Trade12 – Understanding the Basics of Options Calls and Puts

Understanding the Basics of Options: Calls and Puts

There is no assurance of profits in trading. There may be a lot of precautionary measures and strategies to make, but there is still no guarantee to totally eliminate the risk of losing. Recently, we have talked about some hedging techniques to lower investment risks. We have tackled hedging through derivatives, which involves the use of put options. But what are put options? In this article, we would expand our knowledge about put and call options.

Options

An option is a form of a derivative. A derivative is a security which price is dependent upon another asset. An option is a contract, or a provision of a contract, that gives the holder the right, but not the obligation, to make a specific transaction with the issuer according to a certain condition agreed upon the contract. However, this contract comes with a certain fee that is multiplied with the number of assets it would cover. This price is called a premium.

Trade12 - Options

Put options

A put option entitles the holder the right, but not the obligation, to sell an asset at a specified price. This specified price is also known as the strike price. On the other hand, the seller of the put option is obligated to buy the stock at the agreed price. A put option can be used any time before its expiration date.

An investor buys a put option because he speculates that his stocks will fall at a later date. In order to secure his profits, he buys a contract that locks in the price of his assets so when the time comes that his stocks drop in price, he can still sell them at the specified price.

The seller of the put option is obligated to buy the assets at the specified price if the contract is used before its expiration date. However, if the contract hits its maturity date and the buyer do not use it, the seller gets to keep the premium paid for the options.

Call options

A call option grants the holder the right, but not the obligation to purchase an asset at a specified price for a certain period of time. If the stock price does not meet the strike price within the duration of its validity, then the contract becomes worthless.

An investor buys a call option if he predicts that a stock will increase in value. Once the strike price is hit, he has the option to purchase the stocks at any time within the duration of the contract at the specified price.

As with the seller of put options, the seller of the call options is obligated to sell the assets to the buyer at the strike price once the contract is used. But if the contract expires before the buyer uses it, the seller gets to keep the premium paid for it.

Understanding the gains and risks

The relationship between the seller and the buyer of options is like a zero-sum game. Only one will gain while the other loses. The only difference is the limit of the gains and risks they are exposed to. The buyer of the options can only lose the maximum amount of the premium he paid for the contract. Meanwhile, the seller can lose the whole amount of the strike price multiplied to the number of assets involved.

Conversely, the buyer of the options can secure his profits, even when the market is falling. He can also maximize his possible gains when the market increases since he can buy at a lower cost. On the other hand, the maximum gain that the seller can get is only the premium paid for the contract.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - Hedging Techniques to Lower Your Investment Risks

Hedging Techniques to Lower Your Investment Risks

There is no such thing as “free lunch” in investing. There is always an equivalent risk in every investment. This risk can never be totally eliminated; however, we can integrate some hedging techniques and strategies to at least lower them in order to raise our chances of securing a profitable investment.

What is a hedge?

A hedge is an investment position intended to reduce the risk of potential losses of an investment. Hedging is often thought as an advanced investing strategy, but practicing it is a very effective way of lowering the impact of losses in a portfolio.

We can think of hedging as similar to an insurance policy. When people buy a car, they usually open an insurance plan along with it. This doesn’t prevent any bad event to happen to the car, but it reduces the possible impacts if it occurs. This safe plan doesn’t come without a cost. The car owner pays monthly for the insurance plan, even if the presumed bad event does not come. Despite that, people still choose to have a backup plan than going through a big loss when something bad happens and they’re unprepared.

Read more about the importance of financial investing.

Trade12 - How Do You Hedge

How do you hedge?

Let us consider this scenario: You bought 100 shares of an automobile company which we will call company ABC. An automobile company performs well as long as the economy is flourishing. But we cannot be assured that it would perform just as well if the economy goes through a recession.

Hedging through diversification

In order to hedge from this potential risk, you can opt to buy defensive stocks. These stocks are composed of any products that are considered as basic necessities. During economic recessions, these stocks tend to gain or at least maintain their value. Thus, if you buy another 100 shares of company XYZ, which sells canned goods, then these stocks might gain in value even when your stocks with company ABC lose.

