Publisher's Synopsis
Do you want to know how to trade in Option Trading?What is a stock exactly?
At its most basic, one share of stock is a representation of a partial claim to a given company's earnings and assets. The more shares of a company's stock that are available overall, the less each individual share is worth. The more shares of a company you own, the more control you have over the company in question. Stock can also be referred to as equity or shares as well. Those who own stock in a company are referred to as that company's shareholders which means they each get a share of profits, known as dividends, at predetermined periods throughout the year and also, in some cases, voting rights based on the number of shares in a company that they hold.
While originally each stock that you owned came with a physical piece of paper indicating what you owned as well as how much, these days all of this information is stored electronically by the brokerage that you will ultimately choose to directly handle your transactions. While holding a physical copy of your shares is nice, it would also require you to take those documents to the brokerage you were using every time you wanted to make a trade. This process is referred to as the in street name method of holding shares.
While owning shares of a company does entitle you to a piece of their profits, it does not mean that you can have an active say in how the business is run, even if you own voting shares. At most, you are going to be able to vote for the board of director members at an annual shareholders' meeting. During this meeting, you will be able to cast your vote and it will be weighted based on the number of shares of the company's stock that you hold. The goal of this process is to provide shareholders a way of indicating their pleasure or displeasure with the overall way the company is being run. Unless you own a significant portion of the overall number of shares of a company you really won't have much say in what they do.
Investing or tradingWhile many people assume that investing in stocks is the same as trading stocks, the two have a number of key differences that make them quite different. Before you commit to trading stocks, it is best to ensure you know what you are getting into. The difference between the two stems ultimately on how the money that is put into the market is used. If you are hoping to make trades that will pay off a year or more down the road, that is an investment; if you are hoping to see returns in the short term that's trading.
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In this book we will discuss the following topics:- What Stocks Are and The History of This Investment
- Financial Planning and Stock Trading Fundamentals
- Stocks and Bonds
- How to Get Started with the Stock
- Buying and Selling Stocks
- And many more!
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