Stock Trading Explained
Your complete guide to investing in company shares
Learn everything about stock trading - from basic concepts to advanced strategies. Discover different ways to trade stocks and choose the method that suits your goals.
Search Stocks
Try: Apple, MSFT, Tesla, AAPL
What Are Stocks?
Understanding company shares and equity ownership
Stocks represent ownership shares in publicly traded companies. When you buy stocks, you become a partial owner of that company and gain certain rights, including potential voting power and claims to the company's assets and earnings.
Stock prices fluctuate based on company performance, market conditions, investor sentiment, and economic factors. As a shareholder, you can profit from stock price appreciation and may receive dividend payments if the company distributes profits to shareholders.
The stock market provides liquidity, allowing you to buy and sell shares easily during trading hours. This makes stocks one of the most accessible and popular investment vehicles for building long-term wealth.
Major Stock Exchanges
Where stocks are traded around the world
NASDAQ
United States
World's second-largest stock exchange, known for technology companies
9:30 AM - 4:00 PM EST
Apple, Microsoft, Amazon, Google, Tesla
NYSE
United States
World's largest stock exchange by market capitalization
9:30 AM - 4:00 PM EST
Berkshire Hathaway, JPMorgan Chase, Johnson & Johnson
LSE
United Kingdom
One of the oldest and largest stock exchanges in Europe
8:00 AM - 4:30 PM GMT
Shell, AstraZeneca, Unilever, BP
Euronext
Europe (Netherlands, France, Belgium, Portugal)
Pan-European exchange covering multiple countries
9:00 AM - 5:30 PM CET
ASML, LVMH, Airbus, Spotify
TSE
Japan
Largest stock exchange in Asia by market capitalization
9:00 AM - 3:00 PM JST
Toyota, Sony, SoftBank, Nintendo
SSE
China
One of the largest stock exchanges in mainland China
9:30 AM - 3:00 PM CST
Industrial and Commercial Bank of China, China Mobile
How to Trade Stocks
Different ways to gain exposure to stock markets
Direct Stock Purchase
Buy actual shares of companies through a broker or bank
Pros:
- Full ownership of shares
- Voting rights in company decisions
- Dividend payments
- Long-term wealth building
- No expiration dates
Cons:
- Requires full stock price upfront
- Limited to market hours
- Dividend taxes may apply
- No leverage available
Long-term investors seeking ownership
Price of one share (fractional shares available)
Stock CFDs
Trade on stock price movements without owning the actual shares
Pros:
- Leverage available (amplified returns)
- Go long or short
- Lower capital requirements
- Extended trading hours
- No stamp duty in some regions
Cons:
- No ownership rights
- No dividend payments (usually)
- Overnight fees apply
- Higher risk due to leverage
- Potential for larger losses
Active traders and short-term strategies
As low as $1 with leverage
Stock Options
Contracts giving the right to buy/sell stocks at specific prices
Pros:
- Lower capital requirement
- Potential for high returns
- Risk limitation (for buyers)
- Hedging capabilities
- Leverage effects
Cons:
- Complex strategies required
- Options can expire worthless
- Time decay affects value
- Higher complexity
- Limited availability
Experienced traders with options knowledge
Option premium (varies widely)
Stock ETFs
Exchange-traded funds that track stock indices or sectors
Pros:
- Instant diversification
- Lower fees than mutual funds
- Trade like individual stocks
- Professional management
- Various sector exposures
Cons:
- No individual stock picking
- Management fees apply
- Tracking errors possible
- Less control over holdings
Passive investors seeking diversification
Price of one ETF share
Fractional Shares
Buy portions of expensive stocks with smaller amounts
Pros:
- Access to expensive stocks
- Dollar-cost averaging
- Portfolio diversification
- Lower barriers to entry
- Proportional dividends
Cons:
- Limited broker availability
- Potential liquidity issues
- Fewer voting rights
- Some restrictions apply
Small investors and beginners
As low as $1
Why Trade Stocks?
Key advantages of stock market investing
Wealth Building Potential
Historically, stocks have provided superior long-term returns compared to other asset classes
Dividend Income
Many stocks pay regular dividends, providing passive income streams
Inflation Protection
Stock returns have historically outpaced inflation over the long term
Liquidity
Easy to buy and sell during market hours with transparent pricing
Ownership Rights
Shareholders get voting rights and say in company decisions
Global Access
Invest in companies from around the world and diversify geographically
Frequently Asked Questions
Common questions about stock trading
Top Stock Brokers
Find the best brokers for stock trading with competitive fees and advanced platforms.
Compare BrokersImportant Risk Information
Stock trading involves substantial risk of loss and is not suitable for all investors. Stock prices can be volatile and may go down as well as up. Past performance is not indicative of future results. You may lose some or all of your investment. Please ensure you understand the risks before investing.
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