Basically, a tiny piece of the share capital of a cor****ation is known
as a stock and people who buy the stock investing in the future of the
company are known as share holders and they remain so, as long as they
own the shares. The factors that decide the price for the shares are
the economic conditions of the country, the investor=92s attitude and
the performance of the company.
The first time a company "goes public" is the time when it offers its
stock for public sale and is known as initial public offering or IPO.A
dividend is the share in the profit the stockholders get when the
business makes a profit and frequent dividends issued are income
stocks and stocks that are reinvested to make improvements in the
company are growth stocks.
A person who is licensed to trade stocks through the stock exchange is
known as a stockbroker who buys and sells stocks through an exchange.
He can either be on the trading floor or can make trades
electronically or through phone.
Any person who owns a computer, with internet connection has enough
money to start an account and has a good financial history could own
shares and do online trading. There is no compelling need for a
stockbroker or a fortune to do online trading because the market has
become more accessible. In an online trading, instead of talking to
someone about investments, the person decides which stocks to buy and
sell and requests the trade. Sometimes, online brokerages offer advice
from live brokers and broker -assisted trades, which is a part of
their service. Apart from buying and selling stocks, it is possible to
make a number of other investments online, depending upon the
brokerage. Even participating in IPOs can be done for some firms.
Some companies allow trading in options (which is a contract giving
the right to buy and sell stock on or before a specific date at a
specific price), mutual funds (combining many people's money and
investing in a range of companies), bonds (loans that are repaid along
with interest by companies and businesses) and futures (which is an
agreement to buy or sell a stock at a future date). But options and
mutual funds are well suited only for experienced investors.
Online trading has significantly contributed to the growth in trading
volume. Transaction costs have reduce after the introduction of online
trading and brokerage commissions for online trading are lowered due
to price competition. On top of all, because of online trading,
individual investors have an easy and speedy access to the market
information and the securities market -related websites have increased
rapidly which provide a lot of information including quotation,
cor****ate disclosure, research papers, and financial information on a
real time basis. Thus, online trading contributes to the alleviation
of the information among market participants between the individual
and institutional investors.
Although online trading has many positive effects, there are certain
disadvantages too. Due to online trading, day trading has increased
the volatility of the prices and some large investors attempt to
mislead the investors by placing fake orders. On line trading has
increased the extensive use of Internet by investors and also
unconfirmed rumors are floated on the cyber space. Even though on line
trading has increased in leaps and bounds in volumes, the same cannot
be said about the profitability of securities firms.
http://sada-fxonlinetrading.blogspot.com
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