Stock trading

Definition

Stock trading involves buying and selling shares of a corporation on the stock market. It is a way for investors to gain ownership in a company and potentially profit from its financial growth.

5 Must Know Facts For Your Next Test

1. Corporations issue stock as a means of raising equity financing.
2. Primary markets involve the initial issuance of stocks directly from the corporation to investors.
3. Secondary markets are where existing shares are bought and sold among investors.
4. Common stockholders typically have voting rights in corporate decisions, while preferred stockholders usually do not.
5. Dividends may be paid to shareholders as a distribution of profits.

Related terms

Initial Public Offering (IPO): The first sale of stock by a private company to the public.

Dividend: A portion of a company's earnings distributed to shareholders.

Equity Financing: Raising capital through the sale of shares in a company.