Hedging through derivatives

Another way to hedge is by purchasing put options for your shares. For example, your stocks with company ABC are currently worth $20. You are afraid that there is an incoming recession and you want to secure your profits, so you bought a put option to sell your stocks at $20 each no matter what happens in the future. This put option is a contract that gives you the right, but not the obligation, to sell a security at a specified amount within a fixed period of time. Thus, if your stocks suddenly dropped to $15 each, you can still secure your profits from the put option you purchased by giving you the right to sell your stocks at $20 each.

Trade12 - Importance of Hedging

Importance of hedging

Hedging is a very important technique to protect your investments from unforeseen negative events. It is all about decreasing the impact of losses in order to help protect your portfolio from uncertainty. Although it comes with an additional cost, it is still worth the benefits it can give if it could secure you from a rather greater cost.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker that offers tight spreads, flexible margins and high leverage. Read about Trade12 reviews to ensure you trust only the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - Comparison of Active and Passive Investment Approach

Comparison of Active and Passive Investment Approach

There had been a significant increase in investors from the past years. Each of these investors has their own different techniques on how to conquer the market. However, there are 2 major investment approaches: active and passive investing. In this article, we would discuss about the difference of these 2 approaches and which one of them is more appropriate for you.

Trade12 - Active Trading

Active trading

Investors of this kind are the ones who prefer to make money fast by taking advantage of short term price fluctuations. They usually read everything about investing, study the stocks and their trends, and subscribe to newsletters and magazines in order to be updated on the latest market news. They also regularly read financial statements, economic analysis and reports.  These investors treat investing as a passion, hobby, or even a career.

Active traders usually prefer stocks that are rising and promises accelerated earnings, presumably from newly discovered products and innovations. They don’t hold on to stocks for a long time, rather they seek to buy and sell stocks with the intention to make money from short term price movements. They can be associated with “day trading” as they usually make multiple trades during a single day.

The good thing about active traders is their ability to hedge on losing trades by short selling and other strategies. They also practice risk management as they can easily get out of investments when the risks start to get out of hand.

Although active traders have the potential to make money quick, they are also subject to losing just as well. The hardest part of being an active trader is the emotional challenge it brings, since it involves gaining and losing money often, resulting to undisciplined transactions without following a strict trading plan.

Trade12 - Passive Investing

Passive investing

This type of investing aims to maximize returns on the long run by using a “buy and hold” approach. Passive investors usually create a plan, researches for growth stocks, invest their money, and then patiently wait for some years until their stocks make a significant return in the future. The idea of passive investing is not to make quick gains, but rather to build slow, steady wealth over time.

Passive investors believe that by simply waiting, they can overcome the ups and downs of the market until they can settle on higher returns. They rely on the fact that despite of some crashes in the market; it has always gone back up over time.

When done correctly, passive investing can bring a lot of profits. It can even possibly multiply their initial capital, rather than a series of small gains. It also eliminates the emotional problems that comes with having to check on the market everyday. This is because temporary downturns in the market has little to no effect on passive investors.

However, the challenge in passive investing lies on recognizing growth stocks – stocks that will make consistent increase of value in the future. Even though passive investors don’t monitor the market often, they still need to periodically re-evaluate the performance of their stocks. They also need to have the presence of mind to respond to long-term market changes.

Trade12 - Which One is For You

Which one is for you?

Choosing which investment approach to take depends on your personality and preferences. Those who are eager for quick profits and would like to generate fast income, no matter how small the gains, are more inclined to become active traders. While those who prefer to save up for retirement or generally want to purchase more expensive luxuries in the future should opt for passive investing.

Learn more about the importance of financial investing.

Conclusion

No matter which approach between active and passive investing you choose, make sure to stick to your plans and follow initial strategies. For active traders: do not get your emotions get in the way; while for passive investors: ignore the temporary downturns in the market. Keep yourself disciplined and you’ll be able to harvest your profits in no time.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker with years of experience in the field. Register an account now and enjoy a wonderful trading experience!

Trade12 - Short Selling Against the Market

Short Selling Against the Market

The ultimate goal in the buying and selling of stocks is to make money from them when the trend rises. But what would happen if the trend reverses to a decline? How could investors make money from this phenomenon? In this article, we would talk about short selling and how it works.

Trade12 - What is Short Selling

What is short selling?

Short selling is a trading strategy wherein traders seek to make money from the belief that a stock will decline. It is the sale of a security that is not currently owned by the seller, or more simply put, borrowed from a broker. It aims to immediately sell the stocks at their current price. Afterwards, the stocks are bought back or covered at a lower price to make profit.

