STOCK TRADING

WHAT IS STOCK TRADING?

Stock trading, also known as refers to the buying and selling of shares in a particular company.

In the stock market, for every buyer, there is a seller. When you buy 100 shares of stock, someone is selling 100 shares to you. Similarly, when you go to sell your shares of stock, someone has to buy them. If there are more buyers than sellers (demand), then the stock price will go up. Conversely, if there are more sellers than buyers (too much supply), the price will fall.

Investing in Stocks

Stocks generate investment returns that are superior to those from every other asset class.

Stock returns arise from capital gains and dividends. A capital gain occurs when you sell a stock at a higher price than the price at which you purchased it. A dividend is the share of profit that a company distributes to its shareholders.

STOCK TRADING INDICES

In addition to individual stocks, many investors are concerned with stock indices (also called indexes).

Indices represent aggregated prices of a number of different stocks, and the movement of an index is the net effect of the movements of each individual component. When people talk about the stock market, they often are actually referring to one of the major indices such as the Dow Jones Industrial Average (DJIA) or the S&P 500.

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