What is A Stock?
A stock represents part ownership of a company. A company is
collectively owned by its stockholders. Therefore, if you own
1000 shares in a company that has a capital base of 1,000,000
shares issued and fully paid, then you own one thousandth (1/1000)
of the entire company. If you owned 500,000 shares then half
of the company belongs to you.
How Do I Buy Stocks?
Once you determine which company or companies you would like
to have a part ownership in, you simply get in touch with your
stockbroker (like CMMB Securities) to place your order. If you
are not certain, please come in and our stockbroker will help
you decide which companies stocks may better suit your investment
objectives.
You will need to provide the stockbroker with certain information
(your name, mailing address, ID#, telephone contact etc.) because
an account has to be opened for you before any business can
be transacted on your behalf. After the account is opened, you
can begin to place your orders.
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Types of Orders
There are two (2) types of orders you can place:
- A Market Order, which means you want your stockbroker
to buy or sell the shares at the best possible price
- A Limit Order, which restricts your stockbroker to purchasing
or selling the shares for you up to a certain price determined
by you.
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How Do I Sell Stocks?
You can sell stocks by opening an account with your stockbroker
and placing any one of the two (2) types of orders. When selling,
you must also surrender your stock certificates along with a
signed stock transfer form in order to facilitate the smooth
transfer of the shares to the purchaser.
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What Stocks Can I Buy or Sell?
The stocks of all the companies listed on the Stock Exchange
can be bought and/or sold. To date there are 32 companies listed
on the Stock Exchange.
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What Is A Stock Exchange?
A Stock Exchange is a centralized market place for the buying
and selling of shares. The stockbrokers who buy and sell on
your behalf are called members of the Stock Exchange. They are
the only ones authorized to transact business on the Stock Exchange.
Trading takes place on Tuesdays, Wednesdays and Fridays, from
9:30am.
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How Are Transactions Settled?
If you place an order to buy, your stockbroker purchases the
shares. You will be required to pay in full within 5 working
days of the transaction. It you are selling shares, once they
are sold you will be paid on the settlement date which is 5
working days after the transaction date.
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How Are Prices Determined?
The price of a stock depends on a number of factors including
demand/supply conditions in the market for that particular stock.
Heavy demand will more than likely push the price upward. On
the other hand, if there are many sellers of a particular stock
then the likelihood is that the stock price will decline. Supply/demand
conditions can change suddenly. A companys results may be exceptionally
good or bad. Or there may be some bit of news, which may bode
well for a particular company that generates new demand for
its stock. That is why stock markets are sometimes volatile
and that is why any investor or prospective investor has to
determine what level of risk he or she is prepared to assume
because every investment carries an attendant risk.
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