What is a Stock?
The general term "stock" is used to describe the ownership certificates of any company. There are two main types of stocks, common and preferred.
Common stockholders have the right to vote in shareholder meetings and receive dividends, where preferred stockholders have very limited or no voting rights at all. They receive higher dividend payouts, and in the event of a liquidation, they have a greater claim on assets than common stockholders do.
Stocks are available to the public for purchases, often bought and sold on stock exchanges. Investors use brokerage accounts, one or multiple, to purchase stock on the given exchange.
But stocks and CFD stocks don't have the same meaning. They are not being traded in the same way. Even though both are purchased through real trading accounts.
Keeping that in mind;
Why do companies issue stock?
Companies issue stock to help them with:
- Paying off debt;
- Launching new products;
- Expanding into new markets or regions;
- Enlarging facilities or building new ones;
What are CFD Stocks?
When trading CFD Stocks you don't have ownership over these stocks. But you can profit from bidding on the price of the stock. Whether prices are rising or falling, choosing the right investment with CFD trading can grant you profit. The trader has the option to speculate if the price will go up or down.
Limit Prime offers more than 130 stocks you can trade with, no trading commission and the best spread rates in the region.
Check out our Product & Trading Conditions to find out more.
To start your trading journey with us, follow the simple steps listed below:
- Open a real account
- Deposit funds in your account
- Start trading.
What determines the price of Stocks?
- Expectations - The stock prices reflect expectations when it comes to profit of the companies, revenue and election outcomes. They provide information about the expectations and analysts tend to publish and use this guidance to help the public better understand or sway the market into a preferred direction. Stock prices also factor in expectations about global economies, because many companies rely on overseas markets to drive revenue growth.
- News - The political situation, negotiations between countries or companies, product breakthroughs, mergers and acquisitions, and other unforeseen events can impact stocks and the stock market. News in one country can impact investors in another, almost instantly.News related to a specific company, such as the release of a company's earnings report, can also influence the price of a stock (particularly if the company is posting after a bad quarter).
- Earnings - Stock prices generally rise when companies publish news on upcoming quarters. Investors are often willing to pay more for companies that can demonstrate above-average earnings growth and cash flow.
- Technical Factors - Technical factors are the mix of external conditions that affect the supply of and demand for a company's stock.
These technical factors include:
- Inflation. This is a huge driver from a technical perspective. Historically, low inflation has had a strong inverse correlation with valuations (low inflation drives high multiples and high inflation drives low multiples).
- Economy. Company’s stocks tend to track the market and their sector. Some prominent investment firms argue that the combination of overall market and sector movement as opposed to a company's individual performance determines a majority of a stock's movement.
- Substitutes. Companies compete for investment dollars with other asset classes on a global stage. These include corporate bonds, government bonds, commodities, real estate, and foreign equities.
- Demographics: Some important research has been done about the demographics of investors. Middle-aged investors, peak earners who tend to invest in the stock market more than other age groups.The greater the group of middle-aged investors among the investing population, the greater the demand for equities and the higher the valuation multiples.
- Liquidity: Liquidity is an important and sometimes under-appreciated factor. It refers to how much interest is shown for a particular stock by investors.
- Trends: Stock that is moving up can gather momentum, as "success breeds success" and popularity buoys the stock higher.
How to trade CFD Stocks?
Limit Prime Securities offers you the possibility to trade with stocks of internationally famous companies, such as:
Coca Cola (KO) - This is one of the largest non-alcoholic companies in the entire world, founded in 1892. Coca Cola is also owning and marketing other carbonated beverage brands, such as Coke, Fanta, and Sprite.
Keep in mind that Coca Cola’s stock is a slow and steady stock, this performance was caused by the Covid-19 pandemic and some other changes that the company went through in the last decade. But Coca Cola is unstoppable. Always improving its management, increasing and becoming more and more seen in traders’ portfolios.
Currently, management says that the business is expected to grow from 4% to 6% per year, in the next few years.
Tesla (TSLA) - was founded in 2003 by a group of engineers, with one very simple mission: To prove to people that electric cars can easily replace gasoline cars and with this we can give this planet a second chance to live. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Tesla went from an non-profitable start-up business and turned into a multibillion empire. Elon Musk played a great role in this enormous improvement.
Analysts say that Tesla’s stock has a Relative Strength Rating of 87 out of 99. The rating means that Tesla stock has outperformed 87% of all stocks over the past 12 months, making this stock a top pick for traders.
Apple (AAPL) - The company was founded in April 1976. Apple specializes in fields like: design, manufacture, and sale of smartphones, personal computers, tablets, wearables and electronic accessories, and other varieties of related services.Limit Prime Securities provides its clients with CFD stocks trading, through its generated trading platform MetaTrader 5, which is available on PC, Mac OS, iOS, Android, Mobile and Smartphone. With the staff’s support and the experts we are driven to satisfy our clients’ needs.
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