Facts About Stocks
In the financial world, stocks refers to all the stocks which have been issued and are controlled by the issuing company. A single share of such stock represents fractional ownership in fixed percentage to the amount of shares issued. Generally, there are two categories of stocks – common stock and preferred stock. Common stocks are those stocks which have been issued by the company itself and are listed on the New York Stock Exchange or the NASDAQ. Preferred stocks, on the other hand, are those stocks which have been personally guaranteed by the company and are listed on the NASDAQ. Both the types of stocks can be traded easily over the Internet.
In the United States, the two main stock exchanges are the New York Stock Exchange (NYSE) and the NASDAQ, both of which are operated by the American exchange group known as the Nasdaq. These exchanges are the only places where most stocks are traded. Over the Internet, however, stocks can now be traded from anywhere around the world through brokers who make their services available online.
Shares are considered as security when trading in stocks. The price of stocks is determined by supply and demand. If the demand for the stocks is high and the supply is low, then the price of stocks will be high. On the contrary, if there is a deficit between the supply and demand, then the price of stocks will be low.
Before a person can buy or sell shares, there are certain steps that need to be followed. First, an investor has to decide his investment objectives and the size of his capital. Next, the amount of shares to be bought or sold is determined. Usually, there are minimum requirements for initial purchases, such as the amount of shares or the initial purchase price. Usually, once these requirements have been met, the broker will be able to proceed with the transaction.
Once all these requirements have been fulfilled, then the stocks will be transferred to the buyer’s brokerage account. Usually, shares of any company are usually listed on stock exchanges where investors can buy or sell stocks. Stock markets differ in their system of pricing. One of them is the New York Stock Exchange, which is the oldest and largest stock exchange in the world.
Stocks are classified into two categories: common stocks and preferred stocks. Common stocks are those which are listed on the New York Stock Exchange and preferred stocks are those that are not listed on the New York Stock Exchange. In the United States, stocks are normally classified into three types: common equity, preferred equity and hard money. Rarely do companies go into the mutual funds category.