DescriptionA stock broker or equity trader, or share trader is someone or company engaged in trading shares of stock. Share traders can be either an independent agent, an individual, a hedge-fund manager, an arbitrageur, or a stockbroker. These stock trading at large publicly listed companies can be via a dominant stock exchange.
Share trading shares on the share market may involve buying or selling shares at the open market, via a broker or by a designated agent. A stock broker is a person who buys and sells shares on the share market. Brokers can be either full service or discount brokers. A full service brokerage is one who provides comprehensive advice on share trading, including fundamental and technical analysis and advice on buying and selling stocks and options.
Share investors use shares to buy low and dump it when it increases in value to make money. It is not unusual for a Share Trader to hold on to a Share until it trades higher. A typical investor will usually buy and hold for several months. They may buy shares at one percent above market price then sell them for the same percentage below market price. This allows the investor to make money on capital growth or short positions.
On the other hand, short positions are entered when shares are bought and sold short on the stock exchange. Short positions are considered as riskier than long positions because it involves more potential losses. This type of stock trading is executed in a short period of time, typically one day. Traders use automated software programs to execute short trades, therefore reducing the amount of time they need to hold on to the shares. It is a good strategy that can lead to quicker capital growth.
Dividends are paid on a regular basis, usually monthly, to Shareholders. They make money on capital growth, which results in faster gains. It is advisable to research on dividend policy of a company before buying shares and participating in the stock market. The company’s dividend structure may vary from company to company, and it may change annually.
One of the main reasons why people choose to trade on the share market is so they can gain financial freedom. However, there are different types of investors in the market. There are growth investors, individual investors, institutional investors, and even pension funds who choose to invest in the share market to maximize their portfolio return. Some investors also choose to trade financial instruments traded on the share market to increase their financial flexibility, such as by making larger profits through trading shares on the stock exchange to gain interest or cash flow from the portfolio.