyers and sellers
meet for trading. The main function of
an exchange is to provide liquidity.
Most of the shares trade through more than one stock exchange.
New York Stock Exchange (NYSE),
American Stock Exchange (AMEX) and Nasdaq are the main stock exchanges in
America. Though the trading of the
stocks is doing through brokers, a good knowledge about the stock exchange will
help you to understand the techniques of stock trading or investing in stocks.
Watch video below by Kurzgesagt about How the Stock Exchange Works:
The NYSE and AMEX are
mainly auctioning based exchanges and here the brokers or their representatives
physically come to the trading floors and participate in verbal auction for
stocks. Nasdaq is an electronic exchange
where buyers and sellers are doing their trading by computers using internet
network. More companies are listed in
Nasdaq and number of trades in shares are also higher in Nadsaq than NYSE.
AMEX is
a smaller exchange and it has the second largest options trading market. Listing
on the NYSE affords companies great credibility because they must meet initial
listing requirements. Nasdaq has a
separate section for companies with small capital. Investors who are interested
in smaller companies can trade through this exchange.
When a company offers its stock to public, it is
called IPO or initial price offerings. Stocks first become available on an exchange after a
company conducts its IPO. After this initial procedure of listing, if
the company continues to do well in their business, the stock price will go up
and the demand for its stocks will also go up.
After the IPO, the ownership of shares will hand over to the public
(shareholders) and these shares can be sold and purchased in an exchange
(secondary market).
When a company performs badly after the IPO, the
share holders will begin to sell the stock and this will make the stock price
to go down. The performance of the
companies is assessed by their monthly earning reports. According to these reports, the stock price
and the demand will go up or go down periodically. When a company’s performance is good and if
it shows the upward progress steadily, that stock is referred as ‘blue chip’
stocks or most reliable stocks.
In stock exchanges, it isn’t just stock that is traded but bonds, securities and commodities are also traded creating wealth in many different sectors. The role of stock exchanges in the economy of any country is very important.
In stock exchanges, it isn’t just stock that is traded but bonds, securities and commodities are also traded creating wealth in many different sectors. The role of stock exchanges in the economy of any country is very important.
Online
stock trading is a way to make small or large amount of money as per your
interest. If you are wise enough to do
the online trading of the stocks successfully, you can make huge amount of
money from this business. But if you are
not capable enough to understand the basics of this business, it is easy to
lose money also. So to become a
successful online trader and to make money, seek help of a professional
company, who has enough experience and expertness to lead y0u into success.
Click here to learn more about getting real
time tips for successful online stock trading.
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