Stock Trading
What is Stock Trading and how does it work?
First a stock is a share in the ownership of
a company. Stock represents a claim on the company's assets
and earnings. As you acquire more stock, your ownership stake in
the company becomes greater. Whether you say shares, equity,
or stock, it all means the same thing.
Stock trading is done at an exchange,
which are places where buyers and sellers meet and decide on a
price. Some exchanges are physical locations where
transactions are carried out on a trading floor. The other type
of exchange is a virtual kind, composed of a network of
computers where stock trading is done electronically.
A stock market is nothing more than a
super-sophisticated farmers market linking buyers and sellers.
You can use a broker for stock trading who act as a
"market maker" for various stocks. They may match up buyers and
sellers directly but also maintain an inventory of stocks to
sell to other stock trading parties.
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