Trade shares with institutional-grade execution 

Owning shares means that you own a piece of that company and as such, you are entitled to your share of the company's earnings as well as any voting rights attached to the stock.

Companies sell shares because they want to raise money, possibly to expand their business further. They can do this by taking out a loan or issuing bonds, or by selling part of the company - this is known as “issuing stock”.

Shareholders hope that after buying stock in that company, the company’s performance will improve and the shares will be worth more in the future. Because shares provide their owners with a share in a company, they are also referred to as equities, or the equity market. This is to differentiate them from bonds, which are also issued by companies, but do not provide equity.

There are two different ways to trade shares with StoneX Trading: as a spread bet or CFD trade, which are leveraged products and mean that you do not own any of the underlying assets. 

Trading shares

An Initial Public Offering (IPO) is when a company’s stock is first issued. Markets often get excited by initial public offerings, or IPOs. This represents the first time a stock is listed on the market. Shares are sold initially via subscription, where investors can apply for shares. After that, they can be bought and sold on the stock market as usual on a stock exchange.

Shares can be bought or sold on a stock exchange, via a broker. Well known stock exchanges include the New York Stock Exchange (NYSE), London Stock Exchange (LSE) and NASDAQ.

Dividends

Shares pay out dividends to their owners. This is usually done on a regular basis – e.g. quarterly. It represents a share of the company’s profits being paid back to its ultimate owners, the shareholders. Companies are not obliged to pay dividends, but many do so on a regular basis, which means their stock is also prized because of its income characteristics.

• Special dividend – a dividend paid out by companies when they are feeling particularly cash-rich, not a regular dividend.
• Share split – a company splits shares into smaller ones, frequently because they are becoming too expensive which can limit trading.

Who trades shares?

Shares can be bought and sold openly by retail investors through a stock exchange using a broker. However many shares in companies are bought by financial institutions such as banks, pension funds and institutional investors.