Online trading made simpler
Like many people, you might firmly associate trading stocks with risk taking. You might have been warned, especially during volatile markets, that you incur risk of substantial permanent capital loss when selling or buying stocks. There is certainly a grain of truth to such warnings, since no trading is ever risk-free. But investing in the stock market will allow you to build your net worth more surely than trading other securities. You just need to be disciplined and smart when trading stocks. You also need to understand differences between stocks, because not all stocks are traded and approached similarly. First, however, you need to have a clear grasp of what a stock is.
Stock is also called share or a company’s equity, a stock is a financial instrument representing your ownership in a company or corporation. It represents your proportionate claim on a company’s assets and earnings; that is, on what it owns and generates in profits. When we talk about owing a stock in a company or corporation, we mean that you, as a shareholder, own a slice of the company equal to the number of shares held as a proportion of the company’s total outstanding shares. Let us say you own 200 shares of a company with 100,000 outstanding shares. You will then have a 0.2% ownership stake in this company.