ONLINE TRADING-INTRODUCTION AND BASICS
It is said that Joseph Kennedy sold all his stock that was under hi ownership before the disastrous stock market crash of 1929 began. The day the crash started came to be known as Black Thursday. Investors faced huge losses, and the crash became known as one of the signs of the Great Depression.
In the days of Kennedy, only those who were rich and powerful could own stock. But nowadays a lot of people who are not of the higher class own stock as well. A person who has a computer and a certain amount of money and satisfactory financial history to open an account can make use of online trading to obtain the ability to make investments in the market. Gone are the days when a substantial fortune and a personal broker were required to trade in the stock market. The average person carrying out trading stock in the market is no longer a symbol of danger to come, as thought in the olden days.
But even though the market has become easier to access, online trading is not to be taken calmly. There are a lot of issues to be taken under consideration such as choosing an online brokerage, selecting a trading account which is suitable, making trades and the risk of fraud.
Basically, a share is a part of a corporation that gives you ownership in that particular corporation. This means that a person who owns a share has invested in the future of the company, and this investment continues as long as the shares are under his ownership. Share prices vary according to certain factors:
- Economic conditions
- Company performance
- The attitude of investors
When a company offers its share to the public for the first time it is known as an Initial Public Offering (IPO). The profit made by the corporation is usually shared with the shareholders, and this share of profit is termed dividend. Stocks that isuues dividend regulary are called income stocks. A company may also reinvest its profit in the business itself. This type of company has stocks called growth stocks.
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