How Stock Market Works

Millionaire ActsEscape the Rat Race and Join My Journey to Financial Freedom

HOME ABOUT TYRONE SOLEE BLOGROLL ADVERTISE GUESTBOOK PRIVACY POLICY SERVICES Today is Thursday, May 15, 2014

How Stock Market WorksPosted On Sunday, 21 Dec 2008 By Tyrone Solee. Under Investments Tags: invest, money, stocks

In my effort to further educate newbies in the field of stock market, I initiated this

article for stock market beginners. You may call it Stocks 101 or Stocks for Dummies.

First and foremost, what is the stock market? A stock market is an avenue for

companies and corporations to offer their shares in the public. Once a company

listed their shares in the stock market, then the public is free to buy and sell those

stocks. It works in a similar way to how you might sell and buy gold. So what’s the pros

and cons of a company in listing their stocks publicly?

Pros:

1. To raise capital. Companies hire an advisor called underwriter to formulate the

Initial Public Offering (IPO) price of the company’s stock depending on several

factors. Then executives of these companies will conduct a roadshow usually out of

the country to entice foreign investors to buy these shares. The IPO price is the

starting price of the company’s stock in the stock market when it first traded publicly.

An oversold stock mean that it did well in its initial public offering. It means that a lot

of investors bought the stock. It can be twice or thrice oversold depending on the

turn out of the IPO.

2. To know the market value of a company. One way to easily know the market

value of the company is by knowing the price of its stock. This in turn will be multiplied

by the total outstanding shares that the company holds. Here in the Philippines, the

largest company in terms of market value is PLDT.

Cons:

Since the company’s stock is now open for public, it can be subject to several

external factors. Investors can now play its stocks. It can now be a subject for scrutiny

by investors and analysts. Also, it can be a subject for manipulation. A company that

did well, meaning, it beats analysts estimates on its earnings and profits will probably

go higher as investors buy these shares. In contrast, those that did not meet or has

some problems in liquidity, credit, labor, compliance, etc. will be dumped by the

investors that will lead to the so-called ‘equity dry up’. This led to the recent

bankruptcy of Lehman Brothers.

So much for the pros and cons, we will now get into the basics of the stock market.

Once a company listed its shares in the stock market, this will be represented by a

so-called Ticker Symbol. A ticker symbol is a short-cut name of the company. You

won’t see the long name Philippine Long Distance and Telephone Company in the

stock market. It may be hard to memorize and to recall. Instead, it is represented by

the ticker symbol ‘TEL’.

Forex PracticeAccount

netotrade.com

Improve Your Trading Skills

with $50,000 Free Practice

Account, Join

Search Here...

About Us

Millionaire Acts is a personal finance blog authored by Tyrone

Charles Solee as he shares his learnings and passion in money

management and investments. Join his journey to escape the

rat race towards financial freedom by subscribing below.

Related News From This Category

Subscribe

Enter your email address:

Delivered by FeedBurner

Video: How I Earned My First Million (TV Guesting)

Video: TV Appearance At Kapuso Mo Jessica Soho

The Prize of Delayed GratificationThursday, 01 May 2014

It's that time of the year once again. Most companies

have ended their fiscal years ...

Date a Girl or Guy Who Invests!Thursday, 14 Feb 2013

Happy Valentines Day to all! For all lovers and

couples, this is the best time ...

2013 Philippine Investment OutlookWednesday, 30 Jan 2013

It's more fun investing in Philippines. This is perhaps the

most applicable tagline for investors ...

The Importance of Variable Life InsuranceMonday, 14 Jan 2013

When you hear the words 'life insurance'? What does

it mean to you? Does it ...

UITFs and Mutual Funds – A Closer LookSaturday, 10 Nov 2012

UITFs and Mutual Funds have been one of the best

ways to invest your money ...

How Stock Market Works | Millionaire Acts http://www.millionaireacts.com/404/how-stock-market-works.html

1 of 11 5/15/2014 11:44 AM

An index tracks the movement of the stock market. The ups and downs of an index

depends on the movement of the price of the stocks. You usually hear the index

went up or down by so and so points. Different countries have different names for

their indices for easy identification. In US, there are three indices. These are called a.)

Dow Jones Industrial Average or DOW or DJIA. b.) NASDAQ and c.) S&P 500. In

Japan, they called their index ‘Nikkei’. In Hong Kong, they call it ‘Hangseng’. In UK,

they call it ‘FTSE 100′. In Germany, they call it ‘DAX 30′. Here in the Philippines, they

call it ‘Phisix’.