Short selling is led either by the speculation that the market will decline or by the desire to hedge the downside risk of a long position. There is a misconception that short selling is done with the intention to put companies into bankruptcy. The truth, however, is the other way around. Short selling actually facilitates smooth functioning of the markets by providing liquidity. It also acts as a restraining influence to avoid overvalued stocks and assist in stock value correction.

Trade12 - How Do You Short Sell

How do you short sell?

Long term investments usually follow the conventional principle of buying low and selling high. It is also the same as with short selling, with just a minor difference. It initializes selling high first, and then waits to buy at a lower price. The short seller then generates profit from the difference on the price when the stocks are sold and when they are bought back.

Let us consider the following example:

A trader speculates that stock ABC would decline in value. It is currently priced at $20. The trader decides to borrow 1000 stocks from his broker, who in turn looks for stock sources – either from his own inventory, a client’s portfolio, or from other brokers. The stocks he borrowed are then immediately sold at their current price and the proceeds will be transferred to the trader’s account amounting to $20,000.

After a week, stock ABC falls to $15. The trader decides to close the short position and buys 1,000 shares of ABC at $15 each on the open market in order to replace the stocks he had borrowed. To sum it up, the trader has made a profit of $5,000 from that transaction, excluding the commissions and interest that he owes the broker.

Now, what if the trader’s speculation did not happen and the stock price increased instead? Let’s take for example that after a week, stock ABC shot up to $30 each. It so happens that the original owner of the stocks has demanded his shares back. The broker has no choice but to close the position of the trader. The trader’s loss has now amounted to $10,000 (($30*1000) -$20,000), excluding the commissions and interest that he still owes the broker.

Trade12 - Risks of Short Selling

Risks of short selling

Taking from the example above, we may understand the huge risks of short selling. In a normal investment, the biggest loss that an investor can have is only equivalent to the amount he used to buy his stocks while his biggest gains are theoretically infinite since nobody can tell up to what value the market can rise up to. It is the opposite in short selling, because the biggest gains of a short seller can only be equal to the amount of the stock when sold, while his biggest loss is theoretically infinite – the short seller’s loss is parallel to the market value of the stock as it increases.

Conclusion

Short selling is considered as a very dangerous strategy because of the market’s volatility. No one can really speculate if the trend is going up or down. However, skilled traders and investors find this strategy profitable and practical when done right. Always remember that the best way to beat the market is by establishing enough knowledge. It is important to learn the fundamentals so as to avoid being run over by the market’s unpredictable trend.

Interested in trading? Read about the beginner’s guide on how to make money through online stock trading.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker with years of experience in the field. Read more about Trade12 review to make sure you only trust the best. Register an account now and enjoy a wonderful trading experience!

Trade12 - Beginner's Guide to Making Money through Online Stock Trading

Beginner’s Guide to Making Money through Online Stock Trading

The idea of making money online, inside the comforts of your home, and not needing to put a lot of physical effort is very tempting to do. Many people have the misconception that online stock trading is simply generating passive income, but it is far more from that. Investing in stock trading is very profitable, that is, if you understand how the market behaves and knows how to play along with it. In that case, it can be a great way to ensure you make money from what you currently have, instead of simply putting it in the bank where there is no significant returns. Here are the basic steps to make money through online stock trading:

Trade12 - Make money through stock trading

Choose your broker

Find a reputable trading broker site. In this step, research is the key. Look for online trading reviews about the brokerage site you would like. Read client feedback and make sure you only invest in a trustworthy broker.

Add funds to your investment account

After you have chosen your broker, you then proceed to register an investment account. Most brokerage sites offer different account types based on the amount of initial capital you would like to deposit. To play it safe, you can deposit the minimum amount just so you could try the reliability of your broker and the efficiency of your trading strategy. However, if you already have a solid choice of stocks, you can deposit enough capital to buy the required lot size of the stocks you want to invest in.

Choose and buy your first stocks

The market is very broad, so choosing stocks can be a difficult decision to make. Just a tip: choose stocks from a dominant and known company. Check on the company’s financial history to ensure that their stocks would be profitable. Make sure that the stocks you choose would be for a product that you know many people would consistently buy. For starters, buy only a small number of reliable stocks, but of course it depends upon your capital.

