Stocks are the parts into which the capital and property of a company is divided. Initial investors sell part of their stocks to get more capital for the company. Interested investors acquire part of the company’s property through shares and become co-owners in a percentage equal to the proportion of shares they have purchased.
Some companies go public to be able to offer their shares for sale to the public on a stock exchange. Among the most important Stock Exchanges are the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (Tokyo Stock Exchange) and, the London Stock Exchange (London Stock Exchange). While the shares are open to the public, this does not mean that anyone can buy them directly. The purchase or sale of shares must be made through companies authorized to operate directly on the stock exchange, commonly called stockbrokers or brokers.
Why trade in stocks?
In general, investors buy shares with the expectation that the price of the share will rise and they can sell it later at a higher price. If the stock goes up, you win. If the stock goes down, you lose. Today many brokers allow you to trade stocks online through specialized platforms for this.
Example: You buy ten shares at $ 20 each for a total of 200 dollars. After a year, you decide to sell the shares. At that time, the share may have risen or fallen in price. If the stock rose, for example, to 22, you will receive $ 220, less the expenses and commissions of the Broker. If, on the other hand, the stock falls and is quoted at $ 18, you will receive $ 180 less the Broker’s expenses and commissions.