Make Money in the Stock Market

The stock market is a very volatile place to be in, and a novice can easily lose most of his money if he doesn’t exercise discipline. So for making returns on your investment in the stock market, you must have some basic knowledge. The stock market is basically composed of two markets – the primary market and the secondary market. It is important for you to have a sound knowledge of these two before taking the first step into the market.

Making Money in the Primary Stock Market

Whenever a new company wants to raise funds, or an existing company needs funds for expansion or any other purpose, they knock the doors of the primary market. It must be said here that an existing company can also offer right shares to its existing shareholders for more money. The shares of the company are issued by means of an IPO, where the subscriber need not pay any commission for acquiring the shares. The primary period for this purpose, is the entire duration starting from the date of application till the refund of money to people who were not allotted any shares. However, small companies opt for private placement of shares that raise funds privately from the public.

Making Money in the Secondary Stock Market

After the shares of the company who entered through the primary market are listed on the bourses, then one can freely enter and exit shares of that company. It is meant for trading as well as investing. The shareholders who are allotted shares after they applied for it in the primary market through an IPO can sell of their shares only in the secondary market. Unlike the primary market, one has to pay commission and brokerage for transacting in shares of the secondary market.

Functioning of the secondary market - Shares can be traded in once they are listed on the bourses. The broker of the issuer makes an announcement that the company is listed on the stock exchange and other brokers can transact in the shares of that company. The stockbrokers trade on the brokerage firm’s behalf in the Nigerian stock market. The brokers are members of the exchange.

For any individual to buy shares of any company, either through his own understanding of the company fundamentals or on the broker’s advice, he has to give a written mandate to the broker in this regard. Besides, he also has to fill a CSCS form of the shareholder and the transfer forms as well. This information is useful for the customer to receive regular communication from CSCS Ltd. and the Registrar. the broker issues a contract note to the customer, which contains all the details of the securities transacted in, including brokerage payable, etc. The owner of the shares can sell those if he feels that the shares are at a much higher price and he has got enough capital appreciation. Even in this case, a contract note is issued to the client by the broker.

So before investing in the share market, you must have a strong base of how things work, because you need to have a heart of steel to come out unnerved from the volatile and unpredictable nature of the stock market.

The Money Stock Market Exchange

A stock exchange is an exchange where security trading is conducted by professional stockbrokers. A stock exchange offers facilities for brokers as well as traders to buy and sell company stocks and securities. A stock market is also known as ‘share market' or ‘bourse' or ‘mutual organization.' It also provides conveniences for issuing and repurchasing securities in addition to monetary instruments and capital events including the payment of income and dividends. The stock exchange deals in the shares brought out by companies, unit investment trust and other grouped saving products and bonds.

Trading in the stock market is a lucrative game in which you can invest money, and make profits on a regular basis. However, it's vital that you must know the rules, regulations, and all-important conditions of the stock market. You can enter the stock market anytime, when it is open and make huge profits.

There is no limit how much stock you hold. You can buy as much as you can. The main intention of people embarking the market is to make big profits, but there are lots of risks all around. Before you start investing funds in the securities market, it is also significant to get an idea about “How does it (stock market) works?”

The stock market is the profitable place for companies' to raise money. Companies go public by offering shares to the public through the stock exchange. On the other hand, investors can make use of these stock exchanges to purchase and sell stocks of different companies that they are interested in.

Some of the money stock market exchanges are Bombay Stock Exchange (BSE), National Stock Exchange of India (NSE), New York Stock Exchange (NYSE), National Association of Securities Dealers Automated Quotations (NASDAQ), London Stock Exchange (LSE), American Stock Exchange, Australian Stock Exchange, Bolsa Mexicana de Valores, Euronext and many others. The different types of stocks that you can go for include penny stock, day trading stock,

The primary condition, which you may discover while ascertaining, how the ‘stock market' functions is ‘stock prices'. A stock price is the price, for which a particular stock sells, and this (stock price) is determined by various market constituents comprising the economy health, trading movements, costs trends, and economic or scientific reports bring out by a company or a self-regulating third party.

The other term is ‘market capitalization,' which is the company's value or the stock being offered. In order to compute the company's market capitalization, the formula is:

Total amount of outstanding shares X the price of the stock = market capitalization of the company.

After getting an idea about the essential features of the stock exchange, you will have to find out how to purchase and sell shares. In order to purchase a stock you will have to open an investment account.

In the majority of cases you will open an investment account with an agent, which does work at a local company. But nowadays you will open an online investment account, and do stock trading without the help of a (stock) broker.

After setting up your account, you will have to fund it ahead of making a purchase. Once your account is funded you will be capable of placing your order for purchasing stocks. When you want to sell your shares, you will either inform your broker that you would like to sell ‘X ‘ number of shares of the particular company, or you will need to enter a sell order through your online investment account.

The stock trading plans are the key to make stock trading triumphant. Ideal information of these stock-trading schemes explicates the mutations among profit and loss situation.

Internet has made the stock market investment process straightforward and speedy. It functions as a source from where investors simply discover the accurate and the instant information about financial markets in a just few minutes. It is a resourceful way to supervise stock business online, and this helps saving your money. In this way, online trading skill is one of the most excellent functions of Internet to the investor.