| What are Stocks? | | | | for any reason. |
| In Stock Trading, Stocks are shares of a business. | | | | How Stocks are Traded |
| When you purchase them you are purchasing shares | | | | There are two types of Stock Markets (a) primary |
| assets of a company. Stock is a share, that any one | | | | market (b) secondary market. The primary market is |
| can buy, in the ownership of a company. Stock | | | | where securities are created at the very first time |
| represents a claim on the company's assets and | | | | (IPO - Initial Public Offering) by new established |
| earnings. As you acquire more stock/shares, your | | | | companies, while in the secondary market, investors |
| ownership in the company becomes greater. | | | | trade previously issued securities without the |
| Whether you say shares, equity, or stock, it all | | | | involvement of the issuing companies. The secondary |
| means the same thing. | | | | market is what usually people are referring to when |
| A stock is represented by a stock certificate. In | | | | they talk about the stock market. |
| today's computer age, you would not actually see | | | | Most stocks are traded on exchanges, which are |
| this document because your brokerage keeps these | | | | places where buyers and sellers meet and decide on |
| records electronically, which is also known as holding | | | | a price. Some exchanges are physical locations where |
| shares "in street name". This is done to make the | | | | transactions are carried out on a trading floor. The |
| shares easier to trade. In the past, when a person | | | | other type of exchange is virtual, composed of a |
| wanted to sell his or her shares, that person | | | | network of computers where trades are made |
| physically took the certificates to the brokerage. | | | | electronically. |
| Types of Stock | | | | Name of Some Famous Stock Exchanges: |
| When people talk about stocks they are usually | | | | - The New York Stock Exchange (NYSE) |
| referring to "Common Stock". In fact, the majority of | | | | - The Nasdaq |
| stock is issued is in this form. Common stock typically | | | | - American Stock Exchange (AMEX) |
| carries voting rights that can be exercised in | | | | - London Stock Exchange |
| corporate decisions. In the event of bankruptcy, | | | | How to Buy & Sell Shares |
| common stock investors receive their funds after | | | | The most common method to buy stocks is to use |
| preferred stock holders, bondholders, creditors, etc. | | | | a brokerage. You open accounts with the brokerage |
| On the other hand, common shares on average | | | | house pay some initial fees. Whenever you have to |
| perform better than preferred shares or bonds over | | | | buy or sell shares you contact the broker and then |
| time | | | | they carry out your instructions. And on every |
| The other of stocks is "Preferred stock" that is | | | | transaction of buy or sell they charge their |
| different from common stock, it typically does not | | | | commission. |
| carry voting rights but is legally entitled to receive a | | | | Now a days, shares are now bought and sold |
| certain level of dividend payments before any | | | | electronically online through computers. There is |
| dividends can be issued to other shareholders. | | | | plenty of software available through which you buy |
| Another advantage is that in the event of liquidation, | | | | sell stock and do not need to be dependent on |
| preferred shareholders are paid off before the | | | | brokers. You just log in to your account and start |
| common shareholder. Preferred stock may also be | | | | buying or selling at your own will without any |
| callable, meaning that the company has the option to | | | | interference of brokers. To have an idea of such a |
| purchase the shares from shareholders at anytime | | | | software check the below mentioned link. |