| Companies across the world issue shares in order to | | | | option. The broker is involved here also. A person can |
| increase the capital. When a company issues shares, | | | | save, time, fuel and energy through this option. |
| then public is allowed to buy or sell these shares. | | | | 5. Brand Name: Companies have a advantage of |
| These dealings are called share trading. There is | | | | shares. They can show the growth of the company |
| always a broker involved. The prices for these shares | | | | through price fluctuations f the shares. |
| keep changing. It can rise and it can fall drastically | | | | Disadvantages: |
| depending o the market forces of demand and | | | | 1. Limitation to Short Sell: Yes, this kind of limitation is |
| supply. As the coin has got two sides, share trading | | | | faced by traders in this case. It is essential for a |
| also have got its own advantages and disadvantages. | | | | investor to wait till the price rise of a particular share |
| Let us understand both the sides. | | | | before he can actually short sell it. This acts like a |
| Advantages: | | | | limitation for the trader. |
| 1. Good Returns: one can expect good returns if the | | | | 2. Loss: One can face losses if the value of shares |
| shares are purchased intelligently. One can buy the | | | | purchased instead of increasing falls down. A person |
| shares when the prices are low and can sell them | | | | needs to sell the shares at a price more than the |
| when prices rise. Hence one can control good returns | | | | price he bought the shares for. In case, he sells the |
| by holding the shares. | | | | shares at a lower price then it is always loss for him. |
| 2. Easy: the concept of share trading is not very | | | | 3. Uncertainty: There is a lot of uncertainty involved |
| complex. As a new investor, one can easily | | | | in share trading. This is because a lot of things can |
| understand this trade and can earn money through it. | | | | impact the prices of the shares. Things like |
| 3. Wide Variety: There are array of companies to | | | | government polices, political pressures etc can change |
| choose from. There are numerous companies who | | | | the price of the shares. Hence, everything is very |
| issue shares almost everyday. The demand for | | | | uncertain. It is a risky trade with only two outcomes: |
| buying shares is high in the market. With this kind of | | | | profit or loss. |
| huge variety, an investor can choose the best one | | | | People who involve in this kind of trade should always |
| which matches his strategies and planning. | | | | be prepared to face risk. More risk means more |
| 4. Electronic Exchange: One gets an option of buying | | | | profit and vice versa. |
| and selling shares online through electronic exchange | | | | |