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Glossary
Stocks
Definition
Financial instruments that represent partial ownership of a company (also known as equities or shares).
What are stocks?
Stocks represent shares of ownership in a company. When individuals buy stocks, they become shareholders and acquire a portion of the company's assets and earnings. Stocks are traded on stock exchanges and are a fundamental component of many investment portfolios.
Why are stocks important to consider when trading?
Stocks are essential for trading as they offer potential for capital appreciation and dividends, making them a key tool for wealth creation. They allow traders to invest in companies they believe will grow in value over time. Trading in stocks also provides liquidity and the flexibility to adjust portfolios quickly in response to market changes. Understanding stock market dynamics is crucial for traders to make informed decisions, manage risk, and capitalise on market opportunities.