Share Dealing: An Explanation
Share dealing is the same as trading in stock or equities, they’re simply different names for the same thing (which often causes confusion).
Share dealing refers to the process of investing in a company by buying shares, i.e. you are purchasing a share in that specific company. Once you’ve bought your shares, the overall share owned by you will depend on how many you’ve bought, and how many were issued originally. For example, if the company issued 500 shares and you purchased 50, you would own 10% of the company shares.
As with any kind of investment, people are involved to try and make money. They’re hoping for an increase in the share price, so that they can sell their shares at a profit. On the other hand, investors could also look to buy and hold shares in large companies who have a track record of releasing dividends to company shareholders. *Dividends are essentially a share of the companies’ profit for that year.
As with practically any investments, share dealing can be a risky business. Should your share price drop, you’ll be in the situation where you either sell them at a loss or keep hold of them and hope the share price goes back up (although there’s always the risk of them dropping further).
You can trade on shares via an online trading account, which you can get from any good financial spread betting providers. You should also be able to setup ‘dummy’ online accounts, which will let you practise trading on real-life markets, without the risk of losing a fortune.
If you are considering buying shares in any company you should ensure you spend time properly researching the company and industry. You’re far more likely to be successful if you can make informed decisions rather than relying on guesswork.
Filed under Finance by on Aug 6th, 2010. 