Defining Shares Trading

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Defining

LegacyFX Introduction

SHARES TRADING

DEFINING SHARES TRADING

SHARES TRADING REFERS TO THE BUYING AND SELLING OF STOCK IN A COMPANY, OR DERIVATIVES OF THAT STOCK. Each share represents a small portion of company ownership, so the more shares a person has, the more of the company they control.

Stock Exchanges The vast majority of shares trading takes place on stock exchan-

Shareholders can make a profit when the price of the shares they own increases. ges. There are many different stock exchanges in the world and only registered participants are permitted to trade with stock exchanges directly. For this reason, most traders use the services of a registered stockbroker to gain access to the markets.

Price Movements Shareholders can make a profit when the price of the shares they own increases. This happens when demand for shares in that company exceeds the supply of shares. When trading derivatives such as CFDs, it is also possible to profit from downwards movements in share prices by short selling, which means predicting a downwards price movement.

Dividends Shareholders can also receive dividends, which are regular payments of a percentage of any profits the company makes, calculated based on the number of shares held.

Shareholders can also receive dividends, which are regular payments of a percentage of any profits the company makes, calculated based on the number of shares held.

You can learn more about trading share CFDs, or contracts for difference, by visiting the LegacyFX blog.