how does a stock trading works?
344986
Nothing could be more simple. First you open an account with a brokerage firm. On line brokers charge very reasonable commissions. You normally have to make a deposit of at least $500. But in my oppinion that is not really enough to begin with. You can purchase stocks on margin, which means you only have to fund 50% of the purchase price and the brokerage firm will lend you the rest, at an interest rate of course. \n\nNext, you pick out a stock you want to buy or sell. You can do either. If you do not own the stock, selling it is called short selling. That means that eventually, you will have to buy it back. You then make your trade and wait for the price to go up or down. At some future time, maybe a few minutes, maybe a few hours, maybe a few days, or weeks, or months, or years, you will decide to sell the stock or repurchase your short position at either a gain or a loss. \n\nIt is that simple. If you hold the stock for at least a year and you have a gain, you will be taxed at a rate of about 1/2 the normal tax rate. On short sales, gains for some odd reason are always taxed at the full rate.
77057
Stocks are simply small fractions of ownership of very large companies.  These stocks are owned by very many people and they need to buy/sell those shares sometimes.  Of course, buying and selling is referred to as investing.\n\nHere are a couple of websites that I have found very useful:\nhttp://www.dallasnews.com/business/scottburns/\nhttp://www.bobbrinker.com/
505134
Good question.  I wish that more people would LEARN about how the stock market exists and participates in its usage.\n\nThe best way, first of all, is to understand the fundamentals of business.  Not just how it works, but what constitutes profit, earnings, etc. Once you have a fair understanding of how business works, then you are ready to understand the stock market.\n\nDON"T get into it, though, if you are just looking to make money WITHOUT doing any work, either in researching the companies, or in researching the people who research the companies (broker consultants)!  That is probably my only caveat. \n\nNow...start here for your stock market tutorial... Good luck!\n\nhttp://www.investopedia.com/university/stocks/\n\nRemember me in a few years when you are filthy rich so I can do research for you at 8 bucks an hour...
152072
The answer is by using simple mathematics.\n\nFirst you need to decide how much of each stock you are going to buy - since not all stocks are priced equally some would be $20, other $400 and some 0.05 cents.\n\n$100,000 over ten stocks... Decide what ratio you will hold of each stock. E.g. 6:3:4:1:9:4:3:7:9:2\n\nSo totalling the ratio is 48. Now you can use a combination of the ratios and fractions to find out how much stock you can hold with your $100,000.\n\nI may have left you out on a limb there - but this calculation is uneccessary. Why don't you just buy your stock one by one until you run out of money? :P\n\nOK Lets try the example with 2 stocks and $100K\nyou want the weighting to be 3:4\nso you want \n3/7ths of your money to go to 1 stock\n4/7ths of your money to go to 1 stock\n\n3/7*100K=$42857.14\n4/7*100K=$57142.85\n\nNow say stock ZXC was $5 each and stock ABC was $67\n\nNow you go:\n$57142.85/$67=852.88 Stocks\n$42857.14/$5=8571.43 Stocks\n\nThere you go. Now do the similar calculation with your ten stocks! Haha!\n\nGood Luck!
382151
This is just the process for opening an account and starting to trade stocks.  Learning which stocks to trade can take years, and is way to complicated to try to explain here:\n\nTo open an account, go to a brokerage firm (like Schwab, Etrade, Scottrade; whoever) and get a form to open an account, or you could just download the form from the internet.  \n\nFill out the form, and send it to the brokerage firm (or you can drop it off at the brokerage firm).  \n\nWait for the firm to open an account for you, it won't take long and they'll send you the info when its open or you could call/ drop by their office.  \n\nNow start trading.  You would typically trade by calling the firm and telling them what to buy/ sell, or doing it over the internet.\n\nThis is a very very general explanation, but there are about 100 details you will need to decide for yourself along the way.  ie what kind of account; are you rolling an ira or something into the new account (the brokerage firm will handle this, you just fill out another form); do you want a full service broker (more expensive but gives you more advice on what to buy) discount broker (less expensive, some advice) or deep discount broker (cheap, but you are on your own in terms of what to buy); and many other details.  \n\nOf course the brokerage can help you with most of the details, but they can't teach you how to choose which stocks to buy/ sell (and quite frankly the picks given by the full service brokers may not be any better than throwing darts at a newspaper); this part takes years of trial and error to figure out - so hey, get going.  No time like the present to start.\n\nGood luck.
38623
someone wants to buy partial ownership of a company, and someone wants to sell partial ownership.  The stock is transferred, and fees are extracted for the service.  Someone eventually wins and someone loses, but the financial institutions make money on the trade no matter what.
67826
Stock market is a kind of business where things happen so fast that one can’t handle it. It’s like a fighter jet where one mistake makes up loose a lot. \n\nBut once you had a good grip on it, you do get good returns. I suggest you to enter in the market after learning and getting good info about how it works. \n\nIf you have 100$ for example as saving, I suggest you keep 33% of it in safe deposit, invest 33% in secure stocks, and take risk or do learning with 34%, so you wont loose all. \n\nIts better to start with any online company in the initial phase. and yes if you want to learn trading try to find some game or go to this website www.fxplayer.com or FXCM trading website become their member and start dummy forex trading, it will help you in understanding the logics and tricks of trading.\n\nIn this world, 5 things exist in all businesses.\n1- Seller\n2- Buyer\n3- Product\n4- profit/loss\n5- How quick you make a decision\n\nThe best TIP for any business like trading or anything that my dad told me is\n\nDon’t hold your stock or goods if you are getting some profit, cos you don’t know what price the next customer will offer you. \n\nWith my 15 years of business experience, when ever I go opposite to his direction, in 80% cases I never got the best price. Indeed experience counts a lot.
