Stock Market Investing 101

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The stock market is a huge business with a variety of investing opportunities. Some stocks trade over-the-counter, or OTC, and some do not. Over-the-counter trading involves buying and selling securities over-the-counter. These securities are traded electronically and often include foreign and small companies. The lowest priced stocks are called “pink sheet stocks,” and typically trade under $5 per share. In either case, you can build an endless portfolio of different securities.

Before investing, you should understand the fundamentals of stocks. First, determine whether or not a stock will appreciate in price over the long run. You should also understand how to use fundamental and technical analysis. The former evaluates a security’s intrinsic value while the latter considers its price history and volume. These two types of analysis are extremely important when trading in the stock market.

Stock market trading takes place throughout the day, with the main trading hours being from 9:30 a.m. to 4 p.m. Eastern Time. There are several types of stock markets, and each has different trading hours. Some are open for business 24 hours a day, while others are closed all day. Some markets have premarket trading sessions, which are open at specific times of the day. In most cases, the best time to trade a stock is during the opening and closing stock market trading hours. When the markets open, traders react to news and settle their day trades. This increase in liquidity causes price volatility, which increases the risk of trading.

Those who are interested in stock market trading should consult a stock broker or brokerage firm for information. They can also use personal computers, specialized software, and the Internet to manage their positions.


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