Someone asks, is there a minimum amount to buy stocks? The answer is yes! Here in

the Philippines, it usually takes a capital of Php 25,000 to open an account but some

online trading platforms require just Php 5,000. All stocks have a minimum number of

shares that each investor needs to comply. This is called Board Lot. The purpose of this

is to avoid ‘odd lots’ and to facilitate easier trading. This depends on the price of a

stock.

The movement of stock prices is also subjected to ‘fluctuations‘. This is also

dependent on the price of a stock. Here in the Philippines, a stock with a price of 101

and up per share is subject to a fluctuation of 0.10. It means that it can move to a

multiple of 0.10, lower or higher.

The table below tells the board lots and fluctuations of stocks here in the Philippines

which are both dependent on its price:

When you buy or sell stocks, you placed a so-called Order. A ‘buy order’ mean that

you requested to buy a stock at a specified price. A ‘sell order’ mean that you

requested to sell the stocks that you currently holds. Every order is represented by a

price and volume. By volume, it refers to the number of stocks that you want to buy

or sell. By price, it refers to the buy or sell price that you want. All these orders will be

requested thru a stock broker. A stock broker will receive all these requests and will

post it in the stock exchange. Once an order materialized, it is called ‘matched

order’. Meaning, if you posted a buy order of 100 shares of TEL stocks at the price of

2,000, then another person posted a sell order of 100 shares of TEL at the same price

of 2,000. And so your order has been matched! If you posted beyond the trading

hours, then it’s called ‘off-hour order’ and your order will be exercised the next

trading day. If you don’t have sufficient funds to buy a stock, then it will be a

‘declined order’.

Stock market is like any normal store. It has operating hours called trading time or

trading hours. Depending on the country, the stock market normally operates from

9:30AM to 12:30 Noon. Some countries like Japan operates from 9AM to 3PM.

You’ve been hearing a lot about bear and bull markets. What do these terms mean?

A bear market is a stock market where there are a lot of sellers than buyers. By law of

supply and demand, since there are a lot of supply, in this case sellers of stocks, then

the stock price will be bound to go down. Why is it called a ‘bear’ market? Just look

how bear attacks. It fights by using its claws in the ‘downward’ position. In contrast, a

Categories

business franchise

Entrepreneurship

Finance Concepts

Income Opportunities

Investments

Make Money Online

Networth

On the Spotlight

Personal Finance

Rags to Riches

Entrepreneur

Reader Email

Self-Motivation

Tips

Public Exposure

Blog World Philippines

2010

Good House Keeping

Magazine April 2011

Good House Keeping

Magazine July 2009

Good House Keeping

Magazine July 2011

Good House Keeping

Magazine June 2011 on

Micro Loans

Good House Keeping

Topics

billionaires blogfeatured

Businesscredit cardsdebt settlement

entrepreneur

story financefinancial planfranchise opportunities

goals Guest Postinsurance

investkiyosaki MakeMoney Online

millionaires

money mutualfunds networkmarketing

Networthpersonalimprovement

positivemindset realestate retirement

Like Us On Facebook

Millionaire Acts

2,546 people like Millionaire Acts.

Facebook social plugin

LikeLike

Favorite Sites

Estate agents - Hamptons

ZoomTrader Review


2 of 11 5/15/2014 11:44 AM

stock market called a bull market is characterized by a lot of buyers than sellers. This

is again by using the law of supply and demand. Why is it called a ‘bull’ market? Just

look at how bulls attack. They have this set of thorns in the ‘upward’ direction when

they fight with an enemy. When there is a bull market, stock ‘rally’.

A blue chip stock is a stock of a well-established company having stable earnings.

The term ‘blue chip’ came from casinos where blue chips represent counters with the

highest value. During trading, a stock can be called ‘most active’, ‘top gainers’ or

‘top losers’. A stock belonging to the most active list is a stock with a lot of buyers and

sellers. These set of stocks are also called ‘movers’. Top gainers’ list are stocks with the

highest gain in a single trading day while top losers are stocks with the highest loss in

a single trading day.

A stock that belongs to the list of most active, top gainers and top losers is usually

determined by its market volume and market value. A market volume refers as to

how many shares were traded in a particular trading day. A market value, on the

other hand, refers to the monetary value of all those traded stocks. You usually hear

reports of, for example, 3 Billion shares with a value of 1.5 Billion ‘shook hands’.

