A stock exchange involves buying and later reselling stock and indices. For instance, you buy 100 shares at $10 per share, you pay totally $1,000. After a while, the price of the shares increases to $12, and you sell your 10 shares at $1,200. You make a profit of $200. This is a simple example of how to make a profit on the stock market.
A stock market is a place to buy and sell shares. It is composed of stock exchanges and online trading systems.
A broker is an intermediary between a buyer and a stock seller charging a fee for brokerage.
Stock Market Trading
A stock exchange operates with high-liquidity stock being in good demand and belonging to large stable and reliable corporations. Trading these companies’ stock reduces a trader’s risks. However, the stock doesn’t yield a high profit because fluctuations on the market are relatively predictable. The fees are higher than charged in online trading systems.
The largest stock exchanges
- NYSE – New York Stock Exchange;
- NASDAQ — AMEX – National Association of Securities Dealers Automated Quotations and American Stock Exchange.
- LSE – London Stock Exchange;
- TSE – Tokyo Stock Exchange
- DB Deutsche Boerse or Frankfurt Stock Exchange;
- SEHK – Hong Kong Stock Exchange.
While stock trading is done in a special building, online trading uses a vast telecommunication network ensuring data for trading.
All trades are made via a dealer outside the stock exchange building. A bank or a broker can act as a dealer. For instance, the world’s largest online trading system is the NASDAQ which stands for the National Association of Securities Dealers Automated Quotations.
If you are a private person, but not a legal entity, you can’t trade shares on a stock exchange or online. Only officially registered brokers are entitled to do this. The minimumamount brokers deal with is $5,000 and generally $50,000. Some brokers offer to start trading with a small investment amount. However, it generally yields a low profit.
If you want to sell your shares via a notary, you have to pay a 10% fee and for valuation. To cover these expenses, an amount of a trade is to be high.
If you buy, say, a block of shares, not just one share, you pay a lower fee. On the other hand, you need a lot of money to buy a block of shares.
On the stock exchange, indices are traded similar to the stock. Each country supplying stock to the market is included in the index basket generally composed of the shares of at least ten largest companies.
A stock index is a numerical and alphabetical change in the index basket price.
How to Calculate a Stock Index
The easiest way of calculation is to add prices of all index basket assets and divide the total by the number of assets.
Each stock exchange uses its own indices showing the status of the stock exchange in its country. Typically, traders deal with the most significant indices precisely mirroring the state of the economy.
- DJIA (Dow Jones Industrial Average – the Dow) in the United States;
- NASDAQ Composite (National Association of Securities Dealers Automated Quotations) in the United States;
- S&P 500 (Standard and Poor’s 500 Index) in the United States;
- FTSE-100 (Financial Times Stock Exchange 100 Index) in Great Britain;
- DAX (Deutscher Aktienindex) in Germany;
- CAC 40 (Compagnie des Agent de Change 40 Index) in France;
- Nikkei 225 in Japan;
- SMI (Swiss Market Index) in Swiss;
- RTSI (RTS Index) in Russia.
How to Make a Profit on the Stock Market
The ways to make a profit on stock
Investment means putting money in a company to have the right for partial control and a regular return. If market capitalization of a company increases, investment yields a higher return.
E.g. In 2000, an investor bought 100 shares at €354 amounting to €35, 400. In 2007, the price of the shares grew 3.1 times, that is, €111,4.8 . This means that the investor’s capital amounted to €111,4.80 , and his return €111,480 — €35,400 = €76,080.
Along with the profit, the investor was paid out a dividend.
On average, the stock market yields 20% per annum.
Binary Options and Stock Market
Only a few of traders can afford to buy shares. However, there is a simple way to get access to the stock exchange. You can just buy a binary option at a reasonable price.
A binary option means total freedom for an investor.
This is a relatively new way of online trading allowing an investor to make a 70% profit in 15 minutes. If you are looking for a chance of raising a profit on the stock exchange, then binary options is what you need.
The most important thing about binary options is your choice of CALL (Higher) or PUT (Lower) – you have to choose whether the price of an underlying asset will rise (CALL) or fall (PUT) during a chosen period. How much you will make or lose, you know even before you buy an option.
You can buy an option for a minute, 2, 5, 15, 30 minutes, 1 hour, 1 day, 1 week, 1 month or even longer. Putting in money for these periods, youcan get a high yield. Investors make a 500% profit within a day because they can reinvest their capital many times.
The first top binary option broker is AnyOption. This broker offers over 200 assets including popular indices and stock of the companies like facebook, Google, Microsoft, commodities like crude oil, gas, wheat futures, sugar etc.
The key point of the binary options is simplicity. You don’t have to switch between the pages, you can invest directly on the main page. Everything is simple and easy to understand for a newbie including a price chart, a price of anunderlying asset at the current moment, different time of expiration to choose and expected profit and loss. You just need to click on the UP or DOWN button. That is, the price goes up or down.
As you can see, there is nothing difficult. Moreover, to trade binary options is much easier than to trade on the stock exchange because you make a profit no matter how much the price will rise or fall, what matters is that the price moves up or down.
If you buy a CALL option on Gazprom stock for 15 minutes and in 15 minutes, by the moment of expiration, the price of the stock rises (how much doesn’t matter), you make a 70% return on your investment. Even if the price rises by 0.001 pips!
Through my own example, I’ll show you how I made a profit on binary options.
So, I browsed the broker’s website and selected Amazon stock, the world’s largest online retailor. Then, I set expiration of the binary option as nearest. The chart showed that it was 7:09 p.m., а the options was to expire at 7:30 p.m., which meant that I invested for a period of 21 minutes:
I decided to follow the trend and forecast that the stock price would keep rising next 21 minutes. Finally, I typed the investment amount (minimum investment in a binary option is $25) and clicked on the CALL button because I expected the price to rise.
At 7:35 p.m., I checked the result:
As you can see, the price of the stock increased, and I made a 81% profit in just 21 minutes. My net profit amounted to $64.8!
On this website, I give many examples of how I made a profit showing that this is really easy.
How to make a profit on the stock exchange? A binary option is the best way to earn on the stock exchange.
In most cases, you just need to listen or read the latest news.
For instance, Apple starts selling a new iPhone . The day before you can buy a CALL option on Apple stock because its stock will undoubtedly rise. This is how I made money on binary options on one of the world’s largest company stock.