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Help please,understanding the market - This is Money Forum
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  1. #1
    Junior Member
    Join Date
    Jan 2016
    Posts
    2

    Help please,understanding the market

    Hello,I'm wondering if someone could spare a little time to explain to me how stock markets/shares work,and also when I'm looking at the stock market I see arrows,volume and ftse etc could someone explain what these mean please so that I have a better understanding please,I've searched the net but most sites say different things.maybe a couple of examples of what I should be looking at when investing in a stock/share.thankyou

  2. #2
    Super Moderator
    Join Date
    Mar 2001
    Posts
    13,764
    When you buy shares, you are buying ownership of a small part of a company. With most, they will pay a dividend twice or four times a year, which is part of the profits they have made. Usually this will be a half or more of their profit after tax. If it is half the profit, then the dividend is said to be twice covered by the earnings, so you have a dividend which should be easily paid, but changes in the economy may affect the business, and the dividend may have to be reduced, or it could be increased.

    Nowadays most sharedealing is done on-line, so you use a broker who allows you to tell them to buy you some shares. You need to have the money in your account to cover the cost of the shares, and there will be a charge, often fixed at £10 or so, but it could be a small percentage of the trade, and stamp duty at 0.5% of the value of the trade. The shares are then held in a nominee account with the broker. You can sell the same way, but there is no stamp duty to pay, just the brokerage fee.

    The figures that you are talking about are typical of those you see in tables of share prices. There will be the latest price, usually the mid-price but it could be the "bid" and "offer" prices, which are what you can sell or buy the shares at and there is usually a spread between them This is small in big companies but can be very wide in small AIM companies. Then you will see an indication of whether the price has risen or fallen, and the number of shares traded during the day. Some on-line sites will show individual trades, which may be buys or sells, and the price of each trade with the volume of shares traded.

    That's a very rough outline of what it is all about. A good book on the subject might be a good idea for you.

  3. #3
    Junior Member
    Join Date
    Jan 2016
    Posts
    2
    Thanks for your time,I have a better understanding now but I still need to get my head around it abit more lol.thankyou

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