Trading shares is a popular way to invest money and earn returns. In this article, we will look at how global stock exchanges facilitate billions of dollars worth of share trades each day and how you can take part in the equities markets. Shares are traded on stock exchanges, which are markets built specifically to handle the buying and selling of equities. Almost every country on the planet has a stock exchange for public companies, and some have multiple. However, these stock exchanges are not open 24 hours a day, so you can only buy and sell shares when the exchange that they’re listed on is open.
The New York Stock Exchange (NYSE) is the biggest in the world by the value of the companies listed on it, which are worth over $30 trillion. The NYSE was founded in 1792, and notable stocks on the NYSE include Coca-Cola, Goldman Sachs, and Walmart. The NASDAQ, which is the second biggest stock exchange in the world, is also located in New York. Founded in the 1970s to facilitate electronic trading, today, it is the home of some of the world’s most valuable tech companies, including Apple, Microsoft, and Amazon.
The Tokyo Stock Exchange (TSE) is Japan’s primary stock exchange and the biggest in Asia. Nintendo, Softbank, and Honda are all listed on it. The London Stock Exchange (LSE) is around 450 years old, making it one of the most venerable in the world. The LSE is located in the UK.
Stock brokers are companies that invest in stocks on their clients’ behalf. Stock exchanges have rules on who can use them to buy and sell shares directly. For most individual investors, that means using a broker. There are three main types of stockbroker: execution-only, advisory, and discretionary.
When a private company decides to list and go public, they’ll join a stock exchange in a process known as an Initial Public Offering (IPO). This is when a company’s stock is first issued. Markets often get excited by IPOs, as this is the first time retail investors can take their view on a company. Public companies are subject to more regulations than private ones, so preparing for an IPO can take some time. Once a business is ready to list, they’ll typically offer their stock at a set price, and investors can apply to buy shares. Once the listing is complete, shares in the company can be bought and sold as normal.
You will often see prices for listed shares in the form of tickers. Stock ticker symbols are a shorthand way of writing the names of stocks when listing prices, usually consisting of the exchange a company is listed on followed by a few letters to designate its trading name. A company’s market cap (short for market capitalization) is the total value of all the outstanding shares it has on the market. To calculate a stock’s market cap, you take the total shares it has available for trading and multiply it by its current share price. This gives you the stock market’s value of the company as a whole.
Share prices are constantly moving as demand fluctuates for different economies, industries, and companies. There are several factors that are likely to cause stock market volatility, such as earnings, news about a company, external factors, and corporate actions. For example, positive or negative headlines surrounding a company will often play out on its share price. New product announcements, changes in management, or scandals can all cause demand to rise or fall.
In conclusion, trading shares can be a lucrative investment option. However, it’s important to understand the risks involved and how the market works before investing your money. With the right knowledge and guidance from a reliable stockbroker, trading shares can be an excellent way to earn returns on your investment.
