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What is the Security Market?

 

The securities market are places where stocks of publicly listed companies can be bought and sold over the counter or through the Central Exchange. The security market, also known as the stock market, has become its own free market economic mechanism. In this mechanism, companies have the ability to sell part of their ownership to interested outsiders in exchange for capital.

 

The security market or stock market provides opportunities for investors to increase their income. Through a market like this, investors do not have to pay a large amount of enterprise daily expenses and start-up costs, taking a high risk to set up their own companies, there is an opportunity to increase revenue. On the other hand, selling stock does help the company expand exponentially. When you buy stocks of a company, normally the company's wealth increases. Therefore, trading securities or stock markets, investors and company owners can achieve a win-win situation.

 

However, depending on the number of stocks bought, there is more or less negative risk, that is, in a trading environment, investors may lose money. When a stock trader’s holding company loses value, the trader loses money as well. If traders decide to sell his stocks when   the company loses value,  they will sell at a loss,He will sell at a loss.

 


Segments  of the stock market

 

Consider multiple components of the stock market when buying or intending to buy stocks in a listed company.

 

The stock market can be divided into two parts: the primary market and the secondary market.

 

The primary market

 

This is where securities were first created. This is an open market, where the company's stocks are bought and sold for the first time. Moreover, investors buy and sell directly from the issuing company. The first priority for a first-class listed company is to use its credibility to attract investors and open the door for those investors who want to buy stocks of the company. The primary market is mainly composed of large investment institutions such as investment Banks and hedge funds.

 

The secondary market

 

In the secondary market, investors trade the stocks themselves. Companies that had previously sold stocks were not direct participants in the transaction. Buying and selling stocks that are already held by investors is the basic concept of the stock market, even stocks are sold in the primary market as the initial stage of issuance.

 

The OTC market

 

The OTC (over-the-counter) market, is an option in which investors can buy and sell stocks in a decentralized market. Decentralization means that the buying and selling transactions will take place between two parties, for example, between traders and brokers. Trading usually takes place electronically, such as by phones, emails or trading platforms, rather than through a local stock exchange. In the OTC market, it is common to trade stocks and stock prices that are not normally listed on a stock exchange.

 


Stock exchange

 

A traditional intermediary in which securities such as stocks or bonds are exchanged between a broker and a trader. A stock exchange facilitates the issuance and redemption of financial underlying, including the payment of income and dividends. Other assets that can be listed on a stock exchange include derivatives, unified trusts, bonds and pooled investment products.

 

Main Stock Exchange

 

Local Stock Exchange

Region

Public Listing

New York Stock Exchange

New York, United States of America

Dow Jones Industrial Average

S&P 500

NASDAQ

New York, United States of America

Nasdaq

London Stock Exchange

London, England

FTSE 100 Index

FTSE 250 Index

FTSE 350 Index

FTSE SmallCap Index

FTSE All-Share Index

Borsa Italiana

Milan, Italy

FTSE MIB

FTSE Italia All-Share

FTSE Italia Mid Cap

FTSE Italia Small Cap

FTSE AIM Italia

Japan Exchange Group

Tokyo, Japan

Nikkei 225

Hong Kong

Central, Hong Kong

Hang Seng Index

Frankfurt Exchange

Frankfurt, Hesse, Germany

DAX

DAXplus

CDAX

DivDAX

LDAX

EuroStoxx 50

MDAX

Shanghai stock exchange

Shanghai, China

SSE 50 Index

SSE 180 Index

SSE 380 Index

SSE Composite Index

Euronext

Amsterdam, Netherlands

CAC 40

PSI 20

 

 


Stocks Investment

 

In addition to the obvious, investing and trading in a company's stock, there are several alternative ways to guide the establishment of trading strategies that have the potential to profit from investing in a company's stock.

 

Value investment

 

This is a simple investment strategy that selects stocks whose nominal value is lower than their intrinsic value to trade. These investors (value investors) actively seek undervalued stocks in the belief that they can get a return. This type of investment does not require a financial background, but it is recommended that you understand what trading is and have basic financial knowledge when entering any trading or buying a stock.

 

Price-Earnings Ratio

 

The calculation method of p/e ratio is as follows:

By taking the stock price of the company and dividing it by is earnings per share (EPS) = market value per share. The P/E ratio is a dollar amount that a trader can expect to invest in a company in order to receive one dollar of that company’s earnings.

Take the company's share price, divided by the company's earnings per share (EPS), equals the market value of each share. Pte ratio is the dollar amount a trader needs to invest in a company to make a profit of $1.

 

Dividend stock

 

Dividends are a way for a company to reward shareholders who hold shares in the company. Dividends are usually paid quarterly in cash. Dividends can be paid stably if the investment returns are good. At the same time, dividends themselves can become another opportunity to increase stock purchases.

 

This is a lower-risk, longer-term investment. These companies are generally financially stable with dividends increasing over time. Moreover, such companies promise to pay dividends on their stocks.

 


Stock trading

 

Swing trading

 

In stock trading, swing trading has become a very popular way of short-term trading. Swing traders typically hold positions for less than a day, but for up to two weeks. The goal of swing trading is to identify the overall trend, to sell and gain profits when the market is in a trend.  In swing trading, it is advantageous to monitor the rapid fluctuation at the market by means of technical analysis.

 

Intraday trading

 

Speculative buying or selling a stock, a certain commodity, a stock index, or a currency on the same day. Positions can be opened at the opening of the market or throughout the day, but all positions must be closed before the end of the trading day.  Traders who use this trading strategy are often referred to as day traders.

There are different types of traders, and you can be a longer-term trader or a shorter-term trader. If you trade in the short term, you will make more profits and there will be a greater risk of loss. This is a quick way to get in and out of a transaction in a short period of time.

 


Trading Stock CFDs at AvaStocks.

 

AVA has simplified the trading of stock CFDs, offering you not only stocks of world-renowned companies, but also leverage up to 20:1. We provide 24/5 multilingual customer service support, as well as a secure and stable trading platform. You can safely trade on the platform. In addition, the funds of all traders are kept separately in segregated accounts of international banks.


Trading CFDs entail risk and could result in the loss of your capital, not suitable for all investors