Monitor the market

Stock trading doesn’t stop after you buy your own stocks, you should keep on monitoring the market to make sure they are always in a profitable favor. Do not forget to set a stop loss to make sure you have full control of your assets. This is important so that you won’t lose more than what you can afford to. Keep your head up in the game. If you want to make consistent profits, do not just stay in a stock or two. Continue looking for profitable stocks to expand your assets.

Choose between cashing out and reinvesting your profits

You can always cash out your profits, but also consider the possibility of reinvesting them. That is the key to making consistent money in stock trading, especially if you are interested in making it a career or your main source of living. Just make sure that you can monitor each asset even if you invest in a lot of stocks.

Trade12 - Monitor the stock market

Need help in choosing a broker? Read more about How to Choose an Online Broker.

Bottom line

Stock trading is a cycle. Continuous research is the key to get the upper hand. As profitable as it may seem, however, it also poses a great risk. You can easily lose money if you don’t educate yourself, especially with all the financial trading experts out there. If you are one of the persistent and hardworking people who can dominate the market, then this career can be very rewarding for you.

Looking for a reliable online trading broker? Look no further than Trade12! With their tight spreads, flexible margins and high leverage, you are sure to get the satisfaction you are looking for. With the numerous Trade12 review available, you can make sure you only trust the best. Register an account now and start trading with Trade12!

Trade12 - Importance of Following a Trading Plan

Importance of Following a Trading Plan

There is a golden rule in trading which goes “Plan your trade, and then trade your plan”. A house won’t be built without an initial floor plan. It would be like buying random building materials without knowing where you would actually use them. It’s also the same with trading. You don’t simply enter and exit a trade whenever you want to. You should have guidelines that would indicate the right timing to make a certain action. This is what you call a trading plan.

Trade12 - Road Map

What is a trading plan?

A trading plan doesn’t really differ a lot from other plans you can imagine. It is more like an outline of your activities, something like a to-do-list in trading. By definition, trading plan pertains to a set of guidelines to define your trading activity. You think of it as a road map. It shows a route which you need to take from where you are and to where it leads. Metaphorically speaking, it gives a clear picture of your journey. It does not need to be a complex system. It would only provide you the basic guidelines of what you need to do.

What do you need to put on your trading plan?

There is no exact standard of what you need to put on your trading plan. However, a typical trading plan contains certain important elements. These include your profitability goals, position sizes, how to manage these positions once you’ve taken them, and a criteria of when you will enter and exit a trade. These elements are not constant. They should be adjusted in each of your trades in order to meet their varying market conditions.

Why do you need a trading plan?

Overall, a good trading plan will help you identify your goals, manage your emotions and trading risk, and help you decide when to take action. The most common mistake of traders is following their emotions. These emotions, when challenged, tend to betray a trader. Having a standard to follow helps in controlling the decisions made from emotions by sticking to the initial plan. It helps to keep the trader in the right direction when they begin to waver from their original path.

Read more about the 5 emotions that go against trading.

Trade12 - Trading Plan

What happens if you don’t follow your trading plan?

There is a saying that “If you fail to plan, you’ve already planned to fail”. Not following a trading plan transforms your trades into gambling where you simply use your intuition and luck in order to win. In other words, you can’t ensure your success. This doesn’t mean that you are guaranteed success if you have a trading plan. It simply increases your chances of winning through a systematized plan.

Conclusion

There may be times that it could have resulted better if you listened to your intuition and not have followed your plan. Yes, you might have earned a few more profits, but following your initial plan saves you for a longer term. With your decision to follow it, you’ve made a step towards building the most essential value in trading, discipline. In the long run, only the disciplined traders will become consistently profitable. Make sure to trade with your plan and secure yourself a better future in trading.

Stay updated on market news, trends, and tips by regularly visiting Trade12. It is a reputable online trading broker with years of experience in the field. Register an account now and enjoy a wonderful trading experience!

Trade12- Introduction to Portfolio Diversification

Introduction to Portfolio Diversification

No matter which stocks you choose to invest upon, huge risk is always present. There is no way you can eliminate this risk. However, you can reduce your overall investment risk through an investment technique called portfolio diversification. This is also to help lower the possibility of damaging your portfolio’s performance.

Trade12- Portfolio Diversification

What is portfolio diversification?

