Stock and stock trading are still virtually unknown to a lot of people.
Just seeing it in the news or hearing it somewhere makes it seem too difficult for the average Joe to understand.
For most of us, all we see are companies, charts, lines and numbers that change from time to time and a lot of people creating a ruckus in a busy room.
What exactly is stock trading? It simply means the buying and selling of shares of stock.
Shares of stock correspond to the interest of a person in a particular corporation.
Each share is equivalent to a corresponding monetary value.
These shares can be sold or otherwise disposed by a shareholder to another person except when it is not allowed by law or by the by-laws of the corporation.
This has resulted to the establishment of stock exchanges.
One does not need to have knowledge of all the technical intricacies of how to buy and sell stocks.
Nevertheless, it is necessary to have a basic appreciation of how the markets work.
There are two fundamental ways to make a trade: either on the exchange floor or electronically.
There is a great insistence to move the trading off the trading floors and to the networks but this is not actually being accepted by many.
Most markets, deal with stocks electronically.
Stock trading on the exchange floor is probably the method people are most familiar with as we see it in movies and on the television.
There is this image of a lot of people in suits making different gestures, shouting and constantly watching the monitors.
A simple trade on the exchange floor starts with the client asking the broker to buy a particular number of shares at the stock market.
Afterwards, the order department of the broker then informs the floor clerk on the exchange about the order.
The floor clerk then informs their floor trader regarding the order and the latter then in turn searches for another floor trader that is selling the particular shares of stock being ordered.
The two meet on a price and execute the deal.
The information of the deal goes back up the line and the broker then informs the client of the final price.
This is of course only a simple trade as there are more complicated trades requiring a more tedious process.
The electronic market on the other hand makes use of computer networks to set up buyers and sellers instead of personal brokers.
While this system does not have the same charm of the images of the exchange floor, it is very effective and fast.
Many large traders have a preference for this method of trading.
However, a broker is still necessary for handling the trades since some individuals don't have contact to the electronic markets.
The broker gains access to the exchange network and the system looks for a buyer or seller depending on the order.
Stock trading is not a job for everyone.
It comes with a lot of hardships as well as a certain amount of expenses.
It is not a job for the newbie who just wants to earn some easy money.
It also entails a certain degree of accountability and some requirements which may be imposed by the government.
There are also taxes and other fees and expenses to worry about.
On the other hand, it can also be a very rewarding and productive vocation for the successful stock trader.
While many have been unsuccessful, there are some who have made a lot of money out of it.
Suffice to say, success in this kind of job needs a lot of perseverance and hard work.
Just seeing it in the news or hearing it somewhere makes it seem too difficult for the average Joe to understand.
For most of us, all we see are companies, charts, lines and numbers that change from time to time and a lot of people creating a ruckus in a busy room.
What exactly is stock trading? It simply means the buying and selling of shares of stock.
Shares of stock correspond to the interest of a person in a particular corporation.
Each share is equivalent to a corresponding monetary value.
These shares can be sold or otherwise disposed by a shareholder to another person except when it is not allowed by law or by the by-laws of the corporation.
This has resulted to the establishment of stock exchanges.
One does not need to have knowledge of all the technical intricacies of how to buy and sell stocks.
Nevertheless, it is necessary to have a basic appreciation of how the markets work.
There are two fundamental ways to make a trade: either on the exchange floor or electronically.
There is a great insistence to move the trading off the trading floors and to the networks but this is not actually being accepted by many.
Most markets, deal with stocks electronically.
Stock trading on the exchange floor is probably the method people are most familiar with as we see it in movies and on the television.
There is this image of a lot of people in suits making different gestures, shouting and constantly watching the monitors.
A simple trade on the exchange floor starts with the client asking the broker to buy a particular number of shares at the stock market.
Afterwards, the order department of the broker then informs the floor clerk on the exchange about the order.
The floor clerk then informs their floor trader regarding the order and the latter then in turn searches for another floor trader that is selling the particular shares of stock being ordered.
The two meet on a price and execute the deal.
The information of the deal goes back up the line and the broker then informs the client of the final price.
This is of course only a simple trade as there are more complicated trades requiring a more tedious process.
The electronic market on the other hand makes use of computer networks to set up buyers and sellers instead of personal brokers.
While this system does not have the same charm of the images of the exchange floor, it is very effective and fast.
Many large traders have a preference for this method of trading.
However, a broker is still necessary for handling the trades since some individuals don't have contact to the electronic markets.
The broker gains access to the exchange network and the system looks for a buyer or seller depending on the order.
Stock trading is not a job for everyone.
It comes with a lot of hardships as well as a certain amount of expenses.
It is not a job for the newbie who just wants to earn some easy money.
It also entails a certain degree of accountability and some requirements which may be imposed by the government.
There are also taxes and other fees and expenses to worry about.
On the other hand, it can also be a very rewarding and productive vocation for the successful stock trader.
While many have been unsuccessful, there are some who have made a lot of money out of it.
Suffice to say, success in this kind of job needs a lot of perseverance and hard work.
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