How to buy and sell shares



Contents

  • 1 stock
  • 2 method of buying and selling stocks
  • 3 types of shares
  • 4 stock properties
  • 5 References

Stocks

Shares are considered an important source of financing , as many companies are interested in covering their financing needs by relying on shares, and the financial markets in the Arab world have witnessed an important activity in this period recently, which led to an increase in the volume of trading that indicates the interest of investors and enterprises in this type of Financial financing, [1] shares are defined as a type of equity that forms part of a firm's profits and assets . [2] Another definition of shares is the set of financial shares provided by the partners in founding the company . These shares contribute to the formation of capital , whether they are in-kind or cash shares. [3]

How to buy and sell stocks

The stock market is one of the markets available to all individuals in order to implement the operations of shares, as these operations contribute to achieving financial profits; therefore, beginners and new investors must be cautious while dealing with shares, and here comes a set of things that must be implemented to start buying and selling shares. : [4]
  • Choose the nature of control applied to personal equity deals , as a group of investors prefers to leave decisions regarding trading their shares to other people, but another group may prefer to carry out these transactions through their personal efforts.
  • Determine the amount of capital that will be used in financial transactions in the stock market , and the percentage of risk that can be assumed.
  • Choosing the broker who will provide assistance in investing the funds of the investor, as well as interested in analyzing the stock market, usually financial brokers get all the means that guarantee their control over the investment portfolios of investors, which contributes to completing the application form to participate in the stock market.
  • After obtaining approval for the request to invest money in the stock market, the owner of the financial account or the investment portfolio must provide sufficient financial financing to start trading the shares.
  • Buying and selling shares , including the following:
    • Specifying a limit for the purchase per share, at which the investor is willing to pay the value of the shares, and this contributes to ensuring volatile conditions in the market, and care must be taken in setting this price, as delay in setting it can help the investor get the price he wants.
    • Determining the purchase of shares in the market, which is the investor’s purchase of shares without paying attention to the nature of the prices established when making the purchase.
    • Buy stop; it helps determine the price of the operational stock, as investors use orders to stop the purchase when the decline is reached, as the stock moves in a different direction from its previous levels.
    • The sale of shares depends on the previous points used in determining and stopping the purchase of shares, and the selling price of shares must not be less than what the investor wants, but it does not provide any guarantees regarding the demand for shares, which may lead to selling the stock at a price less than what the investor wants, due to the volatile circumstances in Stock market.

Types of shares

Shares own a group of types, and they are distributed according to various criteria: [3]
  • Shares according to the shareholders ’share , divided into three types:
    • Cash shares: are shares that become ownership of investors after they have paid for them in cash, and represent financial shares invested in the capital of public joint-stock companies .
    • In-kind shares: These are shares that represent shares of an in-kind nature within the capital of companies, and are similar to cash shares with financial rules.
    • Incorporation shares: It is a right within the profits achieved through companies and has no nominal value, and is given in exchange for a government concession, and it is traded on the stock market on the basis that it is a corporate profit.
  • The arrows are according to the figure, and are divided into the following types:
    • Nominal Shares: Shares that bear the names of their owners, and contribute to proving their ownership of them in the companies' records.
    • Shares of the bearer: These are shares that do not bear the names of their owners, but it is indicated in them that the share is for the bearer (its owner) who is considered his owner with the companies, and its possession is an indication of his ownership of the share.
    • Stocks for order: are shares that contain the word for order, and are similar in their trading to the bonds used for the condition of the order, by relying on a method of trading called the endorsement.
  • The shares are according to the rights of their owners, and they are divided into two types:
    • Common Shares : They are shares of equal value and give investors equal rights without any other concessions.
    • Preferred Shares: These are shares that give their owners priorities in obtaining profits, and recovering the value of their payments from the company's capital when liquidated, as they provide many other advantages to their owners, and they are not available in ordinary shares.
  • Shares according to consumption or not, and are divided into two types:
    • Capital shares: are the shares provided by the shareholders of the company, and they only belong to them when the company is liquidated.
    • Enjoyment Shares: Shares that shareholders obtain after consuming their shares; that is, shares of consumed value.
  • Stocks are according to value, and are divided into four types:
    • Nominal value: It is the value of the stock shown in the instrument, and the nominal values ​​of shares constitute the capital of companies.
    • The value of the issue: the value in which the shares are issued, so any share may be issued with a value less than its nominal value, whether when raising the value of capital or establishing companies.
    • Real value: It is the share due of each share of the company's funds after deducting its liabilities and debts.
    • Market value: It is a value that is determined within the stock market, and it is exposed to various fluctuations that include the rise and fall according to many factors, such as the integrity of the financial position of the company.
  • Shares according to trading, and are divided into two types:
    • Security shares: are shares that are not tradable and offered by a member of the company’s board of directors, in order to ensure his management of them.
    • Trading shares: are all shares except for escrow shares, as shares can be traded by buying and selling them according to the regulations used in trading.

Stock properties

Shares are distinguished by many characteristics, the most important of which are: [5]
  • They are instruments of equal value, and this thing gives each share the same rights in the case of ordinary shares.
  • It is not permissible for a single share to have more than one owner in front of the company , even if the share becomes joint ownership of a group of heirs; however, this ownership, along with its validity, is not applied with companies, but the share must represent only one person.
  • Commercial trading is accepted when it is nominal shares, by transferring its records in the companies ’shareholders’ records, but if it is shares of its holder, its owner waives it by relying on its financial delivery.

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