Basic stock market terms and related information

About commodity market terms

New and amateur investors are likely to have plenty of questions in mind, when trying to enter the stock market. They are likely to be interested in understanding the basic glossary related to stock trading. According to the experts, there does exist some basic pre-condition which is to be understood clearly eager to make profits from this otherwise highly volatile market.

About the stock market

It is considered to be an ‘open-source’ public market that witnesses trading of shares of different companies listed with the country’s Exchange. The well established company like Stocks Earning can help newcomers to this volatile financial market to have a better grip on their knowledge and trade efficiently and effectively to make sure money with every transaction.

About shares

They are considered to be the basic unit involved in the stock market as well as the company’s personal unit that is offered to the general public. It can be rightly termed to be part of any organization, which is offered to the public to increase its working capital or to expand. Buying shares of the company, the investor is likely to become its partner, until he/she holds this investment. Shares are transferable to others, thus transferring the partnership right held to the potential buyer.

IPO

It stands for Initial Public Offering which is offered by the company to the potential investors, thus making part owner of the company. It is the company that fixes the initial share value.

Exchanges

They are termed to be the place from where trading services are offered by brokers who deals in stocks.

Market types

There are basically two types of markets that exist for investors to make their investments in, namely:

  • The Commodity market. It deals in trading various types of commodities such as crude oil, pulses, plantations, energy, non-ferrous & ferrous metals, bullion metals, soft and spice commodities including the agricultural market.
  • The Equity market (including stock, futures & options, cash, etc)

How share price is determined?

Share prices are determined based upon the company held assets, market value, ups & downs faced in the market and their market capacity. The Exchange itself can set the market price taking into consideration these above aspects.

How money is to be invested safely in this market?

As per the experts, one should not rush in with their investments in this volatile market. With no or very less damage, the chances of making money is also less and losses quite huge. Just because, the person has gone through a blog or web page on the stock market, does not necessarily mean that he has become an expert and can make good amount of money. Even experienced traders who have been in this financial domain for quite a long time, at times do get stumped with sudden volatility and fluctuation noticed in the market.

Moreover, to make profits and be on the safe side, it will be useful to buy few shares of different companies. Prior to making the investment in any company stock, it will be useful to consult the professionals, so as to take a safe and caution approach.