Online Stock Trading is a recent way of buying and selling stocks. Now you can buy and sell any stock over the Internet for a low price and you don’t need to call up a broker.
You can buy any stock and sell any stock and it doesn’t take much to get started.
All you need is a brokerage account and you can start an account with them for $500 and their commissions are only $7, so they are not expensive at all.
Once you have setup a brokerage account you then need to choose an investment method and then research different companies and then buy stock in the ones that you feel will go up because they are good sound companies.
So as you can see there are several benefits to online stock trading but let’s recap.
With online stock trading all you need is $500 to open a brokerage account, the brokerage commissions go for low brokerage from somewhere $7 and you can buy and sell your stocks from your home computer anytime that the stock market is open.
Well now that you know that you can do online stock trading with a minimal investment you should get started today and then start learning about the stock market and choose the stocks you want to invest in.
Keep trading and trade wisely and in smart way!
See ya soon!
Friday, September 24, 2010
What are Stock options?
A stock option is a specific type of option with a stock as the underlying instrument (the security that the value of the option is based on). Thus it is a contract to buy (known as a "call" contract) or sell (known as a "put" contract) shares of stock, at a predetermined or calculable (from a formula in the contract) price.
It is Having the Rights to purchase a corporation's stock at a specified price.
Infact There are two definitions of stock options.
1. The right to purchase or sell a stock at a specified price within a stated period. Options are a popular investment medium, offering an opportunity to hedge positions in other securities, to speculate on stocks with relatively little investment, and to capitalize on changes in the market value of options contracts themselves through a variety of options strategies.
2. A widely used form of employee incentive and compensation.In some Companies, Stock options constitute part of remuneration. Employee stock options are stock options for the company's own stock that are often offered to upper-level employees as part of the executive compensation package. An employee stock option is identical to a call option on the company's stock, with some extra restrictions.
Performance Stock Options are Options that vest if pre-determined performance measures are achieved. The performance goal (revenue growth, stock-price increases…) must be reached for the options to be exercisable or for the vesting to be accelerated.
Keep trading and trade wisely and in smart way!
See ya soon!
It is Having the Rights to purchase a corporation's stock at a specified price.
Infact There are two definitions of stock options.
1. The right to purchase or sell a stock at a specified price within a stated period. Options are a popular investment medium, offering an opportunity to hedge positions in other securities, to speculate on stocks with relatively little investment, and to capitalize on changes in the market value of options contracts themselves through a variety of options strategies.
2. A widely used form of employee incentive and compensation.In some Companies, Stock options constitute part of remuneration. Employee stock options are stock options for the company's own stock that are often offered to upper-level employees as part of the executive compensation package. An employee stock option is identical to a call option on the company's stock, with some extra restrictions.
Performance Stock Options are Options that vest if pre-determined performance measures are achieved. The performance goal (revenue growth, stock-price increases…) must be reached for the options to be exercisable or for the vesting to be accelerated.
Keep trading and trade wisely and in smart way!
See ya soon!
What is a Share ?
In finance a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. In British English, the usage of the word share alone to refer solely to stocks is so common that it almost replaces the word stock itself.
In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.
By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price.
A company's stock price reflects what investors think about the stock, not necessarily what the company is "worth." For example, companies that are growing quickly often trade at a higher price than the company might currently be "worth." Stock prices are also affected by all forms of company and market news. Publicly traded companies are required to report quarterly on their financial status and earnings. Market forces and general investor opinions can also affect share price.
Quick Facts on Stocks and Shares
Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer no
guarantee of any returns and can lose value, even in the long run
Investments in stocks can generate returns through dividends, even if the price
How does one trade in shares ?
Every transaction in the stock exchange is carried out through licensed members called brokers.
To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders.
The general investors should identify a sub-broker for regular trading in shares and palce his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it .
What are active Shares ? Shares in which there are frequent and day-to-day dealings, as distinguished from partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to economic and political events and are, therefore, subject to sudden price movements. Some market analysts would define active shares as those which are bought and sold at least three times a week. Easy to buy or sell.
Keep trading and trade wisely and in smart way!
See ya soon!
In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.
By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price.
A company's stock price reflects what investors think about the stock, not necessarily what the company is "worth." For example, companies that are growing quickly often trade at a higher price than the company might currently be "worth." Stock prices are also affected by all forms of company and market news. Publicly traded companies are required to report quarterly on their financial status and earnings. Market forces and general investor opinions can also affect share price.
