Stocks are investments in a business
Stocks are investments in a business. When you own a stock, you own part of the company that stock came from.
For that reason, stocks are also referred to as “equity,” since you own a small part of the company.
Stocks fluctuate in price depending on how the company is doing. For example, if Company A just released an amazing new product that is selling like crazy, the prices for Company A stocks are going to rise.
Alternately, if Company A experiences falling sales, their stocks are likely going to fall as well.
“Trading” stock is a bit of a misnomer. All it really refers to is the buying and selling of stock for money. So whenever you purchase or sell your equity, that’s considered trading.
And there are two ways you can trade stocks:
Exchange floor trading.
This is the kind of trading you see on movies and television with all the people shouting on the floor of the New York Stock Exchange. It’s a bit of a complex process, but at its core, here’s how it works: You tell your broker to purchase stock from a company, the broker sends a clerk to the floor to find a trader willing to sell you the shares, they agree on a price, and you get the shares.
This is a much more intuitive process for individual investors. It most often comes in the way of online brokerage platforms that allow you to immediately issue a trade during trading hours. No more relying on screaming floor traders to pick up shares for you.
InnerBrokers gives you the opportunity to trade on more than 1200 assets.