Shares Trading

DEFINITION of Shares trading

Shares trading is the buying and selling of company stock or derivative products based on company stock in the hope of making a profit.

WHAT IT IS IN ESSENCE

Shares represent a portion of the ownership of a public company and make up its worth or market cap. The trading of shares is one of the most popular markets in investing. Besides forex and commodities.

There are two main methods of profiting from the price movements of shares: non-leveraged trading ( share dealing), and leveraged trading.

Non-leveraged trading

Most shares trading takes place on stock exchanges. Only participants with registration can trade directly with stock exchanges. While the majority of traders will do so via a stockbroker.

Leveraged trading

It is possible to use derivative products like  CFDs and spread bets to participate in the shares market.

These allow for more flexibility than traditional trades. With the opportunity to take long or short positions to trade in both bull and bear markets.

These products operate on leverage, to increase exposure on a position without the use of more capital.

This means spread betting and CFDs also carry greater risks. Including the risk that your losses could exceed your deposits.

HOW TO USE

You can buy and trade shares on the stock exchange. And the majority of public shares can trade electronically these days. 

Meaning buys and sells orders are placed using computers and matched online by exchange-operated software. Buy and sell orders are the tools used by investors to move shares.

A buy order is essentially an expression of interest in buying a certain quantity of shares in a certain company.

A sell order is the opposite, it’s signaling that the person who places the order wants to sell a certain number of shares in a certain company.

Once an order is filled (a buyer finds a seller or vice versa), the parties then generally have a few days to conduct the transaction. And move their respective funds/shares around.