Trading equities is the selling and buying of company shares or stocks, which are also referred to as equities on the financial market. There are a few ways in which one can invest in equities. Typically equity trading refers to both the purchase and selling of publicly-traded company shares through a stock exchange or in the form of over-the-counter products.
Every country comes equipped with its own organized market, also known as a stock exchange. On these exchanges, the shares of listed companies are purchased or sold. These shares can vary across industries or sectors, and each stock exchange comes with its own trading hours. Trading hours apply mainly to the weekdays while closing on the weekends, although this varies based on the country’s timetable.
How to get into trading equities
There are many ways one can get started with equity trading. The various ways in which one can trade equities are detailed below.
- Day Trading: The short-term strategy involving the analysis of the share’s price movements with the goal of closing one’s position by the end of the trading day. Day trading requires that traders become alert and quick in their transactions since they aim to profit from small price movements in a volatile market. Since there is often a lot more liquidity in volatile markets, traders find themselves entering and exiting the market often.
- Options vs Equity trading: Options are derivative contracts that can easily be used to trade stocks and shares at a future point in time, at a prespecified price. The orders placed for options are typically conducted in the same way as those of equities. With buy or sell offers, transactions between both the products work alone similar means. However, all options tend to have a date of expiration, while equities can be held for an indefinitely long time. To add to this, options trading often does not give traders the right to earn from dividends or any ownership over their assets. On the other hand, equity trading offers opportunities for both of these.
- Socially trading equities: Another way to get into trading equities is social. This is where beginner traders use information and strategies from other traders that they observe online. This is known as social trading and makes for a particularly effective method for beginners since they mirror professional investors. Since the stock market can be particularly volatile, social trading is a great way to get used to a stock market trading platform and figure out the strategies you can use when you trade on your own.
Equity trading is straightforward but it carries risks. Ensure you conduct your own research and equip yourself with the basics of equity trading. The first step is simply to open a live account so you can begin stock market trading. Most online platforms come equipped with sections for both news and analysis which are updated daily by professional market analysts. Such an account also comes with exclusive features like a trading forum, a slew of indicators and tools, fundamental reports, and more.