You usually notice a color associated with a stock during the trading. This indicates

the movement of a stock. A color red means that the stock is going down. A color

green means that the stock is going up. And a so-called unch, meaning a stock that

did not went up or down, is represented usually by a black or white.

Now why do investors buy stocks? Well aside from the ‘buy low and sell high’ strategy

called capital gains of making nice income from it, a stock gives ‘dividends‘. These

are profit shares given by the company for investors who bought their stocks. All

companies listed in stock exchange disclosed their dividend pay-out. This declaration

commonly involves two dates: The ‘Ex-Date’ and ‘Payment Date’. The Ex-date is the

date on which you should have acquired the said stock. The Payment date is the

date at which the dividend will be paid. Dividends may come in two forms: Stock

dividend and Cash Dividend.In order to illustrate more of this, let’s view the example

below:

- Ayala Corp. (AC) declared to give 20% stock dividend declaration ex-date June 1;

payment date July 31. Cash dividend of Php 5.75 per share ex date September 1,

payment date October 30.

- As an investor, if you want to take advantage, acquire as much stock as you can

before the ex-date. If the investor bought 100 shares of AC before September 1, the

he/she will have 120 shares by June 1. Aside from this, if he/she retained the said

stocks then he/she could have probably earned an additional Php 690 come

October 30.

One last way of earning from stocks is the so-called ‘stock rights’. It is the the option

given to the present shareholders to buy additional shares of stock at a price lower

than its market price. This is an additional opportunity for those who hold stocks of a

company and one way to raise additional capital for the company.

Historical values of a stock also play an important role in assessing whether the value

of a stock is cheap or expensive. A 52-week high means that it is the highest price of

the stock achieved in a span of 1 year. Consequently, a 52-week low means that it is

the lowest price of the stock achieved in a span of 1 year. A Year-To-Date (YTD) Yield

represent just how much the stock moved up or down starting from the start of the

year which is January 1. These two are both dependent on the present date and the

closing price of the stock (the price of the stock when the stock market closed). To

illustrate more of this, let’s view the example below. Consider the following prices as

the closing price:

- SM Investments had a 52-week high of 400 and 52-week low of 185. If for example

the date today is November 10, 2008, then the stock of SM achieved its highest price

of 400 and lowest price of 185 from November 10, 2007 to November 10, 2008, a span

of 1 year. In the case of YTD Yield, let’s say today the company has lost 35% of its

value. This just means the stock has fallen 38% of its value since January 1, 2008.

Magazine Sept. 2009

Manila Bulletin

Blog-O-Rama

Millionaire Acts Turns 1

Year Old

My First Financial Planning

Seminar

Rich Dad Asia Philippines

Event

Archives

Select MonthSelect MonthSelect MonthSelect Month

savingsSelf-Motivation SEO

shopping stocks

Tips UITFs

Alexa


3 of 11 5/15/2014 11:44 AM

Aside from the gauge of historical values of stocks, one way of assessing if a stock is

cheap or expensive is thru its Price-Earning Ratio or so called ‘P/E Ratio’. This is the

ratio of the stock price to the company’s earnings. The higher the P/E Ratio, the

higher the profitability of the company. BUT do not solely rely on this ratio. It may

indicate that a high P/E ratio means that the stock is overpriced.

You also hear the term ‘Technical Analysis’. This refers to the technique used by

brokers and analysts to predict the future direction of a stock. They use charts and

graphs and is usually based on the historical value of the stock. In using this, they can

somehow know when a stock is cheap or not. However, this is not 100% accurate as

no one can really predict the movement of the stock market.

Ok, we will now go to some terms that are used by analysts in stock trading:

Cost averaging – This means adding or buying more shares at a cheaper price and

disposing it at a modest price so that the cost will eventually average out with the

profit leaving a break even or a little income. This was a strategy to lessen losses. To

illustrate it, let’s see the example. I bought 200 shares of AC at 250 per share. The

stock went down to 150 per share. To take advantage of it, I will buy additional 200

shares. And so when the stock moved to at least a price of 200 per share, then I am

break even. If I had not done it, then I will incur a loss when I sell it at 200 per share.

Window Dressing – It is another strategy used by fund managers towards the end of

the year or fourth quarter. They buy stocks with attractive values and sell those ones

with beaten prices so that their portfolio will look good to their clients. To illustrate this,

a mutual fund company buys a stock whose trend is up and sell some of its shares in

another stock whose trend is down, even at a loss.

