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We come across so many terms in our day to day world that it becomes difficult to keep in mind all of them. As such, we should ensure that we have our basic concepts clear. This is because; by having our basic concepts clear, we would find understanding the other terms better especially the terms, which are in a way of the complex nature. Also having our concepts clear will also ensure that we grasp the other terms fast and also understand them in a better way. Thus, let us at first start by understanding the terms, stocks and shares. We have decided to start with stocks and shares at first, because these are most commonly used terms in the stock market and as such learning these terms at first would ensure that we learn the other terms better. The stocks and shares are the basic concept of the stock market and in order to proceed further and learn in details about the other types of trading in the share market, it becomes necessary that we at first have the basics clear. For example, if we want to learn about the position trading we cannot directly start by explaining the term. You have to know the basics at first to know how these types of stocks are different from the other types of stocks.
Misconceptions regarding stocks and shares
A share in the stock market refers to the proportionate amount of the capital of the company. Basically, it refers or rather measures the rights and obligations of the shareholder in a company. However, many people have a misconception regarding the shares and stocks. There are many people who think that both stocks and shares refer to the same thing. This is a completely wrong and erroneous belief of the people and as such, it should be corrected and cleared as soon as possible. This is because of the reason that although the stocks and shares are used together but in reality stocks and shares do not mean the same thing.
Clear your doubts
Although it can be said without a doubt that both stocks and shares are synonymous to each other, but in practice they are not the same and thus, do not mean the same thing. Stock is a completely different concept than the shares. Stocks refer to simply to a set of shares, which are put together in a bundle. Thus, in other words, stocks can be defined as a set of shares or in other words, a group of shares, which are fully called up and paid up. As such, it is to be noted here that the a set of shares or a group of shares can be called a stock only if all the shares comprising the group or the set are fully called up as well as fully paid up. If all the shares comprising the set or the group are not fully paid, it cannot be regarded as a stock. Thus, stocks can be defined as the aggregate of all the fully paid up shares of a company, which are legally consolidated. You should know about online share trading as well.
Generally refers to the long term investments
The above paragraph provided you the detailed as well as the basic concept about the stocks and shares. As such, it would now be easier for you to understand the other terms better. Now we all know that, basically there are three major types of investments, namely, the short term investments, the medium term investments and lastly the long term investments. When we say this type of trading, we generally refers to the long term investments, in this case, long term trading. Generally, in these long term trading the trading period ranges from several months to even several years. If the profits earned in this type of trading, then it is quite uniform the time period goes on increasing. As such, it is one of the most commonly as well as widely used trading practices; especially at the time when the investors are earning uniform profits. However, it has been seen that most of the investors are not able optimize the advantages of position trading.
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