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Shares Trading? Everything You Need to Know

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Everything You Need To Know About Shares Trading

You may have heard of the term “Shares Trading” but you’re not exactly sure what it is. In this article, I will go in-depth about the things that you need to know about it. Who knows, after reading this resource, you might want to try investing in it as well.

What is Shares Trading?

Shares trading, also known as Stock Trading, is where you buy some shares of a particular company or among best stock trading company in Malaysia for trade. These shares are a legal representation of ownership of that company and you will also have the chance to attend board meetings if you become a bonafide board member of the group.

A company sells their shares by conducting an initial public offering or IPO. Any money that they can get from selling their stocks would be used as capital so that they can grow their organization.

Granted that startups want to have a lot of potential for growth, they want their companies registered on the major stock exchanges such as the NYSE or NASDAQ. But, in order for them to do so, they have to meet the stringent requirements first.

Granted that everything is met, they can start the process of IPO.

Who are the Players?

Because of the modern technology, would-be investors can now conduct trades on their own, with the guidance of a stockbroker, that is.

The participants that will conduct the trades are:

  1. Individual Traders– also known as private traders, they constitute the vast majority of investors in the shares market. Their sole intention is to make as much profit as possible.
  2. Hedge Funds– People who invest their money with the exercise of caution are under this group. Hedge funds are orchestrated by managers who do trades that have a safe outcome. They do that by buying as many shares from different industries (diversification) and looking at the market trends.
  3. Competitors– They constitute the minority; these investors would like to gain ownership of a company by buying most of its shares. They are usually wealthy people or the ones who are professionals in this field.

Share Pricing?

Each stock or share has different prices that depend on a number of factors such as:

  • Oil Prices – If the company relies on oil to fuel their production, it can also increase the price of their stocks as well
  • Interest Rates– This will entirely depend on financial institutions such as banks, for example.
  • New Laws– If there are new changes in the tax law, it can also affect the pricing of the stocks
  • Exchange Rates– Whenever a company makes international trades, the currency of the country of origin (meaning the country where the company is in) can have an impact on the total price. The better the exchange rate, the better the purchasing power of the company is.
  • Unpredictable Events– This includes events such as calamities, natural disasters, and wars. Case in point, after the September 2011 attack, the Dow Jones lost a sizable 7% of its share prices a day after the tragic event.
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