Investing in a stock market involves stock trading. Trading stocks refers to the buying and selling of stocks in the financial market. Trading usually takes place on the exchange floor of the stock market, where an investor approaches a stock broker to order stocks. The stock broker will then make the necessary arrangements for the investor’s orders, and alert the floor clerk. The floor clerk will then search for the floor trader from whom these orders may be bought. These chaotic scenes, which may be very familiar with most of us already as these are mostly shown in the television, movies, and news, are not really that complicated as the floor clerks already know where to find the traders who sell which kinds of stocks. Once the price is agreed upon between the buyer and the seller, the transaction will be good as done.
There is another way to invest in the stock market for dummies, as this is the easiest and more convenient method to trade stocks, and this is through electronic trading. Online or electronic trading allows the investors to trade stocks within the comfort of their own office. The online investor will be needing a computer and an internet connection to trade, and an online stock broker will also be required. The online stock broker will be the one to connect to the exchange network and look for a buyer and seller according to the order of the investor. Then the investor will be able to receive his confirmation just a few minutes after the transaction is done.
Once the investor buys a certain number of shares of stocks of a certain company, he will be considered as a part owner of such company. this means that any profit that the company gains will be shared with the shareholder as dividend. This also means that if the business fails, the investor will have to take the risk of suffering its loss as well. This is the bittersweet truth about stock investing for dummies to learn to understand. This just means that the stock market is really not for the faint-hearted.