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Stocks [message #76337]

Mon, 05 April 2004 23:14

gibberish
Messages: 366
Registered: May 2003

Karma:

Commander

In very simplistic terms think of stocks like a foreign currency.

Assume your American and the foreign currency is British pounds for this example.

Lets say you have 10 Dollars and you want to by some Pounds (or stock).
Lets say the value of the Pound (or stock) is currently 2 Dollars.
So you get 5 Pounds for your 10 Bucks.
Then lets say the pound (or stock) increases in value to 3 Bucks.
You can now sell them back to get 15 dollars.
Alternately the Pound could drop against the dollar in which case if you sell them you will loose money.

Just like when you change money at a bank, stockbrokers charge a commission on every trade, so the stock actually has to move in the right direction before you can even break even on the trade.

What stocks actually are is ownership in a company, basically if all of the available stock in a company was made available to the public and you were to buy it all, you would now own the company. When a company is doing well it is perceived to have a higher value so the stocks go up, when it is doing badly the value is perceived to be lower, hence the stock price goes down, but the bottom line is that a stock is only really worth what someone is willing to pay for it, so if no-one is willing to buy the stock, it has no value.

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[Message index]

		Stocks By: IRON FART on Mon, 05 April 2004 21:50
		Stocks By: Crimson on Mon, 05 April 2004 21:51
		Stocks By: IRON FART on Mon, 05 April 2004 21:52
		Stocks By: Hydra on Mon, 05 April 2004 22:24
		Stocks By: gibberish on Mon, 05 April 2004 23:14
		Stocks By: IRON FART on Tue, 06 April 2004 12:59
		Stocks By: Crimson on Tue, 06 April 2004 13:31
		Stocks By: IRON FART on Tue, 06 April 2004 22:39
		Stocks By: cheesesoda on Wed, 07 April 2004 12:57
		Stocks By: Fabian on Wed, 07 April 2004 18:01
		Stocks By: SuperFlyingEngi on Wed, 07 April 2004 18:52
		Stocks By: Crimson on Thu, 08 April 2004 02:56
		Stocks By: gibberish on Thu, 08 April 2004 09:39
		Stocks By: SuperFlyingEngi on Thu, 08 April 2004 13:36
		Stocks By: Crimson on Thu, 08 April 2004 14:31
		Stocks By: SuperFlyingEngi on Thu, 08 April 2004 15:10
		Stocks By: Crimson on Thu, 08 April 2004 15:22
		Stocks By: gibberish on Thu, 08 April 2004 17:39
		Stocks By: Battousai on Fri, 09 April 2004 09:06
		Stocks By: IRON FART on Fri, 09 April 2004 21:42
		Stocks By: cheesesoda on Fri, 09 April 2004 21:49
		Stocks By: cokemaster on Fri, 09 April 2004 21:57
		Stocks By: frijud on Mon, 12 April 2004 12:21
		Stocks By: Hydra on Mon, 12 April 2004 22:38
		Stocks By: frijud on Tue, 13 April 2004 12:18
		Stocks By: SuperFlyingEngi on Tue, 13 April 2004 14:52
		Stocks By: Crimson on Tue, 13 April 2004 16:39
		Stocks By: Crimson on Tue, 13 April 2004 16:51
		Stocks By: Crimson on Tue, 13 April 2004 17:06
		Stocks By: IRON FART on Tue, 13 April 2004 18:02

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