Quick Facts on Stocks and Shares
Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer no
guarantee of any returns and can lose value, even in the long run
Investments in stocks can generate returns through dividends, even if the price
How does one trade in shares ?
Every transaction in the stock exchange is carried out through licensed members called brokers.
To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders.
The general investors should identify a sub-broker for regular trading in shares and palce his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it .
What are active Shares ? Shares in which there are frequent and day-to-day dealings, as distinguished from partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to economic and political events and are, therefore, subject to sudden price movements. Some market analysts would define active shares as those which are bought and sold at least three times a week. Easy to buy or sell.
Keep trading and trade wisely and in smart way!
See ya soon!
Tuesday, September 21, 2010
How Do your Pick Share That you Want To Buy?
The key here is to research, research, research! That’s the key to picking the winners. Granted, you’re not a qualified financial professional with access to the information available to equity analysts, however you can hire someone to pick them for you or you can do it yourself, with some research and basic information.
A stock broker isn’t what they used to be. The heady days of the 80’s pained a slimy and money-hungry picture of stock brokers but nowadays, with more safeguards for investors in place – stock brokering is a competitive industry – with brokers all vying for your investment dollar.
Stock broker, who?
There is much confusion over the term “broker”, as many believe this is the person that you consult and receive advice from when you want to trade shares – this is not the case. A broker is a stock broking firm and offer two main services. Firstly, a full service broker will offer personalised information and tailored advice. You can see them more like a financial planner that solely concentrates on equity. You can ask them for ideas or you can ask them for advice on portfolio mix. The benefit of having a broker is their access to information and ability to obtain shares in oversubscribed floats (when there are more buyers than sellers). This type of service costs around $150 per trade or for large trades, 2.5% of the total amount traded.
The second type of brokers are the “execution only” type, which have seen a great proliferation in recent years. They simply take your order and process the transaction. Typically, each trades cost between $15-30, substantially lower than with a broker.
Which broker should I choose?
If you are new to the game, it might be useful to start with a broker and establish if they add value to your own research. Be wary, as they are paid based on the volume you trade, therefore their incentives may not be linked to your benefits.
See ya soon!
A stock broker isn’t what they used to be. The heady days of the 80’s pained a slimy and money-hungry picture of stock brokers but nowadays, with more safeguards for investors in place – stock brokering is a competitive industry – with brokers all vying for your investment dollar.
Stock broker, who?
There is much confusion over the term “broker”, as many believe this is the person that you consult and receive advice from when you want to trade shares – this is not the case. A broker is a stock broking firm and offer two main services. Firstly, a full service broker will offer personalised information and tailored advice. You can see them more like a financial planner that solely concentrates on equity. You can ask them for ideas or you can ask them for advice on portfolio mix. The benefit of having a broker is their access to information and ability to obtain shares in oversubscribed floats (when there are more buyers than sellers). This type of service costs around $150 per trade or for large trades, 2.5% of the total amount traded.
The second type of brokers are the “execution only” type, which have seen a great proliferation in recent years. They simply take your order and process the transaction. Typically, each trades cost between $15-30, substantially lower than with a broker.
Which broker should I choose?
If you are new to the game, it might be useful to start with a broker and establish if they add value to your own research. Be wary, as they are paid based on the volume you trade, therefore their incentives may not be linked to your benefits.
See ya soon!
Are Ready you To Invest?
Your first investment might be frightening and exciting, because you do not know when or how to start investing. When you look at the historical prices of some shares, they have gone up and down, so how do you know when to jump in and start buying?
As a long term investor, the time horizon for your investment should be around 5 years, this is from the time you buy to the time you sell. Thus, short term volatility should not change your decision on when to invest. The markets will inevitably rise and fall, but short term volatility should not matter as long as the long term gains are there.
In an earlier section to this guide, we discuss the importance of diversification and share selection. The shares you select will form the portfolio in which you diversify risks. But firstly, you have to ask yourself some questions about your investment goals.
What is your time frame? 2 years, 5 years, 10 years? How risk adverse are you? (Are you willing to forego returns for a less risky investment?)Do you prefer capital growth over dividend yield (dividend payments)?
In answering these questions, it’s useful to know how shares are categorised, what their inherent risks and returns are:
Blue Chip – you hear this term in the media commonly and this refers to shares which are the most establish in terms of stability of earnings and history. They generally pay a steady dividend and maintain steady capital growth. These are deemed the least risky shares.
