The trend of stock trading has been steadily picking up throughout the world since the advent of electronic trading in 1970.
In the past decade, there has been increased participation of the millennials in the Stock market through online trading apps like Robinhood and E-Trade which has given boost to trading figures.
Nigeria too has seen growing interest in online trading with both millennials and older stock traders using local trading platforms.
But it has been noticed that many new traders generally tend to ignore the basics and risk factors related to trading while trying to book significant profits in turn they end up losing money. To make better profits, it is important to understand the details of the stock market and guidelines related to stock trading.
Below is our complete guide for the beginners to start stock trading in Nigeria.
What are Stocks or Shares?
A stock or share represents the ownership of the company or corporation. Owning shares of any company means that the shareholder owns a part of the company’s or corporation’s asset and earnings.
All the shares that are held by external investors of a company are called outstanding shares. Suppose if a company has 500,000 outstanding shares, then owning 50,000 shares means owning 10% of the stakes in the company.
Any company or corporation that exists in the world is either public or private. A private company is generally owned by a few individuals who can be founders, management, or private investors. A public company is a company in which common people or general public can own stakes besides the company promotors or founders – by buying a portion of shares offered in an initial public offering or through
Stock exchange. For example, Aliko Dangote owns shares of Dangote Group, Elon Musk owns shares of Tesla. In simple terms, if you wish to own a part of any company, you will buy its shares.
– The Guardian