Companies’ stocks are securities that indicate that their owner has contributed to the capital of the company. This article provides detailed information about companies’ stocks and how to profit from them. Read more:
Companies’ stocks are securities that give their owners a share in the ownership of the company. Stocks are traded on the stock market, and their price can change depending on supply and demand.
Example. Apple is the company with the highest market capitalization in the world. Its stocks trade under the AAPL ticker symbol on the NASDAQ exchange. When you own Apple stock, you own a piece of the company and can receive a portion of the company’s profits in the form of quarterly dividends.
Stocks come in different types. The most common types of stocks include:
Example. Stocks GOOG and GOOGL are traded on the NASDAQ exchange. Both of them belong to Alphabet Inc., but they differ in their class. Stocks of class A (GOOG) grant voting rights, while class C stocks (GOOGL) do not.
Before diving into stock trading on the exchange, it is essential to address some technical aspects. Below is a clear sequence of steps to follow to start trading stocks on the exchange.
In simple terms, a broker acts as an intermediary for buying and selling company stocks on the stock exchange. To elaborate further, a broker performs a wide range of functions:
You will need to undergo a verification process according to AML and KYC standards. The process of trading companies’ stocks is strictly regulated, and verification is a mandatory requirement.
You need to transfer a specific amount of money to your account. This money is necessary for purchasing stocks. Some brokers may set minimum funding requirements.
Note that when using leverage, you may have $1000 in your account but be able to buy stocks worth $2000.
Choose the company’s stock you want to buy. Submit an order to the broker through the trading terminal to purchase a specific quantity of stocks. The order can be:
For more details on the types of orders, read the article Types of Orders on the Exchange.
To select stocks for purchase, fundamental and/or technical analysis is employed.
Fundamental analysis involves studying the financial indicators of the company and its industry. It helps determine how promising a company is. The following things are considered:
Technical analysis involves studying stock price charts and trading volumes. Technical analysis helps identify market trends and pinpoint potential entry and exit points for trades. Technical analysts use:
Perhaps, one of the most powerful methods in technical analysis is volume analysis, which enables you to gauge the balance of forces between supply and demand, the primary drivers of stock price movements.
In 2023, AAPL stocks were in a pronounced upward trend.
From a fundamental perspective, the growth was attributed to:
From a technical perspective:
Overall, these factors made AAPL stock an appealing candidate for purchase.
A powerful set of volume analysis tools enables analysts to pinpoint entry points more accurately, whether for buying and holding shares over an extended period or for intraday trading.
To open the chart, download the ATAS platform, install and launch the program, then:
When the chart is open, you can use the market profile drawing tool (press the F3 key). This allows identifying a strong level noticeable by its convexity on the profile, i.e. active trading of the stock took place here. After the uptrend continued, the level acted as support during local pullbacks, providing an opportunity for a well-founded purchase of AAPL stocks.
Why does a company issue stocks?
Companies issue stocks to raise funds for financing their operations. For example, a company may use the money from the sale of stocks to build a new factory, develop a new product, or expand its business.
What is the point of buying stocks?
The point of buying stocks is to earn a profit as a reward for investing in a successful company.
What does one stock provide?
One stock can give you the right to receive a portion of the company’s profits and the right to vote at shareholder meetings.
How to make money on stocks?
When the stock price increases, you can sell it at a higher price than the purchase price. You can also make money on stocks if the company pays dividends – a portion of the company’s profits distributed to shareholders several times a year. The more stocks you own, the more dividends you receive.
What factors affect stock prices?
Several factors influence stock quotes:
The sum of all these influencing factors is expressed through the struggle between supply and demand forces, which can be assessed through volume analysis.
Trading company stocks involves high competition. To gain an advantage over other traders, use the ATAS platform – it specializes in analyzing stock volumes on the US (1), European (3), and Russian (2) exchanges.
The tools of the ATAS platform will help you gain significant advantages:
It is worth mentioning the capability to develop custom tools — indicators and automated trading strategies that can be connected via API. Thus, ATAS eliminates any limitations for analyzing cluster charts.
Companies issue stocks to raise funds for financing their business.
Shareholders who purchase stocks receive a portion of the company’s profits in the form of dividends. Additionally, trading stocks allows for profits from short-term price fluctuations and serves as the foundation for long-term investments.
Download ATAS. It is free. During the trial period, you will get full access to the platform’s tools to experiment with stock trading. Moreover, you can continue using the program for free even after the 14-day trial period is over, whether it is for cryptocurrency trading or volume analysis.
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Information in this article cannot be perceived as a call for investing or buying/selling of any asset on the exchange. All situations, discussed in the article, are provided with the purpose of getting acquainted with the functionality and advantages of the ATAS platform.
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