Income – these shares usually pay a larger dividend to attract investors who do not want to sell their shares to generate income. Because they are paying dividends, the usually grow slower due to lower reinvestment.
Growth – these are usually newly listed shares which have high growth and have little or no dividends. In lieu of dividends, investors receive a higher capital growth, as the company uses the profits to reinvest back into the business. In recent times, these have been typically technology and mining shares.
Cyclical – these are linked to the economic cycle which means when the general economy is performing poorly, these share will mirror the general economy’s performance and fall.
Defensive – these are the opposite of cyclical shares and usually perform in the same way despite the economy being in a recession. Typically, companies of this nature will sell good and services such as insurance, staple food and pharmaceuticals.
A mixture of the above share will provide good diversification in a portfolio, thereby reducing the risks.
As a long term investor, the time horizon for your investment should be around 5 years, this is from the time you buy to the time you sell. Thus, short term volatility should not change your decision on when to invest. The markets will inevitably rise and fall, but short term volatility should not matter as long as the long term gains are there.
In an earlier section to this guide, we discuss the importance of diversification and share selection. The shares you select will form the portfolio in which you diversify risks. But firstly, you have to ask yourself some questions about your investment goals.
What is your time frame? 2 years, 5 years, 10 years? How risk adverse are you? (Are you willing to forego returns for a less risky investment?)Do you prefer capital growth over dividend yield (dividend payments)?
In answering these questions, it’s useful to know how shares are categorised, what their inherent risks and returns are:
Blue Chip – you hear this term in the media commonly and this refers to shares which are the most establish in terms of stability of earnings and history. They generally pay a steady dividend and maintain steady capital growth. These are deemed the least risky shares.
Income – these shares usually pay a larger dividend to attract investors who do not want to sell their shares to generate income. Because they are paying dividends, the usually grow slower due to lower reinvestment.
Growth – these are usually newly listed shares which have high growth and have little or no dividends. In lieu of dividends, investors receive a higher capital growth, as the company uses the profits to reinvest back into the business. In recent times, these have been typically technology and mining shares.
Cyclical – these are linked to the economic cycle which means when the general economy is performing poorly, these share will mirror the general economy’s performance and fall.
Defensive – these are the opposite of cyclical shares and usually perform in the same way despite the economy being in a recession. Typically, companies of this nature will sell good and services such as insurance, staple food and pharmaceuticals.
A mixture of the above share will provide good diversification in a portfolio, thereby reducing the risks.
Why Should you Invest in Shares
If you are reading this beginners guide, it’s most likely that your savings are currently in a term deposit just sitting in the bank.
The theory behind investing your money is simple and a lot better for you than letting it sit under the mattress. In fact, hiding your money under the mattress actually makes you worse off, as inflation (remember your grand parents saying how they could buy a kilogram of lollies for 1cent in the 1940’s? That is because $1 now buys less than $1 in 1920 as the price of good and services rises) eats away at your savings.
What is a share?
So before you go spending your money in shares, you are probably wondering, what is a share? When a company wants to “go public”, they float their shares on the stock exchange, which raises “equity”. By going public, the company is selling a piece of their company to you. So when you buy a share, you own a proportion of the company, this is the “equity”. In return, the company takes your money and uses it to invest in their own projects, so the company can make money and sometimes pay a dividend or other benefits.
The share market in recent years has boomed. Returns on the (which is the top companies listed on the stock exchange have been as good, if not better than most other investments (such as bonds) in the long term, but more about returns later. Also, almost half of all Australians own shares because of the rewards, but with the rewards comes risks. To be a good investor, understanding the risks in the investment is the key to being a good investor. This is so that your purchase is a bargain and fewer unforeseen events occur to derail you from achieving your investment goal.
Why invest in shares?
When you look at the richest people in the world or the BRWs rich list, time and time again there is one characteristic most these people share. They own their own business. While it is possible to be rich by inheritance or lottery winnings, the chance of that happening to the regular joe is highly unlikely.
Now what has this got to do with shares? well, everything. Owning shares allows you to own quality companies. For example, if you had shares in the in any of the most renown banks, you are a shareholder and therefore a part owner of the the company. When these companies earn money, so will you (in the form of capital growth & dividends).
How much do you need to invest?
