What is a stock?

Stocks are securities issued by companies to raise capital. Investors buy shares at the market price in the hope that their value will rise.

When a company does well, the stock goes up and investors make a profit. If the price falls, investors suffer losses.

Initially, trading stocks required actual ownership of the securities. In the 90s, CFDs (Contracts for Difference) appeared, which allow traders with small capital to trade on price changes in metals, indices, energy, forex and stocks without having to buy the securities themselves.

Advantages of stocks

Trading stocks requires analyzing news from companies such as Apple, Coca-Cola, Facebook, JPMorgan, IBM and Netflix. Keep an eye on global trends and economic indicators in the countries where the companies’ offices and production facilities are located. This will help you predict changes, such as unemployment rates or declining productivity.

Also pay attention to news in the company’s industry and follow stock indices that include stocks of companies in the same sector, such as industry or IT. High index quotations indicate that companies in that industry are doing well.