Different Types of Stocks and Stock Markets
For a new investor, it is important to know the various types of stocks on the market and different markets, or different stock markets.
There are two basic types of stock:
1. Common stock
2. Preference Shares
Ordinary shares are "underlying shares" of companies that are directly affected by fluctuations in corporate profits and losses. These stocks are also distributed to the company's employees. While high risk is associated with common stock, they are also tools for high profits because they do not have fixed dividends. After the common stock, the preferred stock is assigned to the selected stakeholder. These shares hold fixed dividends associated with them and pay them regularly to stakeholders. They can be further divided into categories A, B and C with different prices, limits and dividends.
The preferred shareholder pays the dividend before paying the profit. If for some reason the company liquidates, its preferred shareholders can recover their funds and the ordinary shareholders may not. However, less profit associated with preferred stock
When the company's stock demand dropped significantly, the company issued shares segmentation. Here, investors can buy twice the stock value at the same amount. As demand increases, there may be a reverse split, which is just the opposite of stock segmentation. The actual location of the stock exchange is called Stock Exchange ]. There are two basic types of stock exchanges:
1. Physical exchange: for example, the New York Stock Exchange and the American Stock Exchange
2. Virtual / Online Exchange: For example, Nasdaq
The New York Stock Exchange (NYSE) has been operating since 1792. It is located on Wall Street and has strict rules for listing the company. The New York Stock Exchange lists large companies such as Coca-Cola, Wal-Mart and General Electric. The New York Stock Exchange is also known as the "auction market"; this is because investors, such as in the auction as the competition on the floor of the stock, and the share to the lowest bidder. Believe that the New York Stock Exchange's stock is less volatile and more stable.
The American Stock Exchange (AMEX) is another major physical exchange in Manhattan. The maximum listing fee for the exchange is $ 250,000 and the maximum consecutive annual listing fee is $ 50,000. AMEX's core business is Exchange-traded funds . In 1998, the American Stock Exchange merged with the American Securities Dealers Association (NASDAQ operator) into the "Nasdaq – American Stock Exchange Market Group". Compared to the New York Stock Exchange or Nasdaq, the American Stock Exchange has a free listing policy. Some companies listed on the AMEX are B & G Food Holding, Otelco Inc.
For Nasdaq, the deal is virtual or through the online network. Investors and stock traders trades and interacts over the Internet to virtually purchase and sell stocks. Therefore, Nasdaq does not exist trading floor. Nasdaq lists "technology giants" such as Microsoft, Cisco and Oracle. It is also known as the "dealer market", the deal is not through the auction, but through the dealer and seller to interact with the dealer. The highest listing fee for the exchange is $ 150,000 and the highest continuous listing fee is $ 60,000 per year. Therefore, the stocks listed here are more "growing"