Investors who buy shares actually buy a portion of the company. Shares provide certain rights to the owners but they have no obligation if the company defaults or faces a lawsuit. The stock may become worthless in a worst scenario, and that is the limit to the investor's liability.

1. Nailah Lovell S Banton - Stock Trading Information
Investors who buy shares actually buy a portion of the company. Shares provide certain
rights to the owners but they have no obligation if the company defaults or faces a lawsuit.
The stock may become worthless in a worst scenario, and that is the limit to the investor's
liability.
Companies issue shares to raise capital. Their cash requirements may be to meet the
demands of the expansion programs or to acquire new properties. The new shares are
issued at par value or at a premium depending upon the financial strength of the company.
Thereafter, the trends in the market play their part and the share value increases or
decreases accordingly.
Investors buy shares because of their belief that the company will grow and the value of
their shares will rise accordingly. In buying the shares of a newly floated company, an
element of risk is involved but the chances of great gains are there. For doing trade, the
company needs to be listed in the exchange. Generally, the investor engages the services of
a broker to do the trade. Each broker receives a commission on the sale, as per the rates
agreed upon between him and the client.
It is universally accepted that shares have many advantages over other forms of savings. A
shareholder has the rights to participate in major decisions of the company management.
Every share represents one vote. The shareholder is part of the profits or the losses of the
company. Profits are distributed in the form of dividends. The downside is, if the company
does poorly, share value will decrease and the dividends may be skipped.

2. Generally, share trading and economy of a country are closely interrelated. When the
economic conditions are good, the market is bullish. High economic production, low
inflation and low unemployment are the indictors of bullish conditions in the market. When
inflation and unemployment rise, bear market is round the corner. The intelligent investors
track various economic indices and share market trends to safeguard the investments.
The next important issue about share trading is the investor's psychology and fluctuations
that occur in share prices due to demand and supply. Investors rush for buying particular
shares, when they see price is rising. A falling price may have the adverse effect and the
investors rush to sell. To determine whether such fluctuations are short term, careful
analysis of the trading trends and the related information is necessary.
Both long term and short term strategies are popular but it depends on the financial
objective, of the investor. But you need to adopt a stock trading system to maximize profits
and keep the investments safe.
Expertise is possible through experience in trading. To sieve the essential from the
voluminous literature relating to stocks is not the easiest of the jobs. For a beginner, it is not
only desirable but absolutely essential to avail the services of a broker or a financial
consultant. Different types of strategies demand special study. A broker has better stock
trading information and he is in a position to advise you taking into consideration the size of
your investment. His advice will be invaluable to make proper decisions and prevent losses.
Role of Stock Exchanges
Those who have no money have the problem of earning money. Those who have money
have the problem of earning more profits with their money. To put it in financial terms, they
have the problems of investment. The moneyed individuals (no such term) are not
necessarily the best investors. The fear of incurring losses always grips the minds of the rich.
Nevertheless, the craze for increasing wealth seizes the minds of the rich people
Stock Exchange is the connecting bridge between the investors and the capital market-for
the companies planning business expansion to increase profits. The work of the broker is
not to function in a haphazard manner. He must plan for each investor, depending upon his
needs and the amount of investment. He has to create the suitable portfolio, to hit the
financial goals of the investor. He has to work-in tandem with the rules and regulations of
the exchange, and proves worthy of the trust reposed on him by the management of the
establishment on the one hand, and that of the investor on the other.
Most exchanges have a physical location (the necessity for this type of arrangement is
waning in this internet era), where dealers and brokers meet to finalize orders from
individual and institutional investors to buy and sell securities.

3. The volume of literature on shares that you find in the market is the direct outcome of what
transpires within the exchange. Prices of shares are raised, lowered, discovered and
rediscovered here on moment to moment to basis. The story within may not be the true
merit of the share, without. Since money transfers are done from one source to the other
on the basis of such transactions, the importance of exchanges can not be minimized.
Name a financial service and you have it, with the framework of rules and regulations of the
Stock exchange. It is also referred to as he Corporate Debt or Capital Market.
Three broad categories of the financial services provided at the Exchanges are:
The Public Debt Market: This is the market for government securities (also known as gilt-
edged securities). These are fixed interest bearing and dated securities. This market is
controlled by the Reserve Bank of India and Bankers to the Government.
PSU Bond Market: deals with bonds floated by Public Sector units, Nationalized Banks and
financial institutions to raise Tier II capital. Debentures floated by Corporate also come
under his category.
The Equity Market for floating of equity or preference share capital by corporate:
Once the investor buys the shares, they can not be en-cashed just as you do in banks for
fixed deposits, but through the exchange, you can sell or purchase them. The investments,
from this genre have liquidity. The profit (may be loss as well) earned on the shares is
disbursed to the investor as dividends, bonus shares etc. The prime goal of any financial
management is to increase the shareholder's wealth.
The role of the exchanges is to look after both the Primary Market and the secondary
Market. The former deals with new public issues of all categories of securities, bonds and
equity/preference shares. The secondary market deals with the day to day buying and
selling of securities of all types. Without being listed, one can not carry out transactions
relating to buying and selling of shares.