How to buy and sell stocks

Stocks

Stocks are an important source of financing. Many companies are interested in covering their financing needs by relying on stocks, and the financial markets in the Arab world have recently witnessed an important activity in this field. This led to an increase in the volume of trading, which indicates the interest of investors and establishments in this type of financial financing, and shares are defined as a type of property rights that form part of the profits and assets of an establishment. Another definition of shares is the group of financial shares provided by the partners in the establishment of the company, and these shares contribute to the formation of the capital, whether they are in-kind or cash shares.

How to buy and sell stocks

The stock market is one of the markets available to all individuals. in order to carry out operations related to shares; As these operations contribute to achieving financial profits; Therefore, novice and new investors must be careful while dealing with shares, and the following is a set of things that must be implemented to start buying and selling shares:

• choose the nature of control to be applied to personal equity transactions; A group of investors prefers to leave decisions about trading their shares to other people, but another group may prefer to carry out these transactions with their own efforts.
• Determine the amount of capital that will be used in financial operations in the stock market, and the percentage of risk that can be tolerated.
• Choosing a broker who will provide assistance in trading the investor's funds, and will also be interested in analyzing the stock market, and financial intermediaries usually get all the means to ensure their control over the investors' investment portfolios; This contributes to completing the application form to participate in the stock market.
• After obtaining approval for the application for investing money in the stock market, the owner of the financial account or investment portfolio must provide sufficient financial financing to start trading in shares.
• Buying and selling shares, including the following:
  • Determining a specific limit for the purchase of one share, at which the investor is ready to pay the value of the shares, and this contributes to ensuring the volatile conditions in the market, and care must be taken when determining this price, as the delay in determining it may help the investor get the price he wants.
  • determine the purchase of shares in the market; It is the investor's purchase of shares without caring about the nature of the prices specified when the purchase is executed.
  • buy stop It helps determine the operating share price; Where investors use orders to stop buying when reaching a downward state; As the stock moves in a different direction from its previous levels.
  • Selling shares depends on the previous points used in determining and stopping the purchase of shares, and the selling price of shares must not be less than what the investor wants, but it does not provide any guarantees regarding the demand for shares; Which may lead to selling the stock at a lower price than what the investor wants; Because of the volatile conditions in the stock market.

Stock types

Shares have a range of types, and they are distributed according to various criteria, namely:

• Shares according to the share of the shareholdersIt is divided into three types:
  • Cash shares: They are the shares that become the property of investors after they pay for them in cash, and they represent financial shares invested in the capital of public shareholding companies.
  • In-kind shares: These are shares that represent shares of an in-kind nature within the capital of companies, and are similar to cash shares in terms of financial rules.
  • Founding shares: It is a right within the profits achieved through companies and has no nominal value. It is given in exchange for a government privilege, and it is traded in the stock market on the basis that it is from the companies’ profits.
• stocks according to the figure, It is divided into the following types:
  • Nominal shares: These are the shares that bear the names of their owners, and contribute to proving their ownership in the company's records.
  • Bearer shares: They are shares that do not carry the names of their owners, but it is indicated in them that the share is for the bearer (its owner) who is considered his owner in companies, and his possession is an indication of his ownership of the share.
  • Shares to order: They are shares that contain the word “to order”, and are similar in their trading to the bonds used to condition the order; By relying on a trading method called endorsement.
• shares according to the rights of their owners, It is divided into two types:
  • Ordinary shares: They are shares of equal value, and give investors equal rights without any other privileges.
  • Preferred shares: These are shares that give their owners priority in obtaining profits, and recovering the value of their payments from the company’s capital upon liquidation. It also offers many other advantages to its owners, and is not available in ordinary shares.
• shares according to consumption or not, It is divided into two types:
  • Capital shares: These are the shares provided by the shareholders to the company, and they do not return to them except when the company is liquidated.
  • Enjoyment shares: they are the shares that the shareholders get after consuming their shares; Which are the shares with depreciable value.
• shares according to value, It is divided into four types:
  • Nominal value: It is the value of the share shown in the instrument, and the nominal values ​​of the shares constitute the companies’ capital.
  • Issuance value: is the value at which shares are issued; Therefore, it is permissible to issue any share with a value less than its nominal value, whether when raising the value of the capital or establishing companies.
  • The real value: It is the due share for each share in the companies’ funds after deducting their obligations and debts.
  • Market value: It is a value that is determined within the stock market, and is exposed to various fluctuations that include rise and fall according to many factors, such as the integrity of the company's financial position.
• shares according to circulation, It is divided into two types:
  • Guarantee shares: These are shares that are not subject to negotiation and are presented by a member of the company's board of directors. in order to ensure its management.
  • Trading shares: are all shares except for the guarantee shares; It is possible to trade shares by buying and selling them according to the systems used in trading.

stock properties

Stocks have many characteristics, the most important of which are:

• They are considered sukuk of equal value, and this thing gives each share the same rights if they were ordinary shares.
• One share may not be owned by more than one owner before the company. Even if the share becomes joint ownership of a group of heirs; However, this ownership, with its validity, does not apply to companies, but the share must be represented by only one person.
• accept commercial trading when they are nominal shares; By transferring its entries in the companies' shareholder records, but in the event that they are bearer shares; Its owner relinquishes it by relying on its financial delivery.