How Online Trading works :
A share of stock is basically a little piece of a corporation. Shareholders -- people who buy stock -- are investing in the future of a company for as long as they own his shares. The price of a share varies according to economic conditions of market, the good performance of the company and investors attitudes. The first time a company offers its stock for public sale is also called an initial public offering (IPO), also known as "going public".
When a business make a profit, it can share this money with these stock holders by issuing a dividend of money. A business can also save its profit or re-invest it by making improvements and increment to the business or hiring new people.Stocks that issue frequent dividends are income stocks. Stocks in companies that re-invest their profits are improved.
Brokers buy and sell stocks by an exchange, charging a commission to do so. A broker is simply a person who is licensed to trade stocks by the exchange. A broker can be on the trading floor or can make trades by phone or electronically.An exchange is like a warehouse in which person buy and sell stocks in market. A person or computer must match each buy order to a sell order . Some exchanges work like auctions on an real trading floor, and others match buyers to sellers electronically.
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