Ideally for beginner investing market stock will need to be just one stock or two. If there are a large number of variables then there is a chance that the beginner would get confused. First to get the hang of it, you must practice some trading with a dummy account. This is made for you with the help of the trader who is making the investments for you.
Investing and the beginner
When you are a beginner stock market investing will all look like the same. Teaching the stock market for beginner is time consuming mainly because of the amount of jargon present. Pick the stocks and shares for beginners form those stocks which are relatively stable. It means that we will not have to worry about the beginner too much; he will be relatively safe and will only need to come up for air when the dividends are being paid or he needs to reinvest.
To know about stocks and stock market one should have an idea of what is actually the market. The market may be broadly classified in to two main categories, the primary and the secondary market. The primary market is the actual dealings of the companies and the government in order to raise money. The secondary market is the dealings among the public , buying and selling shares and government bonds.
The second stage of learning
Once you have graduated from the beginner stock investing will become very interesting. The market may be understood from two different viewpoints: one is from the view point of the “makers” the guys who put everything on to a book and then decide the share price. The second view point is that from the actual number of shares which is moving at that point of time. If the sum of the shares at the time were arrived at then you would have a picture which is very real.
So what are shares and where we do as investors figure with respect to them? Is the question, which when answered will lead on to the untold wealth. There are two prices for every share. One is the selling price and the other is the buying price. If the average of these two is taken for purpose of calculations and predictions then we arrive at the newspaper values of the share.
Count on your investments as if they were your pets, needing the attention and care upon a daily basis. In fact the stock market is one that never sleeps . It does take a brief nap during the weekends but that is all. It works on rolling from strength to another strength briefly stopping to upset an apple cart or two and sometimes to bring the sunshine into some one’s life.
Trading in option has to be understood clearly. (Buying a call and selling a call)
These are some of the basics of the trading floor, you start with these. The strike price is the price at the time of the call. This may be the actual share price, but invariably it is a little above or below this value. Options to buy at the strike price means you are buying the share at the strike price. If the share price then appreciates a little then you exercise your option to buy and then sell it at the higher price. This means the seller will lose the margin. Similarly to the buying is the selling a call. It means that you are selling a call. If the price increases and the buyer call the option, then you will lose the amount by which the share appreciated.
Buying a put is similar to selling a call , but you now have control. This is useful when the price is going to go down. You buy a put at the strike price and when the price goes down you exercise your option to sell at the strike price and make the profit , the amount by which the share dropped. Selling a put is done when you expect the share price to increase. Someone else is given the option of selling to you the share. You are exercising the right to sell option which means when the value of the share increases enough , you sell at the strike price and make the profit on the increase.
Start your portfolio
Once you have decided to play the market you should start making your portfolios. This is the collections of stocks of various companies along with the investment details like the period of investment and the amount you have invested. This will help you track your investments and make the changes as when necessary. Get the necessary advice regarding the investment form your broker. Most important of all compare notes with your friends and other investors. This is one of the regions of the world where nothing else matters to anyone there, not even food sometimes. Getting the lowdown from them will be invaluable especially for a beginner.