Stocks trading
TRADING STOCKS
Stock trading has become one of the most popular and efficient ways to make money since it is easy to access and it could bring a lot of money back to investors. With some extra money, anyone can purchase stocks from a company or corporation and make profit.
A stock is basically a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings. There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. Owning a stock means that a stockholder (person that owns the stock) has a claim to a part of the corporation’s assets and earnings. We could say that shareholders are owners of a corporation. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. The higher number of stocks a person owns, the more benefit he/she will get. People that purchase stocks would have the following advantages and disadvantages:
Advantages:
-They would be able to gain a large amount of money
-The potential loss from stock purchases with cash is limited to the amount of the initial investment.
-Stocks offer limited legal liability
-Most stocks are very liquid (they can be bought and sold quickly at a fair price)
-Investment diversification (purchasing stocks from more than one company could reduce the risk of losing money)
Disadvantages:
-Since common stock represents ownership of a business, stockholders are the last to get paid, like all other owners. A company must pay its employees, suppliers, creditors, maintain its facilities and pay its taxes. Any money left can then be distributed among its owners.
-While shareholders are company owners, they do not enjoy all of the rights and privileges that the owners of privately held
Stock trading has become one of the most popular and efficient ways to make money since it is easy to access and it could bring a lot of money back to investors. With some extra money, anyone can purchase stocks from a company or corporation and make profit.
A stock is basically a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings. There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. Owning a stock means that a stockholder (person that owns the stock) has a claim to a part of the corporation’s assets and earnings. We could say that shareholders are owners of a corporation. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. The higher number of stocks a person owns, the more benefit he/she will get. People that purchase stocks would have the following advantages and disadvantages:
Advantages:
-They would be able to gain a large amount of money
-The potential loss from stock purchases with cash is limited to the amount of the initial investment.
-Stocks offer limited legal liability
-Most stocks are very liquid (they can be bought and sold quickly at a fair price)
-Investment diversification (purchasing stocks from more than one company could reduce the risk of losing money)
Disadvantages:
-Since common stock represents ownership of a business, stockholders are the last to get paid, like all other owners. A company must pay its employees, suppliers, creditors, maintain its facilities and pay its taxes. Any money left can then be distributed among its owners.
-While shareholders are company owners, they do not enjoy all of the rights and privileges that the owners of privately held