Short Sell – This means that you sell stocks that you don’t have at the time of the sell. It

is done with the intent of later buying the share at a lower price for a profit. Traders

usually do this when there is an expected decline of a stock. When the stock price

really went down, then the trader is well off. In contrast, when that expectation did

not materialize, then the trader loses money. Recently, this practice was banned by

Securities and Exchange Commission for manipulating the stock market.

Volatility – The volatility of the stock refers to its price movement. The larger the

movement of the stock, the more volatile it is. This means that a stock which moved

from 150 t0 350 then back to 250 per share in a span of 3 days is more volatile than a

stock which moved from 150 to 200 to 175.

Here is a short video from Youtube on How Stock Market Works:

To learn on what stocks to pick, you may view my article on what stocks to buy and if

you want to know some stock trading strategies, you can refer to my article on stock

trading tips.

To get articles, you can subscribe using your favorite RSS feed reader or have them

delivered directly to your email address.


4 of 11 5/15/2014 11:44 AM

Incoming search terms:

how stock market works

stock exchange for dummies

how stock market works in philippines

how stock market works in the philippines

how stock exchange works

phisix meaning

how the stock market works

stock market for dummies

bpi trade tutorial

how to play stock market in the philippines

What To Read Next

2013 Philippine Investment Outlook

Spending Money to Make Money

New Rules of Money: FOCUS

UITFs and Mutual Funds – A Closer Look

Stock Trading Tips

Advertisements

43 Responses To “How Stock Market Works”

Allen Taylor Says:

December 21, 2008 at 8:30 pm

Nice writing. You are on my RSS reader now so I can read more from you down the

road.

Allen Taylor

Reply

Admin Says:


Thanks Allen Taylor.

Reply

Dinah Says:

March 6, 2009 at 3:30 am

exactly what i need! thanks for a very well written post!

Reply

Jehzeel Laurente Says:

March 12, 2009 at 6:05 pm

now i have an idea. Mukhang marami pa dapat akong matutunan bago pumasok

dito sa stock trading raket, wah!

Reply


5 of 11 5/15/2014 11:44 AM

Jonha Says:

May 7, 2010 at 9:28 am

Pareho pala tayo! Wala akong muwang sa ganito pero sabi nga ni

Warren Buffet, “Why invest in real estate when stock market is easy”.

Mukhang madali lang talaga kapat you know the basics. Sa una lang

medyo nakakahilo siguro but eventually when you learn how the game

works madali nalang magpatuloy. Salamat dito kay Tyrone for this very

informative post. Exactly what I needed.

Cheers!

Jonha

Reply

RmR Says:


madali lang po sa stock market. mga kasambahay at driver nga ni bro

Bo Sanchez is into stock market din. pwede rin po nyo subukan muna

maglaro sa stock trading game ng PSE sa website nila(real time)… you

can buy & sell stocks using your “start up capital of 1M”. pero iba pa rin

thrill pag actual na. newbie in stocks po…

Reply

Jehzeel Laurente Says:

March 12, 2009 at 6:10 pm

i was enlightened ng konti. Ganun pala yung nakikita ko sa big screen sa may Ayala

Ave. Yung mga current stocks blah blah blah ng isang company, Tapos may value

doon at kung tumaas ba or bumaba ang stocks ng isang company (tama ba?

stocks ang tawag? or stock value? hehe). Di ko yun ma gets dati at nag tataka ako

bat pinapalabas doon yung mga number2x na di ko ma gets. Para pala yun sa mga

public stock holders at mga taong may paki alam sa stock market

sana ma22nan ko din to ng maigi. Magbabasa pa ako ng articles mo idol hehe

Reply

Ada Says:

November 10, 2009 at 8:26 pm

Sounds like you want to try this. Pasok ka na ba dito? hehe sabay tayu

LOLs

Reply

Jhesqi Says:

April 23, 2009 at 12:07 pm

Nice and informative post on stocks. Nag-blog din ako about the stock market in the

Philippine view. Bisita ka din if you have some time

Reply


6 of 11 5/15/2014 11:44 AM

Reps Says:

June 24, 2009 at 5:15 pm

now it clears my minds about basic stocks, you’re my on-line mentor. i have no one

to ask ideas about stocks but through the net and yours is an unselfish serving of

heaps and heaps of info about stock essentials, daghang salamat!ü added your site

in my fave list hoping to start in stocks within this year.

