Explaining Share Dealing to Beginners

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Explaining Share Dealing to Beginners Powered By Docstoc
					Beginners have a lot of things to understand about share dealing when he
or she decides to enter this form of financial investment. If you are
going to ask me, I highly recommend that you start in the four (4) most
important aspects first. These are related to understanding what is the
share or stock, the basics of share dealing, platforms where they can be
trader as well as both of its pros and cons. These will be explained in
the following sections hereunder.

Overview of the Stock Market

On the one hand, one of the first things that any trader-wannabe needs to
know when it comes to share dealing is an overview of the stock market.
In this regard and in a general sense, the stock market is like a
platform where people, brokers and institutions can buy or sell stocks,
which refer to an ownership of a company. However, market in this
instance does not actually represent a physical place where trading takes
place. Instead, what this refers is the market for securities in the
sense that there is a demand for a specific security and indices.

The Basics of Share dealing

The basic principle of share dealing is similar to the ordinary trade or
the "buy and sell" type of transaction. What this means is that a buyer
will buy a security with an expectation that its value will increase in
the future so that his or her dividend would be higher or it can be sold
for a higher value. However, the rules and regulations governing this
type of financial transaction are more complex than the ordinary trading.
There are some specific rules that need to be followed within the whole
process of share dealing.

Platforms to Trade Shares

With the developments and innovations in this field as well as in World
Wide Web, there are already many ways that people can use in order to
trade. Nevertheless, shares and stocks are primarily traded in the stock
exchanges. However, you do not have to personally go there to be able to
trade and make positions. You can hire a broker and you will just give
instructions to them. Instructions can also be given through the internet
and even in mobile devices.

Advantages and Disadvantages of Share dealing

Any trade needs to know both the advantage and disadvantages of this type
of financial transaction. This is because this is the only way that
anyone can assess if it is indeed beneficial for him or her. In this
regard, among the advantages of trading shares include its rate of
return, acquisition of assets as well as the dividend yield. On the other
hand, its setbacks are the risks as well as the aspect of having enough
knowledge to the market and its unpredictability.

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