A thorough stock market introduction is fundamental in creating a sound foundation on which to begin trading. A market acts as a loose network which investors can use to buy, sell, and trade company shares and derivatives. Some shares are sold privately; however, the majority are known as securities and traded publicly on a stock exchange. With a world market value estimated in 2008 to be nearly forty trillion dollars, there is a great deal of money to be made if the trader is knowledgeable.
The networks that allow shares to be traded worldwide are the oil to the machine of global commerce. The next step in a sound stock market introduction is the concept of a stock exchange. Companies are able to sell shares in order to attain capital for various projects. Many of the leading Fortune 500 companies sold shares in order to fund expansions and product development, the investors that bought shares will collect revenue and dividends from the company’s profits.
Within any stock market introduction it is prudent to consider the risks associated with investing. The amount of stability will depend on the investor’s preference and tolerance for risk. In every trading firm the options exist to be as aggressive or conservative as a client is willing to be, this flexibility can make an investor rich, or be the cause of a great loss.
Due to the risk involved in trading commodities and securities, an individual who wishes to day-trade must understand that it is vital to their success that they understand the pro’s and the con’s. The lingo and terminology can be very intimidating and complex to untrained investors; it is easy to make mistakes that could be very costly without a thorough stock market introduction.
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