HOW STOCK MARKET WORKS

 Stock

What Is a Stock? A stock (also known as equity) is a security that represents fractional ownership of a Company

.Units of stock are called "shares”

Stock Market: 

Is the Location, virtual or physical where stocks is exchanged between a buyer and seller.

Actors in Stock Market:

Stock Brokers - They are licences individual who either work privately or work in a stock broking firms.

Stock brokers link and maintain stock broking accounta for individual Investing customers.

Registrars:

Thesee are firm that keeps and update the register of shareholders of a particular company at any specific time, they also manages dividend distribution

Centra Clearing System: CSCS

This Company is a custodian that Manages the system that house the units of shares verified by the registrars. Share sold or bought is effected in Shareholders CSCS Account

Stock Exchange:

This a regulatory firm that produces the platform for Stockbrokers to operate, they own the trading platform, train and provide regulatory policies on activities of StockBrokers

Security exchange commision:

The Commission regulate and develop the capital market, in addition to determining the prices of issues and setting the basis for allotment of securities.

Chartered Institute of StockBrokers:

This is the entity that that certify intending stockbrokers, they provide trainings and ensure professionalism among Brokers.

What is bull: bull is a market situation when market all share index is increasing 

Bear is the opposite.

Gainers are stock whose price appreciate on a trading day or trading session.

Lossers is the opposite.

How do stock make money:

Consistency and staying invested is the secret of making money in Stock Market.

How money is made?

Capital Appreciation

Price of Shares increase over time based on performance of conpanies and investors are rewarded with the diffence between the entry price and exit or current price for revaluation purposes.these greater.

How money is made?

Dividend Payout

Companies distributes some part of its profits based on perfomances and dividend policy.

Script or Bonus Issue:

Company may decide to Capitalize earning by issue additional shares to existing shareholdes in proportion of thier existing holding. The is a way of reward Shareholders.

Can stock be a bad investment?

Risk is the word an investor could lose enite or part of invested funds, if the company under perform consistently or in time of general economic dowmturn.

How can you determine a good stock.

Here are twelve things to consider.

1. Price. 
2. Revenue Growth. 
3. Earnings Per Share.
4. Dividend and Dividend Yield.
5. Market Capitalization. 
6. Historical Prices. 
7. Analyst Reports. 
8. The Industry
9. Corporate Governance
10. Liquidity Position
11. Financing Mix
12. Qualify of Management