Stock Market

Introduction

Universally investors are always hankering after various methods to transform their toilsome money into an amount that can make their coming future more wealthy and lavish in the shortest time possible. But there are very fewer options to the investors that actually provide them such results. Among these options we have Stock Market. An investment where it is possible to change your fate overnight. Its is the god of all investments. Most of the investors believe that investing in this market gives them an opportunity to get maximum return in shortest time. 

Stock Market's contribution to the companies

However, investment in stock market is remunerative; A question may strike an investor's mind before entering the world of a stock trader, that “How does this Stock Market works?”. This query can be solved by an experienced stock trader or a stock broker in a lot better way. The question may seem to be a lot more complex, but has a simple answer and can be easily understood.

Companies always seek for raising their capital for development purpose so as to gain higher profit for the organization. For this purpose they need minor investors and the best place to find them is at stock market. These companies, to proclaim themselves offers a number of shares (a part or portion of a larger amount which is divided among a number of people, or to which a number of people contribute) to the public through stock market.

Stock Market's contribution to the investors

From investor's point of view, Stock market and its day trading is a source or a medium through which they can have transactions, i.e. To buy or sell those stocks which they feel are affluent to them. The procedure of buying or selling of a stock can be done in real-time day trading, online stock market, etc.

It's easy to understand the fundamental working involved in stock market by understanding its role for stocks and a stock trader. To gain a better knowledge, it's important to learn the terms involved in the world of 'stock trader', 'stock broker', 'day trading', etc. that includes stock quotes and market capitalization.

Stock Quotes

Stock quotes is the most familiar term used in stock market. Stock quotes defines the prices at which the stocks are transacted in the market. An investor examines the stock quotes regularly through the information provided by the stockbroker or another stock trader throughout day trading. It helps to take better decisions related to stocks. Stock quotes are governed by various factors that include economical condition, market perception, trend of spending and trading, news and financial or technical report provided by the company or stockbroker to the investors.

Market capitalization (or market cap)

Market capitalization is something you will definetly come to hear while in a conversation regarding stock market. The term can be explained as the total value of the issued shares of a publicly traded company i.e. The overall value of the stocks that are offered in stock market.

Conventionally market caps are divided into following categories according to their overall value:

1.) Mega-cap :- Over $200 billion

2.) Large-cap :- Over $10 billion

3.) Mid-cap :- $2 billion–$10 billion

4.) Small-cap :- $250 million–$2 billion

5.) Micro-cap :- $50 million-$250 million

6.) Nano-cap :- Below $50 million

However, these values are not fixed and are needed to be adjusted over the decades due to some factors such as population change, inflation, overall market valuation (for example, $1 billion was considered as a large market cap in 1950 but now it is not very large), etc. and the values may differ for different countries. Different indexes use different numbers.

Buying / Selling of Stocks

After getting the knowledge of basic terminologies the next step is to learn the method of buying and selling of stocks in day trading or online stock market. The procedure of buying stocks requires an appropriate amount of investment from a stock trader. This amount is used to pay the total amount of the stocks brought along with the tax charges or the commissions included in the transaction. Investor chooses to open an investment account with the help of a stock broker. However, with the help of online stock market an online account for investment can be opened without involving any stock broker. After when the account is opened, the next procedure is to deposit funds in it for making the purchases. Stock buying can be done right after when the funding is done to the investment account. To sell out the stocks, the stock trader has to inform their stock broker about the quantity and the price of those shares. Whereas in online stock market the trader is required to enter the order to sell through their investment account.

Stock market needs practice and patience to be understood. There are often chance of facing failure at first as it requires time to understand its working and gaining some relevant skills in it. But the more you practice the more you get better. And once you start gaining experience, there is no one to stop you from succeeding.