Financial Instruments
Stocks
Stocks/shares of a company, represent ownership in the firm, which grant shareholders voting rights as well as a residual claim on company earnings in the form of capital gains and dividends. For example, an individual or entity that owns 10,000 shares of a company with 100,000 outstanding shares would have a 10% stake in it.
There are two types of shares: common and preferred. Common shares usually carry voting rights that enable the common shareholder to have a say in corporate meetings such as electing the board of directors or voting to appoint auditors.
Preferred shares have preference over the common shares because they receive dividends as well as assets in the event of the company’s bankruptcy / liquidation. As soon as a company gets established, it might need much larger amounts of capital for continuation and expansion. One way to do so is by selling shares to the public through an initial public offering (IPO). This changes the status of the company from a private to public where company shares will be held by numerous members of the general public.
Stocks
Stocks Trading
Investing in the stock market carries risk, but when approached in a disciplined manner, it is one of the most efficient ways to build up one’s net worth. The investment sentiment in stocks is said to swing between fear and greed.
Stock exchanges are secondary markets, where existing owners of shares can transact with potential buyers.
Once the company’s shares are listed on a stock exchange and trading starts, the price of these shares will fluctuate as investors and traders assess their intrinsic value. There are many ways to value stocks, but the most popular measure is the Price/Earnings (PE) ratio. The stock analysis also tends to fall into one of two camps—fundamental analysis, or technical analysis.
Stocks
Invest in Stocks CFDs
Today’s advanced technology has made it easy for companies to do business around the world and investors are no longer limited to what’s available in their local market. Stock CFDs or a stock contract for difference allows traders to profit off the price fluctuations of global stocks without actually having to own the stock outright. This makes international investing more accessible and cost efficient than traditional global equity trading.
Stock CFDs are not subject to international levies which makes them less costly. They also have lower commissions than buying international equities.
Also, they are available to trade outside of normal domestic trading hours and include access to large international markets.
Additionally, Stock CFDs are margined products. This means, by using leverage, traders can buy or sell with less capital. For example, a stock CFD with 20% margin, means only $200 is required to hold a $1,000 position. When used wisely, leverage can allow traders to act on opportunities restricted by insufficient capital or to profit from falling markets. Trading with leverage can amplify profits, however it can also amplify losses to the same degree.
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Stocks
Stocks Price Table
|
STOCK MARKET |
COMMISSION |
MIN. MARGIN |
|
US < 20 USD / share US > 20 USD / share |
5cps 0.28% |
10% |
|
EU |
0.30% |
10% |
|
UK |
0.30% |
10% |
|
AU |
0.30% |
10% |
|
JP |
0.30% |
10% |