So how much do you need to start investing in shares? You can enter the market with as little as $500, however with this amount, brokerage cost (This is the cost you pay your broker to buy/sell shares, with discount brokers such as comsec and e*trade this can be as low as $19.95 - $29.95 per trade) will eat away a chunk of your money. Most people say it’s best to have around $10,000 so that you can have a relatively diversified portfolio of 5 shares with $2000 invested in each.
If you don’t have enough for this, it’s probably better to invest in a managed fund. As suggested above, when you are a first time investor, it’s probably a bad idea to put all your eggs into one basket. Manage funds allow you to diversify your investments for as little as $1000, though $2000 is more ideal.
Happy Investments!
The theory behind investing your money is simple and a lot better for you than letting it sit under the mattress. In fact, hiding your money under the mattress actually makes you worse off, as inflation (remember your grand parents saying how they could buy a kilogram of lollies for 1cent in the 1940’s? That is because $1 now buys less than $1 in 1920 as the price of good and services rises) eats away at your savings.
What is a share?
So before you go spending your money in shares, you are probably wondering, what is a share? When a company wants to “go public”, they float their shares on the stock exchange, which raises “equity”. By going public, the company is selling a piece of their company to you. So when you buy a share, you own a proportion of the company, this is the “equity”. In return, the company takes your money and uses it to invest in their own projects, so the company can make money and sometimes pay a dividend or other benefits.
The share market in recent years has boomed. Returns on the (which is the top companies listed on the stock exchange have been as good, if not better than most other investments (such as bonds) in the long term, but more about returns later. Also, almost half of all Australians own shares because of the rewards, but with the rewards comes risks. To be a good investor, understanding the risks in the investment is the key to being a good investor. This is so that your purchase is a bargain and fewer unforeseen events occur to derail you from achieving your investment goal.
Why invest in shares?
When you look at the richest people in the world or the BRWs rich list, time and time again there is one characteristic most these people share. They own their own business. While it is possible to be rich by inheritance or lottery winnings, the chance of that happening to the regular joe is highly unlikely.
Now what has this got to do with shares? well, everything. Owning shares allows you to own quality companies. For example, if you had shares in the in any of the most renown banks, you are a shareholder and therefore a part owner of the the company. When these companies earn money, so will you (in the form of capital growth & dividends).
How much do you need to invest?
So how much do you need to start investing in shares? You can enter the market with as little as $500, however with this amount, brokerage cost (This is the cost you pay your broker to buy/sell shares, with discount brokers such as comsec and e*trade this can be as low as $19.95 - $29.95 per trade) will eat away a chunk of your money. Most people say it’s best to have around $10,000 so that you can have a relatively diversified portfolio of 5 shares with $2000 invested in each.
If you don’t have enough for this, it’s probably better to invest in a managed fund. As suggested above, when you are a first time investor, it’s probably a bad idea to put all your eggs into one basket. Manage funds allow you to diversify your investments for as little as $1000, though $2000 is more ideal.
Happy Investments!
Share Trading
“Money is better than poverty, if only for financial reasons” – Woody AllenThe Money Guru;Woody Allen’s quip sums up this beginners guide to investing in shares. This is a good start to your education on investing – putting your money where it can gain greater returns than just earning interest in a high-interest account. Investments in shares or stocks (called stocks in the USA) can be daunting as there is vast and various amounts of information on investments and everyone is ready and willing to take your money. But in this guide, investing is not as complex as you’d think. This is also proven by the fact that Australia has the highest personal share investment in the world. This guide hopes to give you better information in which you can make individual tailored investment decisions, while also covering some basic finance concepts.
Doing all the research for this guide has also illustrated the amount of short rule-type guides to get rich quick. There are a plethora of guides; some of the ones I’ve seen are Ways to Make Saving and Investing Easier, Steps to Retire Rich, Rules of Wealth Building and Eight Secrets to Improving Your Portfolio Returns. Sure, you can read a guide which is a page long on how to invest your entire savings, but what you put in is what you get out. If you believe that reading a few of these guides will prepare you for investment then you should read this guide before you go any further. Investing is not as simple as these guides make it out to be, but you don’t need a PhD in quantitative statistics to figure it out.
This guide hopes to break down the jargon and seeming complexities of investing in the financial markets by making things as simple as possible. I will try my best to remove all the cheesy quips used by the media and to demystify the financial markets, which almost has as much jargon as it does quick rich schemes.
This guide is broken up into sections which should make it easier for you to get some answers and find specific information for the knowledge you need to start investing.
I wish you a better share trading!
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