You may have an interest to learn about investing and you have heard about how people make a lot of money from the stock markets. However, you don’t have much idea about how are stocks bought and sold. The term stocks are pretty much vague to you and you definitely do not want to lose your money by investing it into something that you don’t know much of.
The term stock market comes from the word “stock” and “market”. What do you understand about market? It is a place where the buying and selling activities takes place right? It is a place where people trade something for something else. While stock in this concept it means a share of a company.
Say a company has 10000 stocks and each and everyone of it is trading at $1, this makes the company now worth $10,000. If you own 5000 stocks it means you own half of the company and your money in the company is now worth $5,000. If the company are now valued at $20,000 instead of $10,000 doesn’t that means your 5000 stocks is now worth $1,0000 instead of $5,000 when the company is valued at $10,000?
Now you know about how the market works, it is the time you learn the simple terms in the stock markets. A bear market is when the prices are low in the market and the entire market seems to be declining. While bear market is the opposite of the bear market, where the prices are soaring high.
The stock market works with an organized mechanism where every single buying and selling transactions are carried out by a person who have the license to carry out the transactions and these people are known as brokers. When you decided to trade in the stock markets, you will need to go to brokerage firm and open a trading account before you can start trading in the stock markets.
You will be assigned to a broker that will help you to buy and sell your stocks in the stock markets on your behalf and they will earn a commission from the transactions.
However, if you do not plan to have a middleman to assist you in the stock markets, there is a service that allows you to have access to stocks all over world and you will be able to buy and sell stocks from anywhere around the world without the need of a middleman like a broker.