Stocks are shares acquired from a publicly listed company. As a shareholder, one is considered as a part-owner of the said company and has certain privileges such as voting rights. A shareholder also receives an annual dividend from the companys annual profits. Dividends are computed like this: suppose you were able to buy 1,000 shares of MAC Company and the company has profits of about $7.5 billion annually that possess 750,000 shares all-in all. Your annual dividend would then be estimated to around $10 million. That is just how simple stock works.
Stock Trading is the activity of buying and selling of stocks. It is oftentimes called as stocks exchange. It is entirely difficult and time consuming for a person who wants to sell shares of his company, by running down an ad or spreading the news through word of mouth. That is the reason why there are exchange floors. Exchange floors are venues where sellers and buyers (traders) meet on one roof- well; those are actually brokers that do the job for them.
The New York Stock Exchange is the basically the largest exchange floor in America today. It features the sales that are up for grabs and also its values and worth. We normally see the exchange floor as bursting with chaotic activity. Inside the NYSE is a large screen where the current market value and market situation can be seen. It shows the fluctuations and the rise in the market. Stock traders usually see this as an opportunity to sell their stocks so they could gain higher profits. The NYSE is also a place where the current market value can be seen along with the fluctuations or rises every second or minutes.
Stocks are not stable financial instrument because it does not possess a specific value. It goes up and it goes down, depending on the companys situation in the market. Some investors are into day trading, where they rapidly transact hundreds of stocks per day for the instant profits it brings. It is more of like a gamble and financial experts see the buy and hold strategy as the better way in investing.
These are just some of the basics that one needs to learn about stocks and stock trading.
Tags: business, credit, economy, finance, growth funds, internet trading, investments, mutual funds, online trading, stock investments, stock market, stocks