Reply

Renz S. Says:

March 5, 2013 at 11:48 pm

ako pod ako na sya gi-add na favorite list.. daghan salamat talaga

Tyrone. I hope you will be reps and myself’s mentor.. mahirap ang

landas ng “financial freedom” and “financial literacy” if mag-isa ka

lang and walang taong magaling na magtuturo sa yo o di kaya mag

guguide… Mentor us naman…

Reply

Tyrone Says:

June 24, 2009 at 5:25 pm

Hi reps, thanks a lot for the visit. I always try to write articles in a way that can easily

be understood by my visitors.

Reply

Crystel Says:

October 12, 2009 at 8:50 pm

Hi,

Thanks for sharing your wonderful knowledge. Glad to have people like you online.

Stock-trading “sounds french to me” and with your website’s help, I can always go

back and read all over again until it gets down to my head.

Many thanks.

Reply

Dawn Says:


Now I know why so many people love this site

Reply

Ricojake Says:

December 31, 2009 at 9:46 am

…add ko lang po: blue chip status depends on market capitalization. the bigger the

market cap the it is perceived as blue chip….

Reply

Karlgene Says:

February 12, 2010 at 12:57 am

very informative. just as I needed someone to ask about stock trading then i found

your site… it made my decision making easier… still need to learn more. i appreciate

your time and effort in putting up this article =)

Reply

Hoshi Says:

April 8, 2010 at 11:32 am

hmm this post is gonna be one of my references for my plan to invest in stock market.

thanks! i like it!

Reply

Jonha Says:

May 7, 2010 at 9:39 am

Tyrone,

Kung may schedule talaga ang selling at trading like day trading, kailangan ba

talagang tutok ka sa computer neto buong araw? Hindi ba pwede na part-time or


7 of 11 5/15/2014 11:44 AM

may pagka passive income lang itong stock investing?

Reply

Tyrone Says:

May 7, 2010 at 9:48 am

You don’t need to be necessarily in front of the computer. You can

invest for passive income in the stock market by buying long term and

blue chip stocks which gives dividends.

Reply

Jonha Says:

May 7, 2010 at 9:51 am

Tyrone,

So for a start, do you suggest to buy blue chip stocks and

hold it for a long term than short terms? Do you think it’s

best to start with Citiseconline?

Reply

Tyrone Says:

May 7, 2010 at 10:13 am

Yes, I would advise that. Citisec is I think the

best when it comes to providing the most

detailed information to its stock traders.

However, personally, I chose BPI Trade

because of the convenience it brings me by

linking my own BPI savings account to my BPI

trading account. You can transfer funds

easily online. Transfer sales proceeds of your

stocks from BPI Trade to BPI Savings. Vice

versa, you can also transfer funds from

savings account to trading account to fund

your stock market trading.

Reply

Belle Beauty And The Beast Says:

June 29, 2010 at 1:30 am

Hey friend I¡¯ve really had a blast reading up your blog I¡¯ve found them rather cool,

Can¡¯t wait for your next post!

Reply

Leon Says:

August 17, 2010 at 4:27 pm

THANKS…

Reply

SpaPOT Says:

August 24, 2010 at 4:54 pm

wow…i expect more tutorials to come..

great job..

Reply

Henry Says:

September 4, 2010 at 10:55 am

I see ganyan pala yun… parang yung nababasa ko din d2.

http://www.pesorepublic.com/db/stocks-and-stock-trading/

Reply

Ela Says:

September 23, 2010 at 10:22 pm

thank you so much! this is very helpful


8 of 11 5/15/2014 11:44 AM

Reply

Ryan Says:

September 30, 2010 at 12:37 pm

this is helpful…

may nakita din akong discussion about stock market here..lalo na sa mga pinoy na

gusto mag invest sa stocks

http://www.pesorepublic.com/db/stocks-and-stock-trading/

Reply

Emmanuel Says:


hi tyrone,

Is there an investment club here in the philippines, where you can learn and earn at

the same time?

Reply

Tyrone Says:


I know a legitimate one. But it’s a multi level marketing system.

However, their products are all investment and financial products.

Reply

Tommyboy Says:

August 13, 2012 at 6:23 pm

what mltilevel company is this’?

Reply

Dexter | Techathand Says:

March 15, 2011 at 2:50 pm

Need to check and I will try this one

Reply

RChavez Says:

November 27, 2011 at 6:56 pm

As part of my investing plan, I started learning about stocks just this month of

November and I found your site. So far, I find your site very informative and most

relevant. I’m thinking of sharing your thoughts on my blog with a link back to your

site. Thanks for educating novices like us online. Grace and peace!

