What is Stock Trading?

Trading Derivatives on stocks offers traders the opportunity to trade company shares and potentially profit from price movements without owning the underlying asset. Derivatives have given traders the opportunity to access the market in a more cost-efficient and time-efficient way.

Each share has a price usually determined by the supply and demand of the company’s shares in the market based on its current or predicted future performance. Their price can be influenced by a number of factors such as company news, earnings and wider market events.

Traders can take long or short positions and take advantage of rising as well as falling share prices.

The benefits of stock trading

  • Liquidity
    Investors can buy or sell their investment for cash with relative ease.
  • Capital Growth
    When the stock goes up, shareholders sell their shares at a profit.
  • Advantageous Tax Treatment
    Dividend income and capital gains are taxed at a lower rate than employment income and interest income from bonds.