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Every day there are many people selling or buying shares. However, these transactions can not be in any place. Regulations require that the sale and purchase of shares must be done in a special place called a stock exchange. Stock exchange more or less are synonym with the market, which is a meeting place for sellers and buyers.

Why is called the stock exchange? This is because in this market we are not only able to sell or buy shares, but also other securities . The people who trade in these shares are called investors (investors). Does investor who wants to buy or sell a share should come directly to the Stock Exchange to trade? No. In practice, investors simply use the services of intermediaries called brokers.

The advantage the services of brokers is where ever you are, you can still call and give orders the brokerage company to sell or buy, so your broker who make buying and selling it to you. As an investor, you does not need to know from where you bought the shares. Similarly to where investor you sell your shares. This is because investors have to use the services of a broker, and this broker are meet each other to make transaction.

USING BROKERS SERVICES

What is the minimum number of transactions in buying shares? Some brokerage firms require you to buy shares at a certain minimum amount. If you wish to purchase below the minimum amount, then the broker will not execute your order transaction.

Therefore, to facilitate a purchase transaction with a minimal amount, the stock exchange impose certain minimum amount, called lots. One lot equal to 500 shares. Especially for banking stocks, one lot equals 100 shares. So you can count yourself, when you seek shares worth $2 for example, then this means you must trade a minimum of $1,000. If the shares are banking shares , the minimum transaction $2,000.

Again, not all brokerage firms require you to purchase a minimum amount of one lot. There are brokerage firms who make exception, which can buy below that amount. This is known by the term odd lot.

You can buy shares by coming to a brokerage firm. What should you do? Usually you should make an account at a brokerage firm, and put a certain amount of money worth. That money will be used by your broker to trade shares.

Classified RISKS LEVEL

Please note that by buying shares, this means you buy ownership of a company. The difference with having own company is that you are buying ownership in business that is already running. You do not need to bother setting up a new venture in the form of corporation, because you just buy a corporation who has been running and operating.

Perhaps you are wondering, from where I know a company that has been running gain profit or loss? The answer: from the Financial Statements that are published regularly by the company. And those statements should have been checked by an independent licensed accountant.

Investing in shares are also at risk. Shares you buy could be declined. This is what makes everyone does not want to invest into the shares. We often hear there are people who lost millions of dollars, but there are also people who have profit of millions of dollars as well. And it makes not everyone is willing to invest into the shares.

So actually, the risk in buying shares is tantamount to risk if you set up a new company, which is that you have the possibility to gain profit, as big as the possibility of losing money.

Even so, do not be afraid, because the shares are usually graded based on risk levels. Starting from shares that the risk is small but the benefits are also small, until the shares that the risk probably big.

Ask the research / analyst at the brokerage firm which shares belonging to the classification. Remember, not all firms have the research broker / analyst, so make sure your brokerage firm has it.

Once again: the risk of shares investing really just the same as if you set up a new company, which is that you have the possibility to gain profit, as big as the possibility of losing money. You did not know it then you would not love it: if you do not know what risks you are facing, then you definitely would not dare to invest in shares.