460933
They don't really buy the stock.  Normally, they can get stock options granted to them as part of their compensation package.  Usually, though, the exercise price of the options is above 0.  This doesn't really matter.  They're still getting "free" money in that they don't have to buy the stock on the open market.
379290
That's the definition.. but this is how they work:\n\nCall options: buy if you expect a stock to go up.\nPut options: buy if you expect a stock to go down.\n\nOptions were intended at first as insurance, you would buy option 'contracts' at a certain 'strike price' that would let you to buy 100 shares per contract at the specified strike price, regardless of whatever the stock was trading at. \n\nHowever, many people realized you can make A LOT of money by buying and selling the option contracts themselves. You can also lose everything. They have higher spreads (usually minimum of $0.10), and a lot more volatile since they're cheap. Use at your own discretion.
16637
About common stock, the market will set the price on common stock. The buyer puts bid price and the amount of stock he or she willing to buy. The stock holder puts sell price and amount of stock on sale. In the market, you can see bid price and sale price. Once the two price becomes the same, the transaction would make base on the amount of stock. When the transaction occur , the stock price will show on the market. \n\nOther stock type\npreferred stocks: Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Usually does not carry voting rights.This stock price is set by company.\n\nmarket price: A security's last reported sale price (if on an exchange) or its current bid and ask prices (if over-the-counter); i.e. the price as determined dynamically by buyers and sellers in an open market.
1066552
you would have to look at at history\n\nstock is something that you own a share of a company\n\nso exchanging stock for cash\n\nOther countries had such "exchanges" for many years. Belgium established the world's first in 1531. Amsterdam soon followed, with brokers conducting their activity on a street called Warmoesstraat. In 1602, under the Amstel bridge, shares of the East India Company were bought and sold. Money was raised here to finance the Pilgrim's trip to America.\n\nhttp://www.stocks-investing.com/stock-market-history.html
667301
There's sooooo much poor information here.\n\nWhen you invest in most stocks the Stock Exchange manages things so you are guaranteed to find a buyer if you're selling and guaranteed to find a seller if you're buying.  The large banks are granted favourable trading terms in return for being in the market and quoting a price to take those 200 MSFT shares off your hands.  They can drop the price they're prepared to pay when more people are selling than buying but they commit to being in the market and quoting a price most of the time.\n\nPink Sheets and Over The Counter are basically the same thing (the name Pink Sheets comes from the fact that closing prices were printed and distributed at the end of the trading day on pink paper).  It is a seperate market for stocks not quoted on the main market.  Basically, when you want to buy or sell a stock there is no guarantee there will be anyone prepared to trade with you.  The more popular stocks normally trade reasonably well but there are thousands of stocks on the OTC market that trade no volume for weeks at a time.  Most of the shareholders will be held privately and if no one is prepared to sell you're not going to be able to buy.  If you are able to find a seller you run the risk of paying a large spread (the difference between the buy and sell price).  On the main market the buy or sell price for MSFT will be the same.  On the OTC market the buy price for a stock might be $10 higher than the sell price.\n\nThe biggest danger is that something happens to the stock while you're holding it and you find yourself locked in.  If I buy MSFT I can sell the stock seconds after bad news is announced by going to my PC and logging onto my brokerage account.  If I hold OTC stock I can only sell my stock if there's someone out there prepared to buy.\n\nOTC stocks are not neceessarily up and coming, as with penny stocks choose very carefully.  Stocks quote on the OTC market for a number of reasons, and there are definately some bargains out there.  But it is much much more risky than the main market.
739164
You are correct.  If the price of the stock rises, the price of the call option will rise.  You can sell your call option and profit without having to exercise it.  The profit will usually be the same wether you sell the option or exercise and buy the stock and resell it.\n\nhth
557969
Hey, \n\nDont know about a book but here is a great article about the basics of stock trading: http://www.indiahowto.com/what-are-stocks.html\n\nThe coolest thing is that it is written completely from the indian point of view! Check it out, it is definately useful! \n\nCya\nHope this was useful
729205
Its because the market is constantly changing and thats what day traders try to capitalize on. Stocks make money through either capital appreciation (raises in value) or dividends (money paid out from company). Day traders usually do trades that run from a couple of thousand dollars to much more. They make their money by using the large amount of stock purchased with those thousands and then later sell them after capital appreciation. Meaning the value of the stocks went up and they sold them for more and since they bought so much stock those few cents turned into much more than even thousands in some cases. The reason its so risky is because stocks fluctuate meaning they also go down although historically the stock market continually rises. Hope that gave you an idea.
828864
Bids and Ask\n\nThose who want to buy shares place a price Bid\n\nThose who want to sell shares Ask a price.\n\nWhen the order is submitted and sold the price will change accordingly. The price you see is the most recent sale or buy order.
980134
Stock change is the difference between 2 prices.  The first price is usually the last price of the previous day or the first price of the current day.  The second price is the last price paid for the stock.  Subtract the first price from the second price to find the stock change.  Don't forget that your stock prices may be delayed depending on where you are getting your numbers.\n\nVolume: The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller then the volume for that period increases by 100 shares based on that transaction.