Trading Stocks
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Stock exchanges allow companies to list shares for trading by stock brokers on behalf of customers. Companies must meet listing requirements to be included on an exchange. Investors can buy stocks using borrowed money, with the stocks serving as collateral for the loan. When a stock is sold, the seller receives the money from the sale after broker fees. Technological advances like laptops and phones using computer-mediated communication have enabled day trading by making information more accessible.
Trading Stocks
- 2. Stock Exchange A physical or virtual market for trading shares, bonds, warrants, etc. Stock exchange organizations represented by stock brokers (sell and buy stock on behalf of their customers)
- 3. Listing Stocks Companies list shares based on listing requirements of the particular stock exchange. In the United States, stocks can be listed and exchanged on electronic communication networks due to the inter-market quotation system.
- 4. Buying on Margin One way of financing stock is buying stock on margin. One buys stock with borrowed money The stocks are collateral for the loan Interest is charged on the borrowed money
- 5. Selling Like buying, selling a stock requires a brokers transaction fee After the stock is sold, the seller receives all money
- 6. Technology and Trading Use of Computer-Mediated Communication (CMC) Examples: laptop computers, cell phones Technological advances make day trading possible.