Basically, portfolio diversification is a risk management technique that is done by investing your money on multiple types of securities or financial assets. Its main objective is to soften the risks of blowing up your account from bad investments. It can also help ensure your money is invested in different areas of the market that have a chance to outperform. In diversification, it is important to venture on other asset classes like stocks, bonds, and mutual funds. It is more effective if the investments are spread to different industries, and if possible, different countries.

Importance of diversification

Consider a scenario wherein one company has filed bankruptcy. If all of the stocks you own are from that company, you could probably guess how huge its impact would be in your portfolio. However, if you have another company you’ve invested upon, which makes positive returns, then your portfolio is neutrally safe from crashing alongside the other half of your stocks. Now what if you have invested in 2 other companies which are all doing great in the market? You can confidently say that your winning trades will overshadow your losses since ¾ of your investments make positive returns.

It’s also the same if there is a huge economic decline to a whole industry, or in worst cases, to a whole country. If your stocks are diversified to other industries or countries, you’re other stocks are safe from the negative impacts of those losing in the market.

Trade12- How Many Stocks Should You Own

How many stocks should you own?

There is an argue on how many stocks you should own for optimal portfolio diversification. The most acceptable number of stocks is between 15 to 30. These stocks should be spread to other industries, classes, and countries. However, diversification does not prevent losses from your investments. There is still a possibility that the majority of your assets result to a loss. That is why smart choosing of profitable stocks is still the best way to lessen this risk.

Conclusion

Despite doing all these precautionary measures, they don’t guarantee you a good portfolio. No matter how diversified your portfolio is, the risk can never be completely eliminated. It can simply reduce the impact of losses from your investments.

Read more about the importance of following a trading plan.

In order to diversify, make sure that your broker has everything you would need. Trade12 is a leading international online trading brokerage firm that offers investment services on almost all countries. They also offer investments on stocks, foreign currencies, commodities, and other financial securities you could choose to diversify your portfolio. Register an account now with Trade12 and start diversifying!

Trade12- 5 Emotions that Go Against Trading

5 Emotions that Go Against Trading

Committing physical and mechanical errors in trading are easy to identify and fix. What makes it hard, especially for beginners in trading, are the psychological emotions that we cannot physically perceive. There are no outside factors that can fix these. Only the trader himself will be able to relieve him of these. These human emotions usually happen within us, without us knowing that they are actually affecting us especially our decisions. Here are 5 emotions that go against trading which we have to conquer in order to perform better.

Trade12- Emotional Dangers of Trading

Hope

By definition, hope means to want something to happen or become true. It doesn’t seem harmful when we look it that way, but in trading, it plays a big role. Reading this, you probably know the importance of trading plans, setting a stop loss, and the discipline to follow these. That is where hope enters. When a stock is going up or down, it is hope to recoup losses that make the trader ignore the initial stop loss he set. The problem is the market doesn’t care about how we feel, and because of its unpredictable trend, this way of trading usually results to losing more.

Fear

Fear is defined as the anticipation of the possibility that something unpleasant will occur. Studies say that most traders suffer from fear the most. It is the main reason that stops a trader from trying again after experiencing a few losses. There are a lot of instances wherein a trader does not enter a quality investment due to fear of losing more. I am not saying that a trader should not listen to his fear as sometimes it can also save him from more loss. However, a good trader should not let his fear stop him from thinking rationally and be able to recognize profitable investments.

Greed

Greed is commonly defined as an excessive or rapacious desire, especially for wealth or possessions. Trading with greed tends to result to wanting more and more. However, it is a wrong practice to anticipate your profits in trading while the position is still open. A trader should focus more on the process and how to improve it instead of looking forward to profits which are often unrealistic. There are also times wherein a win turns into losses when traders let greed work its way in the trade. To play it safe, stick with the initial plan and put effort into developing your strategy more. That way, profits will come your way naturally without you even noticing it.

Anger

Anger is defined as loss of self-control from a feeling of displeasure. After a series of losing trades, there is this feeling of anger that wants to drive us into adding to lost trades in order to regain our losses. This is called revenge trading. However, the market usually works the other way around. Just when you thought it was going to snap back again, the trend continues to decline, thus resulting to more losses. The safest way is to follow your stop loss plan to minimize the amount of losses.

Regret

The feeling of regret means to be unhappy or disappointed about something that has happened or been done, especially a loss or missed opportunity. It is only natural to feel regret about the bad decisions we make, especially in trading. But it is also not good to focus on lost trades and missed opportunities. A better way is to assess and evaluate what was done wrong, look forward to new profitable opportunities, and apply what you have learned.

