Stocks Trading
A CFD, or Contract for Difference, is a type of financial instrument that allows you to trade on the price movements of stocks, regardless of whether prices are rising or falling. The key advantage of a CFD is the opportunity to speculate on the price movements of an asset (upwards or downwards) without actually owning the underlying asset.
Stock trading has been a popular financial pursuit since stocks were first introduced by the Dutch East India Company in the 17th century. This is both an efficient and effective type of investment for both families and individuals.
What Are Stocks?
Stocks, also commonly referred to as equities or shares, are issued by a public corporation and put up for sale. Companies originally used stocks as a way of raising additional capital and as a way to boost their business growth. When the company first puts these stocks up for sale, this is called the Initial Public Offering. Once this stage is complete, the shares themselves are then sold on the stock market, which is where any stock trading will occur.
Ownership and Control
People occasionally confuse buying shares with physically owning a portion of that company as if this somehow gives them the right to walk into the company offices and begin exerting their ownership rights over computers or furniture. The law treats this type of corporation in a unique way; as it is treated as a legal person, the corporation, therefore, owns its own assets. This is referred to as the separation of ownership and control.
How Do I Trade Stocks?
A stock market is where stocks are traded: where sellers and buyers come to agree on a price. Historically, stock exchanges existed in a physical location, and all transactions took place on the trading floor. One of the world's most famous stock markets is the London Stock Exchange (LSE). Yet as technology progresses, so does the stock market. Now we are seeing the rise of virtual stock exchanges that are made up of large computer networks with all trades performed electronically.
Stock Trading Risk Assessment
All forms of financial investment carry a level of risk, and stock trading is no different. Even traders with decades of experience cannot predict the correct price movements every single time. People use various strategies, but it is important to note that there is no such thing as a failsafe strategy. It is also advisable to limit the amount of money you invest in a single trade, as part of your own risk management.
Start trading stocks with TradingSolutions and gain access to global markets with competitive spreads, advanced charting tools, and real-time market data.