Investors buy products established on a group of securities with a prospect of earning a profit. This is what is referred to as an investment product. Investment security is based on many securities and covers a variety of investment objects. Online trading involves choosing a broker, platform and an investment product. Here are some of the investment products.
Once a corporation completes an initial public offering (IPO), the shares go public, and can then be transacted on the investment market. These markets are referred to as stock markets, and this is where sellers and buyers converge and decide on the value to trade the stock on. In the past, most of this exchange was done on the trading floor, however, with the introduction of online trading, the exchange is now done virtually and electronically recorded.
Stock exchange market is categorised as a secondary market. This is because existing shareholder-owners are able to transact with willing buyers. Companies do not buy or sell their own stock on the exchange market very often. However, sometimes companies may decide to buy back some of their stock, which rarely happens. This just means that when you buy a stock, you do not acquire it from the company; instead, it’s from people who bought them initially and are willing to sell them, specifically to make a profit. The same case applies when selling the share on a stock exchange market.
The stock market relies on individuals who ensure the continuity of bids and offers. These are the people responsible for matching buyers to an interested seller. Just like any other free market, the forces of demand and supply, tend to determine the price of any stock being traded. This is the reason for the fluctuations, or up and down movement, of the values on a trading platform. Stocks are a good item of investment, all you need is to identify the stock of a good company, and start trading.