Trade12- Emotions Traders Should Avoid

Conclusion

It is perfectly normal, as human beings, to feel these kinds of emotions especially in a field as risky as trading. What makes it bad is when we let these emotions overwhelm us to the point that it controls most of our decisions. The best way to avoid this is to recognize these feelings and know when to set them aside. Putting our trading plans and strategies first and having the discipline to follow them without wavering because of these emotions will help us improve our trading performance.

If you are really serious in trading, read about the 10 good online trading habits of a successful trader.

Stay updated on market news, trends, and tips by regularly visiting Trade12. Trade12 is a reputable online trading broker with years of experience in the field. Register an account now and enjoy a wonderful trading experience!

Trade12- An in Depth Guide on How the Stock Market Operates

An in Depth Guide on How the Stock Market Operates

What is a stock?

A stock (also called a share) is basically a type of security that represents a piece of ownership in a company. When you buy a stock, you are entitled to a small fraction of the assets and earnings of that company. Stocks are usually sold in an exchange called stock market.

There are 2 types of stocks based on ownership rights. The first one is the common stock which entitles the owner voting rights equal to the shares owned. It gives the owner a chance to partake in the major decision making of the company. The other type of stock is called preferred stock. It is a type of ownership with a higher claim on the company’s assets and earnings than a common stock. Although it usually does not carry the same voting rights, owners of preferred stocks are usually guaranteed with a fixed dividend, which must be paid out before distributing it to the common stockholders.

To determine the price of a stock, the company first initializes an IPO or an Initial Public Offering which sets the price of the stocks based on the estimated worth of the company and how many shares it wants to issue. The company does this in order to raise money, which the owners use to pay off the loan used to build it.

The stock market

Trade12- The Stock Market

Investors continue to buy and sell stocks through an exchange called the “stock market”, although the company itself no longer receives money from this. The only time the company receives money through its stocks is from the IPO. The traders continue this kind of transaction because the perceived value of the company changes over time. Investors determine this value depending on the current trend of the market or how well the company does.

The price of a stock in the stock market can be determined in many ways. One of the most common ways is through an auction process where buyers and sellers place bids and offers for a stock. The bid is the price at which somebody is willing to buy a stock while the offer (also called ask) is the price at which somebody is willing to sell a stock. When both parties come to an agreement, a trade is made.

Understanding the market trend

Trade12- Understanding the Market Trend

The market trend tends to have fluctuations, occasionally rising or dropping for a long time, thus giving birth to bull and bear markets. Whatever is the status of the trend results to gains or losses of profits to investors. The problem is the market trend is hard to predict due to the numerous factors that affect it. The challenge is how the investors would take advantage of this trend to put it in their favor. The main goal of buying stocks is to make money on companies that are expected to do well.

Earning profits through the stock market

There are many ways to earn profit through the stock market. One is through dividends. A dividend is a cut of the company’s profit. It is shared to the company’s stockholders in order to give them a return of investment. Only a few companies do this as most of them opt to issue growth stocks. These stocks are where the company’s profits are reinvested to equipment, renovations, and expansions which could make the company’s value grow.

Trade12- Earning Profits Through the Stock Market

If not through dividends, the idea of the stock market is to “buy low and sell high”. Investors usually enter the market when stocks have low prices or in a downward trend. They do this in hopes for it to make a snap back. When the stock value rises, most traders sell their owned stocks. They do this when they reach a speculated peak to earn profit from the difference of the stock value when bought and when it is sold.

Interested to try stocks trading? Read here about the steps to making money through online trading.

Bottom line

As an investor, you have the choice on how you would manipulate the stocks for your benefit. Whichever way you prefer, the main goal here is to gain profit. There are dozens of companies that are authorized to trade with major stock exchanges. Even if you are far away from these companies, you can always use the power of the internet. Nowadays, it has revolutionized stock trading, giving anyone with an online trading account a power to join in stock exchanges.

If you are interested to join the stock market, you have to participate through a stockbroker. Trade12 is an international brokerage firm that specializes in almost all kinds of trading options like stocks trading. With their ECN brokers, you’ll be able to join the stock exchange the easiest way possible with reliable guidance. Register an account now and enjoy an exceptional stock trading experience only Trade12 can give you!