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20.03.2020

Modern Securities: What Is It?

Modern stocks are quite different from those people who are far from the securities market are used to imagine. In reality, only bills of exchange and savings certificates used by banks still exist in their hard form. Everything else has long lost its physical form and become digital. Now it is impossible to buy a portfolio of stocks and get it in physical form.

The purchase process now is merely a process of obtaining a record:

-  in a special company registry,

-  on the exchange,

-  at the broker's depository — on a separate account for storing securities.

Though a buyer doesn’t really receive securities in the hard form, he still receives legal rights to use them and resell them.

How to Buy Stocks?

Purchase of stocks by a private person is prohibited by the law. To do this, you need to use the services of a broker — an intermediary company that provides individuals with access to the exchange and opens related accounts: brokerage and depository. In fact, all transactions are made by a broker, but only on behalf of a trader. There are several ways to place an order:

-  Calling a broker is not a quick, but expensive method — a $25 commission is charged for it.

-  By e-mail — there is still a lag between sending such an order and its execution, so you can lose some profit, especially when trading during the day.

-  In trading terminal — special software for a PC or a smartphone that provides a direct Internet connection to the server and provides instant transactions. This method is the most convenient, since it additionally provides statistics tools to evaluate your trade performance.

-  Through broker's website — modern brokers provide access to the web version of the terminal, and you do not need to install additional software.

Thus, if an individual wants to buy stocks, it will take only 5 simple steps:

1.  choose a broker,

2.  register on its website,

3.  get a unique login and password for access to the exchange,

4.  install a trading terminal — software for a PC or application for a smartphone,

5.  log in to it using the data received.

After logging into his account, a trader immediately gets access to the current quotes and, as soon as his account is funded, he can make the first transactions.

Many brokers and trading terminals also meet the need of novice traders and provide access to a demo account and an account with virtual currency. All this allows you to quickly get used to the stock exchange, understanding how and when it is best to make transactions without a risk to lose real money.

What Stocks Can I Buy?

With access to the stock exchange, a trader can buy any listed stocks. The most logical and profitable investment is the purchase of foreign companies, since currency prices are protected from the depreciation of the ruble. Russian exchanges provide a limited number of such instruments, so you’d better choose a broker who can provide access to US exchanges. Trading on the US market, it is much easier to find a company with steadily rising shares.

The most profitable and demanded today are shares of leading companies in certain industries: Apple, Google, Microsoft in the tech sector, TeslaMotors in mechanical engineering, Coca-Cola and McDonalds in the food industry.

A riskier way is to buy stocks of potentially successful companies, which are not too well-known and are cheap enough, but have every chance of fast growth. In other words, they can skyrocket, bringing considerable income to shareholders who invested before the expected growth. However, in order to make profit, you should have skills to find such a promising small company and predict its growth.

How to Sell Securities?

Working through a broker, an individual can not only buy stocks easily, but also sell them. To do this, you just need to submit an order for sale in a trading terminal, setting your own price or choosing the option with automatic setting of the market price.

In fact, the process of buying and selling is quite easy and almost every modern man can do this. The most difficult thing is to choose the right moment of sale and purchase. It is the matter of experience, and anyone can easily gain it by participating in trade.


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