Wednesday, October 3, 2007

Pros And Cons Of Stock Trading

Whenever a company issues stocks, it is an attempt to raise capital in order to invest in some endeavor. All over the world the stock market works on this basic premise. When a company needs money, it will simply offer the stock and the options thus purchased will entitle the stock holders to a percentage of the profits, once the entire concern gets going.

The Internet has made things much faster and removed all geographical restrictions. Trading now takes place 24/7 because some part of the world is always busy with business. The Internet also makes it easier for anyone to take part in stock trading. Leading stock market firms also send daily emails with tips to their customers on how the market is expected to move today.

Every one has heard about stock trading but very few people actually know of the advantages of getting involved. Like any business venture, stock trading is not all advantageous and it is important to know both the pros and cons of stock trading.


Instant Returns

Active stock trading means you get almost immediate return on investment. You get better returns in a short time as opposed to buying and holding your investment for years at a stretch.


Through the Internet you can trade in any part of the world. You have no restrictions on the type of stock you trade in or what currency you trade in. You can browse the Internet looking for constantly moving stocks.


You already know most of the companies offering stocks so you are not on strange ground. With a little time you can understand the micro dynamics to trade effectively.



Stock trading leverage is very low when compared to Forex trading or futures trading.

Short selling

There is a rule against short selling that entails waiting before the price picks up again. This essentially limits the amount of profit a trader can make. There is no such constraint in Forex trading.


There is a substantial cost associated with stock trading that is unique to this market. This can quite often make stock trading impossible for almost everyone. You will need some amount of money before you can start investing in the stock market.

All trading stock, Forex, futures, involves some amount of risk with their own sets of pros and cons. It is up to you as a trader to evaluate all these issues before you begin trading.

Alan King is a writer that concentrates on helping people better themselves, for cutting edge information you NEED to know about stock trading before you try to cash in on this multi TRILLION dollar industry I strongly suggest that you check out my friend Mark Crisp's awesome free 9 page e-book at