Education Equities Trading
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All you need to know about Equities Trading
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What is equities trading?
When you buy an equity (share), you're buying a small unit of ownership in a company. As such, you become a part-owner (or shareholder) of the company. Equity trading is the buying and selling of shares in hope of earning a profit.
Why trade shares?
Normally, you would buy shares in a given company in hope that the company would rise in value. As a company's value increases, so does the price of its shares, which could then be sold for a profit. If the company's value decreases, shares will drop in price and may have to be sold at a loss. As a shareholder of the company, sometimes, you might also be eligible to receive a portion of the company's profits in the form of a dividend.
Who deals shares?
- Investors, who focus on long-term value by building a portfolio to deliver returns over several months or years
- Traders, who try to capitalise on short-term movements, often by making many trades in a single day