The traditional medium where stocks are exchanged between a stock market and a trader. In Nigeria, this is known as bourse or stock market which has stretched overtime to cryptocurrency trade in reference to stock trading in Nigeria. The Nigeria Stock Exchange (NSE) is among the largest stock markets in South Africa with most traded stocks being oil. It features many companies from different industries. The NSE is one of the many homes to traders who perform the actual transactions that allow investors to buy and sell shares of stock.
What Forex Trading exactly is
This is an organized and regulated financial market where shares or bonds are bought and sold at prices governed by the laws of demand and supply. This form of trade basically serves as primary markets where corporations, municipalities, governments, and other incorporated bodies can raise capital by investors venturing into their products and other markets where investors can sell their securities to other investors for cash, thus reducing investment risk and maintaining system liquidity.
The process of Stock Trading
As time has gone by buying stock on exchanges like NSE is not the same as most of the other purchases. One is required to hire a brokerage firm to buy the stock an example in this case ARM securities. Different brokers offer different levels of support and advice to their clients, therefore, it is very important to choose the proper level of support for needs. Once a broker is hired they will be responsible for any form of trade one is willing to make (buy or sell), more or less similar to the CFD stock trade.
In Nigeria, the citizens are mostly expected to follow a detailed procedure as follows (it depends on the organization or trading site used):
- Find a stockbroker to open a brokerage account.
- Complete the Central securities Clearance Systems.
- Fund their stock brokerage.
Nigeria has also welcomed online trading brokers such as ForexTime and more investors have opened trading accounts online. This is expected to reduce the traffic of brokers at the NSE headquarters.
Nigeria being among the leading countries to thrive in stock trading is advisable for one to understand three main segments in the stock trading market.
- Primary market. In this segment, market securities are initially created. It is an open stock market where a company’s shares are offered and sold for the first time and are issued by the company. To be listed as a primary listed company that gives to a company’s credibility and therefore open doors to investors being more predisposed to purchasing shares in that company.
- Secondary market. Here investors trade the stocks themselves and the company that had previously sold the stock initially is not directed to the person in the transaction. Trading shares that are already owned by investors is the typical idea of the stock market. This is most common to markets issued from the primary market.
- OTC market. Also known as the off-exchange, is more or less an option for investors to take part in the trading of stock form a decentralized market. A decentralized market is where a transaction will take place between two traders. Transactions are generally done electronically more or less similar to Forex trading. This market is mostly for stocks and stock prices not commonly listed on the stock exchange market.
Trading stock is an encouraging experience when the stock price increases and one sees their investment making money. However, the risk is inevitable thus it is crucial to understand that one can lose money in the stock market. This means buying stock in several companies and industries rather than trusting all funds in one place and these days with the contract of difference which is much safer.