Advantages and Disadvantages of Stock Trading
Companies around the world issue shares to increase capital. When the company issues shares, the public can buy or sell the shares. These transactions are called stock transactions. There is always a broker involved. The prices of these stocks are constantly changing. It can rise, it can be a sharp decline depends on the market demand and the supply of power. Because coins have two sides, stock trading has its own advantages and disadvantages. Let us understand two aspects.
1. Good returns: If smart buying stocks, people can expect good returns. People can buy stocks when prices are low and sell stocks when prices go up. Therefore, by holding the stock can control the good returns.
2. Yi: the concept of stock trading is not very complicated. As a new investor, people can easily understand this trade and can make money through it.
3. A wide variety of companies are available. There are several companies that issue shares almost every day. The demand for buying stocks is high. With this vast variety, investors can choose one that best fits his strategy and planning.
4. Electronic Trading: Selection of the options to buy and sell stocks online through electronic trading. Agents are also involved here. A person can save time, fuel and energy with this option
5. Brand name: the company has the advantage of the shares. They can show the company's growth through stock price volatility.
1. Restricted Short: Yes, this restriction is faced by the trader in this case. Investors must wait until the price of a particular stock rises to be really short. It's like a trader's limit.
2. Loss: If the value of the purchased shares is not decreased as the value of the increase, people may face losses. A person needs to sell a stock at a higher price than the price of the stock. If he sells the stock at a lower price, it is always a loss to him.
3. Uncertainty: There are many uncertainties in stock trading. This is because a lot of things will affect the price of the stock. Such as government policy, political pressure, etc. can change the price of the stock. Therefore, everything is very uncertain. This is a risk trade with only two outcomes: profit or loss
People involved in this trade should always be ready to face the risks.