Today, often in the news on television you can see information of an economic nature, which also includes securities, most often on stocks or indices of certain exchanges. Let’s try to figure out what the company’s shares are, why they are needed, where they can be bought and sold, and what you can get from all of this materially.
Stock Concept
As already noted, the stock is a security that gives its owner the right to a certain share in the business of the company. It should be understood that it is possible to exert influence on the activity of a particular company only if you own a large stake. Securities, in turn, can guarantee income (bonds), or they may not. The latter include stocks.
Classification
When answering the question about what are the shares of the company, you need to decide on their classification. They are divided into different types: electronic, paper, bearer, registered, etc., however, the most important classification for an investor involves their division into ordinary and preferred.
The owners of the latter receive guaranteed constant dividends on shares of companies whose preferred shares are owned by them, but do not participate in the general meeting of shareholders and do not claim large payments if such a decision is made. Holders of ordinary shares may not receive dividends at all if the board of directors decides to direct the profits of the company for any other purpose, while owners of preferred shares will receive them anyway. The former are entitled to participate in the general meeting of shareholders.
Trading stocks of companies
Today, legal entities issue uncertificated or electronic shares. The stock exchange of companies in Russia is the Moscow Exchange. It is on it that the stock market trades in stocks. It was formed in late 2011 as a result of the merger of the MICEX and the RTS, which at that time were the largest players in the stock and derivatives markets.
The purchase of company shares is carried out from a specific brokerage account (a broker can be described as an intermediary - a professional participant in the securities market through which trading is carried out), which opens a certain individual, credits there a certain amount (the minimum differs for different brokers), after which you must choose a broker and conclude an agreement with him. After the conclusion of the latter, a settlement account is opened, from which money for the purchase of shares will be transferred to the broker's account. An account will also be opened at the depository to hold stocks and other securities there.
After that, you need to install the appropriate software that will support trading on the exchange, the most popular of which is Quik. As trading is completed, various reports come from brokers that need to be studied in order to understand what is happening with the investments.
The Moscow Exchange presents shares of Russian companies. They have a different value at each current point in time. Records of acquired shares by a specific individual are stored in an electronic register. If you doubt the availability of shares, you need to order an extract from the depository.
Trading in shares is carried out in T + 2 mode, that is, settlements on completed transactions are carried out 2 working days after the end of the transaction. You can sell the stock on the day of purchase. T + 2 is the regime that is necessary primarily for the calculation of dividends, because if you count on them, you need to purchase shares 2 days before fixing the register of shareholders.
Stock trading strategies
Shares of Russian companies today are sold through the stock market through the implementation of one of the tactics: speculative or investment. The first is called trading and consists in playing on stock prices, usually for a short period of time - from a few seconds to a day. In this case, a tool such as technical analysis is used. Investments are made in assessing the fundamental economic performance of a company, and a search for undervalued companies occurs.
Speculative tactics involve the use of certain areas called strategies:
- scalping (closing trading positions with the lowest possible profit);
- intraday, day trading or intraday trading;
- Algorithmic trading ( trading robots are used) ;
- swing trading (transfer of trading positions to the next day is carried out).
The main investment strategies:
- value investment (purchase of shares at a lower cost);
- bought and hold;
- dividend strategy (investing in stocks that will bring stable dividends);
- acquisition of growth stocks (stocks of fast-growing firms).
Earnings on the stock exchange
Today, stocks of companies traded on the stock exchange do not guarantee buyers the benefits. None of the brokers and investors will be able to promise that the money invested in certain shares will certainly bring profit and the investor will not incur a loss. You can earn money only by making competent investments, conducting technical and fundamental analyzes.
Quik Ecommerce
The program itself can usually be downloaded from the broker's website, which provides a username and password to it. Next, we begin to understand. We go to the trading terminal. We find the company that interests us. We fall into a trading glass. What is it here? Company shares, purchase price, sale price and lots. The latter can include both one share and several, each company has its own lot size. The number of shares less than the lot size will not work.
Shares can be bought both at the market price at the current moment, and at the price you declared with a waiting period until someone wants to buy these shares at the stated price. In addition, in the program you can configure the purchase and sale of shares at the time they reach a certain price. Accordingly, if this price is not reached, the purchase and sale of shares will not take place.
In addition to using the program, applications can be submitted by voice over the telephone.
Stock taxation
The profit earned in the stock market relates to income, and, accordingly, it is necessary to pay personal income tax at a total rate of 13%. The broker acts as a tax agent; he pays tax for an individual at the end of the calendar year or when withdrawing money from a brokerage account. Currently, brokers open individual investment accounts, using which, you can get tax deductions.
OTC Stock Market
In addition to shares traded on the stock exchange, there are many shares of small companies that are traded on the so-called OTC market. Here, trading is carried out using the RTS Board information system.
Illiquid assets are traded in this market. Transactions go through a broker over the phone. He searches through the aforementioned trading terminal for the shares we need at a price that suits us, or he can set our price and wait for someone to want to sell their shares at that price.
In addition, you can find the seller yourself through minorityforum.ru. After the seller is found, a call to the broker coexists, and then he already calls the counterparty to conclude a transaction. Such a purchase is more profitable because it allows bargaining.
The broker both in the exchange and over-the-counter markets takes a commission, the size of which in the last market is usually higher.
Finally
So, to the question about what the company's shares are, one can answer that this is a tool that allows the company to get development, and to the investor or speculator - to make a profit or go broke. If you are hoping to receive income as if you were depositing in a bank - after making a deposit, do not take care of it until the deposit expires, then you will most likely be ruined. To prevent this, it is necessary to use the available capabilities of fundamental and technical analysis, apply the strategies used.
It is hardly worth counting on large dividends in modern Russian conditions.