The evolution of the financial markets has created an assortment of new questions and challenges for participants. While the core business of an active trader is to buy and sell securities, in [...]
A share of stock is a small portion of a company. Various amounts of stock are issued directly by the company, with the proceeds from their sale being used to sustain business operations. Both private and public corporations may engage in the issuance of stock, with public offerings being available for purchase and trade on the open market. The origins of corporate stock issuance and exchange-based securities trading can be traced to early 17th century Amsterdam and the Dutch East India Company.
Stocks come in many shapes and sizes, each with unique characteristics. Some stocks pay shareholders a portion of corporate profits on a specified date known as the ex-dividend date. Penny stocks afford risk-tolerant investors the ability to buy bargain-priced stocks with the hopes of a large appreciation in value. Still, other investors prefer to buy and trade a company’s first issuance of stock to the public, known as its initial public offering.
Purchasers of stock become shareholders and gain limited ownership in addition to an opportunity to share in corporate profits. If the shareholder’s stock is of a publicly listed company, then they also have the ability to trade their shares with others on the open market. There are several ways for an individual to buy stock, ranging from company-direct programs to online discount brokerages. Some investors prefer to utilize the services of a stockbroker to ensure the transactions are executed smoothly.
Investing or actively trading stocks is not suitable for everyone. Many individuals elect to trade currencies on the forex market instead of stocks. It’s up to each market participant to make an informed decision regarding which financial instrument is most suitable for investment or active trade.
This article contains general information and does not represent trading advice.