Reply

Artsforrent Says:

February 24, 2012 at 11:12 pm

I just started investing in stocks this year, and I am really looking for some pointers,

found what I have been looking for. Thanks for the very informative post

Reply

Tyrone Classmate Says:

March 19, 2012 at 7:16 pm

Hey classmate (hulaan mo na lang kung sino hehe),

May alam ka bang mga training ng stock market? Something like this pero hindi ko

mapupuntahan iyan e

http://www.beeconomic.com.ph/deals/metro_manila/ivision-philippines

/716003288?nlp=&CID=PH_CRM_1_0_0_79&a=715827912

It might make a good blog post. Looking forward to read it when you have the time.

Thanks!

Reply


9 of 11 5/15/2014 11:44 AM

Kcc Says:

May 16, 2012 at 11:16 am

Ayala Corp. (AC) declared to give 20% stock dividend declaration ex-date June 1;

payment date July 31. Cash dividend of Php 5.75 per share ex date September 1,

payment date October 30.

- As an investor, if you want to take advantage, acquire as much stock as you can

before the ex-date. If the investor bought 100 shares of AC before September 1, the

he/she will have 120 shares by June 1.

I think there’s an error here. I presume you should’ve bought before June 1 so you’ll

have 120 shares by July 31.

Reply

Pinoy Investing Says:

July 8, 2012 at 12:12 am

pretty covers the terms we have in our initial encounter with stock market

investments

Reply

Alvin Says:

August 14, 2012 at 11:04 am

Hi Tyrone,

The company I am working right now has this program called Employee Stock

Purchase Program (ESPP) wherein the company deducts 1~10% from our gross

income and invests the accumulated amount every six months to purchase stocks of

the company (Wdc). Do you think this would be better than say using Citiseconline

or BPI Trade?

Reply

Tyrone Solee Says:

August 15, 2012 at 1:34 am

Hi Alvin,

It can be good depending on the performance of your company. In

this situation, you don’t have control over which stocks to buy because

the company is investing in your behalf and they are only buying their

own stock. The company is bias in this case. All eggs are in one basket

which is the stock of your company. What if the company does not

perform well? What if there are major issues affecting the stock of the

company?

I would say it is still better to diversify your investments in several stocks,

not just in one stock alone. In this case, I think it is better using

Citiseconline or BPI Trade.

Reply

Vicky Says:

November 5, 2012 at 7:10 am

At last I got some ideas. I am so desperate in looking this kind of info.

Thank you Uncle Tyrone. Now I have to start hunting on where I put my small hard

earned money. Any suggestion po.

Thank you very much.

Vicky

Reply

Tyrone Solee Says:


If you’re a newbie investor and don’t have much time monitoring your

investments, I suggest to invest in mutual funds and unit investment trust

funds.

Reply

Rod Says:


10 of 11 5/15/2014 11:44 AM

« Where to Invest Extra Cash? Stock Trading Adventure »

Copyright © 2014. All Rights Reserved.

Leave a Reply

Name (required)

E-Mail (will not be published) (required)

Website

Submit CommentSubmit CommentSubmit CommentSubmit Comment


hi sir tyrone, can u clarify more on fluctiations..

“The movement of stock prices is also subjected to ‘fluctuations‘. This is also

dependent on the price of a stock. Here in the Philippines, a stock with a price of 101

and up per share is subject to a fluctuation of 1.00. It means that it can move to a

multiple of 1, lower or higher, but it cannot move 0.25. Therefore, you cannot buy or

sell it at 101.25 or 101.50″

Are there rules in selling ur shares at a price? for eg u buy 1000000 shares at a price of

0.01 then sell it lets say 0.011, is this possible?

newbie here tnx…

Reply

Jone Such Says:

May 20, 2013 at 1:51 pm

An initial public offering (IPO) or stock market launch is a type of public offering

where shares of stock in a company are sold to the general public, on a securities

exchange, for the first time. Through this process, a private company transforms into

a public company. Initial public offerings are used by companies to raise expansion

capital, to possibly monetize the investments of early private investors, and to

become publicly traded enterprises. A company selling shares is never required to

repay the capital to its public investors. After the IPO, when shares trade freely in the

open market, money passes between public investors. Although an IPO offers many

advantages, there are also significant disadvantages.^,..

Reply

Arby Says:

January 29, 2014 at 12:38 am

I just stumbled into your blog today and in few hours of reading, I’ve learned a lot!

This has just given me more confidence to finally start in stocks.

Reply


11 of 11 5/15/2014 11:44 AM

Documents

How Stock Market Works