| Investors who buy shares actually buy a portion of | | | | Exchange, Frankfurt Stock Exchange, and SWX |
| the company. Shares provide certain rights to the | | | | Swiss Exchange), the People's Republic of China |
| owners but they have no obligation if the company | | | | (Shanghai Stock Exchange) and the United States. |
| defaults or faces a lawsuit. The stock may become | | | | The major exchanges in the US are the NYSE, |
| worthless in a worst scenario, and that is the limit to | | | | NASDAQ, and Amex. |
| the investor's liability. | | | | Generally, share trading and economy of a country |
| Companies issue shares to raise capital. Their cash | | | | are closely interrelated. When the economic |
| requirements may be to meet the demands of the | | | | conditions are good, the market is bullish. High |
| expansion programs or to acquire new properties. | | | | economic production, low inflation and low |
| The new shares are issued at par value or at a | | | | unemployment are the indictors of bullish conditions in |
| premium depending upon the financial strength of the | | | | the market. When inflation and unemployment rise, |
| company. Thereafter, the trends in the market play | | | | bear market is round the corner. The intelligent |
| their part and the share value increases or decreases | | | | investors track various economic indices and share |
| accordingly. | | | | market trends to safeguard the investments. |
| Investors buy shares because of their belief that the | | | | The next important issue about share trading is the |
| company will grow and the value of their shares will | | | | investor's psychology and fluctuations that occur in |
| rise accordingly. In buying the shares of a newly | | | | share prices due to demand and supply. Investors |
| floated company, an element of risk is involved but | | | | rush for buying particular shares, when they see price |
| the chances of great gains are there. The trading is | | | | is rising. A falling price may have the adverse effect |
| done on share markets like New York Stock | | | | and the investors rush to sell. To determine whether |
| Exchange (NYSE) or NASDAQ (National Association | | | | such fluctuations are short term, careful analysis of |
| of Securities Dealers Automated Quotation System). | | | | the trading trends and the related information is |
| For doing trade, the company needs to be listed in | | | | necessary. |
| the exchange. Generally, the investor engages the | | | | Both long term and short term strategies are popular |
| services of a broker to do the trade. Each broker | | | | but it depends on the financial objective, of the |
| receives a commission on the sale, as per the rates | | | | investor. But you need to adopt a stock trading |
| agreed upon between him and the client. | | | | system to maximize profits and keep the |
| It is universally accepted that shares have many | | | | investments safe. |
| advantages over other forms of savings. A | | | | Expertise is possible through experience in trading. To |
| shareholder has the rights to participate in major | | | | sieve the essential from the voluminous literature |
| decisions of the company management. Every share | | | | relating to stocks is not the easiest of the jobs. For a |
| represents one vote. The shareholder is part of the | | | | beginner, it is not only desirable but absolutely |
| profits or the losses of the company. Profits are | | | | essential to avail the services of a broker or a |
| distributed in the form of dividends. The downside is, | | | | financial consultant. Different types of strategies |
| if the company does poorly, share value will decrease | | | | demand special study. A broker has better stock |
| and the dividends may be skipped. | | | | trading information and he is in a position to advise |
| The important stock exchanges of the world are | | | | you taking into consideration the size of your |
| located in Japan (Tokyo Stock Exchange), India | | | | investment. His advice will be invaluable to make |
| (Mumbai Stock Exchange), Europe (London Stock | | | | proper decisions and prevent losses. |