Stock Market

February 6, 2006 | In: Share Market

All that You Want to Know about Stock Market

The Stock market is a place for trading of company shares, stocks, and stock index futures. Investing your money in stock market trading requires certain knowledge of stock market basics and value investing. Now stock market trading is possible by investing online and developing your portfolio through investments in good companies. Price movement of stocks is available on various stock market indices. Share trading could be either buying or selling of shares and stocks.

How does the Stock Market Function?

Stock market functions either through share trading on stock exchange floor or electronically. You instruct your stockbroker to purchase or sell shares of particular company. He then informs floor clerk of stock exchange, who finds a suitable buyer. After completing deal, stockbroker gets back to you with final price of your investments. Mutual funds and other institutional investors prefer electronic exchange for stock buying and stock selling. Such online investing enables closer contact with share trading although you need services of stockbroker, who offers valuable investing advice and investment tips.

Useful Terminology

Global stock market provides details of different stocks across the world. Stock options allow free buying and selling of investments at agreed prices within certain period. Stock index futures are investor’s contract to invest or sell investments at agreed prices over a decided period. Short selling and margin buying are traders’ tactics to make money in short period. Short selling involves trader buying stocks from clients for a short time and then selling in stock market, hoping for profit. Otherwise, he loses money is price of stocks rises. However, margin buying involves borrowing of money at interest to buy stock and hoping for a rise in prices. Stock market regulation is forming and observing rules for working within stipulated parameters of stock market.

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