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Share Trading Terms

Share Trading TermsShare trading may not be as difficult as it sounds and is no rocket science. We will try and make it as simple as possible for every person to understand.

Stock broker: A broker is some one who sells or buys the stock on your behalf. For this the broker will charge a commission just the way a real estate broker does every time you want to buy or sell a property. This rate is the brokerage rate or the commission rate.

Now lets understand the stock market. Every day millions of shares are being traded on the stock exchange. Let us take the example of the sensex or the Bombay stock exchange. Now there may be hundreds of companies listed on the stock exchange but the Sensex is the weighted average of the share price of the top thirty companies on the sensex. The top thirty companies are chosen by the sensex and give us an indication about how most of the stocks are moving on the sensex.

When there are more buyers wanting to buy a stock then sell it then you can expect the stock price to rise where as when there are more people wanting to sell the stock then you can expect the stock price to go down. Remember the current stock price is the last traded price at which some one bought the stock and some one sold it to the buyer.

Share Trading TermsBuy/sell quote: Generally analysts or equity research specialists give buy sell recommendation to investors about the stock. Buy price is the price at which you should buy the stock and sell price at which you can sell the stock.

Bid/offer price: Bid price is the price at which you can sell the shares and offer price is at which you can buy the shares.

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