Shares
A company may decide to break down its value into units which can be
sold to investors, known as shares. This can be a quick way for a company
to raise funds for expansion or development. Dividends are paid out to
shareholders when a company makes a profit and shares it out. The value
of a share may rise in line with expected profits and fall on actual profits.
Before you start to invest in the stock market watch how it works over
a period of time, rushing in is a sure fire way to lose your cash. However,
if you are prepared to wait before investing and can have the money tied
up for a long period of time then you are more likely to start making
some profit.
The Telegraph and The Guardian both have detailed share sections within
the money pages, which also list the FTSE index. In particular the Guardian
has pages explaining how to buy shares and how to sell shares. Both papers
have a finance glossary, but when it comes to shares here are just a few
of the terms you will come across;
• FTSE - a company owned by the Financial Times and the London
Stock Exchange, they publish lists which indicate the current market values
of shares.
• Warrant - gives the holder the right to buy shares in a company
at a fixed price at a set date.
• Option - the option to buy or sell shares at a given price within
a specific period.
• Traded Option - same as an option but the time period can be up
to 9 months.
.
Once you feel confident in your knowledge of the stock market you will
be able to start trading online. The FSA has specific dos and don’ts
about online share trading which you should read before you begin.
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Finance
