Frequently asked questions and answers

Q: What is a limit order?

A: A limit order is an order placed with a broker to buy or sell a stock at a specific price. This can help ensure that the trade is executed at the desired price or better.

Q: What is a margin account?

A: A margin account is a type of brokerage account that allows investors to borrow money from the broker to buy stocks. This can increase potential profits, but also comes with increased risk.

Q: What is a stock's beta?

A: A stock's beta is a measure of its volatility relative to the overall market. A beta of 1 indicates that the stock's price moves in line with the market, while a beta greater than 1 indicates that it is more volatile than the market, and a beta less than 1 indicates that it is less volatile than the market.

Q: What is stock trading?

A: Stock trading is the buying and selling of shares of publicly traded companies on stock exchanges. Investors buy stocks in the hopes of profiting from increases in the stock's price or dividends paid by the company.

Q: How do I start trading stocks?

A: To start trading stocks, you'll need to open a brokerage account with a reputable broker. You'll then need to fund your account and research and select the stocks you want to trade. It's important to have a solid understanding of basic investing principles before you start trading.

Q: What are some popular trading strategies?

A: There are many trading strategies, but some of the most popular include: Day trading: buying and selling stocks within the same trading day to take advantage of short-term price movements - Swing trading: holding stocks for several days or weeks to take advantage of medium-term price movements - Value investing: buying undervalued stocks with the expectation that their price will rise in the future - Growth investing: buying stocks with high growth potential and holding them for the long-term

Q: What is a stock's dividend?

A: A stock's dividend is a portion of the company's earnings that is paid out to shareholders. Not all companies pay dividends, and those that do may pay them on a regular or irregular basis.

Q: What is a stock's P/E ratio?

A: A stock's P/E (price-to-earnings) ratio is a valuation ratio that compares a company's stock price to its earnings per share. A high P/E ratio can indicate that the stock is overvalued, while a low P/E ratio can indicate that it is undervalued.

Q: What is a stop-loss order?

A: A stop-loss order is an order placed with a broker to sell a stock when it reaches a certain price. This can help limit losses in case the stock's price falls below a certain level.