Trading Stocks
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Transcript of Trading Stocks
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Stock Exchange
• A physical or virtual market for trading shares, bonds, warrants, etc.
• Stock exchange organizations represented by stock brokers (sell and buy stock on behalf of their customers)
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Listing Stocks
• Companies list shares based on listing requirements of the particular stock exchange.
• In the United States, stocks can be listed and exchanged on electronic communication networks due to the inter-market quotation system.
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Buying on Margin
• One way of financing stock is buying stock on margin.
• One buys stock with borrowed money
• The stocks are collateral for the loan
• Interest is charged on the borrowed money
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Selling
• Like buying, selling a stock Like buying, selling a stock requires a broker’s transaction feerequires a broker’s transaction fee
• After the stock is sold, the seller After the stock is sold, the seller receives all moneyreceives all money
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Technology and Trading
• Use of Computer-Mediated Communication (CMC)
Examples: laptop computers, cell phones
• Technological advances make day trading possible.