Page 9 - Trading Made Easy
P. 9
HOW THE STOCK MARKET
WORKS
The stock market brings together buyers and sellers,
enabling them to exchange securities, which is the group
name for all investment products like shares, bonds,
investment trusts and exchange traded funds.
Securities can be listed on a stock exchange, such as the
Johannesburg Securities Exchange (JSE).
The JSE was formed in 1887 and is currently ranked 19th
largest stock exchange in the world and the largest
exchange in Africa.
Traders make money by buying the stock before the price
goes up, and then they sell it before it goes back down.
The price of the stock reflects the availalbe information
about the financial health of the company.
Traders watch the stock rise and fall and make decisions to
make a profit
HOW TRADERS MAKE MONEY
If you sold your stock on the day when the price of that stock
is higher than the price you paid for it, you would make
money.
HOW TRADERS LOSE MONEY
If you sold your stock on the day when the price of that stock
falls below the price you paid for it, you would loose money
