What is share trading?-Before
getting to know share/stock trading you must know what share is. A
Share is the smallest unit of ownership in a joint stock company. The
ownership of a share gives the owner the right to have a say in the
management of the company.
Only public limited companies (PLC) can issue shares to the general public. They issue shares in order to raise capital. The first issue is known as Initial Public Offering (IPO).
Once people own shares by means of subscribing to IPO, they may need to have a liquidity ie selling these certificates of ownership in order to redeem their money. For this purpose secondary market has been created. These secondary markets are known as stock market or share markets. This is the place where shares are bought and sold freely which of course is governed by the universal law of supply and demand. The shares that are more in demand goes up in price and those that are low in demand goes down.
The investors in the share/stock market make money by the principle of buying low and selling high.
This is in brief about share trading.
Only public limited companies (PLC) can issue shares to the general public. They issue shares in order to raise capital. The first issue is known as Initial Public Offering (IPO).
Once people own shares by means of subscribing to IPO, they may need to have a liquidity ie selling these certificates of ownership in order to redeem their money. For this purpose secondary market has been created. These secondary markets are known as stock market or share markets. This is the place where shares are bought and sold freely which of course is governed by the universal law of supply and demand. The shares that are more in demand goes up in price and those that are low in demand goes down.
The investors in the share/stock market make money by the principle of buying low and selling high.
This is in brief about share trading.
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