LATAMArtículos (5)
Cómo negociar acciones
<p>La negociación de acciones siempre ha sido una actividad popular para generar ingresos pasivos, y la pandemia de COVID-19 solo aumentó su demanda. Según diversas investigaciones, al estar en casa o ser despedidas de sus trabajos, las personas comenzaron a buscar activamente otras formas de entretenimiento e ingresos.<br /> <br /> El número de usuarios de aplicaciones de trading de acciones casi se ha triplicado desde 2019, y los sitios web con contenido educativo sobre mercados financieros han visto un aumento cuatro veces mayor en el número de visitas. Sin embargo, no muchos sitios web ofrecen una explicación amigable para principiantes del concepto.<br /> <br /> En nuestro artículo, pretendemos ayudar a los operadores inexpertos a comprender cómo negociar acciones mientras exploramos lo básico y nos enfocamos en una de las formas más populares de hacerlo: la negociación de acciones con CFD.</p> <h2>¿Cuál es la diferencia entre negociar acciones e invertir en acciones?</h2> <p>En primer lugar, establezcamos la diferencia entre negociar acciones e invertir en ellas, ya que ambas versiones son ampliamente difundidas.<br /> <br /> Muchos operadores utilizan estos términos indistintamente o llaman trading a cualquier actividad relacionada con acciones. Tiene sentido porque ya sea el trading diario con una rápida rotación o una cartera de inversión a largo plazo, el objetivo final es el mismo: obtener beneficios una vez que el precio aumenta.<br /> <br /> Sin embargo, existen diferencias significativas. Por ejemplo, puedes negociar acciones sin comprarlas. Además, también es posible beneficiarse cuando el precio de una acción baja, no solo cuando aumenta su valor. Eso es lo que diferencia al trading de la inversión.<br /> <br /> En ThinkMarkets, utilizamos el término inversión cuando un operador compra físicamente un instrumento. Invertir en acciones significa comprar acciones de una empresa y adquirir su propiedad junto con el derecho a recibir ganancias compartidas si sus acciones pagan dividendos. Por lo general, implica tener un plan a largo plazo: la mayoría de los inversores mantienen sus acciones durante un período prolongado, desde varios días hasta años o incluso décadas, vendiéndolas para obtener beneficios cuando su precio aumenta significativamente. Algunos compran y venden sus acciones regularmente para obtener beneficios más pequeños pero regulares.<br /> <br /> Por otro lado, otros operadores especulan únicamente sobre los movimientos de precios a corto plazo de las acciones sin comprarlas. Llamamos a esta actividad trading, y un buen ejemplo de ello es el trading de CFD.</p> <h2>¿Por qué negociar acciones con CFDs?</h2> <p>La negociación de CFDs es muy popular entre los operadores porque ofrece múltiples beneficios, tales como:<br /> </p> <ul> <li>Oportunidad de capitalizar tanto en precios al alza como a la baja mediante posiciones largas o cortas;</li> </ul> <ul> <li>Acceso al valor subyacente de la acción a un costo más bajo que comprarla directamente mediante apalancamiento;</li> </ul> <ul> <li>No hay requisitos de propiedad, lo que proporciona un acceso rentable y flexible;</li> </ul> <p><br /> Además, la negociación de CFDs está disponible en todos los mercados globales, lo que la convierte en una forma atractiva de negociar múltiples instrumentos a la vez.</p> <h2>Cómo negociar acciones con CFDs</h2> <p>Si no estás familiarizado con el concepto de negociación de CFDs, lo discutimos en detalle en nuestra guía para principiantes en negociación de CFDs.<br /> <br /> Para dar un ejemplo breve, supongamos que decides negociar acciones de Apple. El precio de mercado actual es de USD 152.00.</p> <h3>Posición larga</h3> <p>Si tu investigación sugiere que el precio va a aumentar, abres una posición larga en CFDs (compra). Ten en cuenta que cuando negocias acciones con CFDs, generalmente un contrato equivale a una acción.<br /> <br /> El precio sube a USD 162.00. La diferencia, USD 10, es tu beneficio. Si tu predicción resulta incorrecta y el precio baja a USD 142.00, pierdes USD 10.<br /> <br /> <img alt="" src="/getmedia/b1f80809-53c2-4530-a173-0bc72696d9fa/article-how-to-trade-stocks-long.webp" style="width: 552px; height: 441px;" /><br /> <br /> En los informes de noticias, a menudo se puede escuchar que tal evento se describe como el precio movido por diez puntos, no dólares. Esto se debe a que los movimientos de precios en el mercado de valores se miden en puntos, donde cada punto equivale a USD 1:<br /> <br /> <img alt="" src="/getmedia/d7650b39-5092-497a-acf8-48b96a9e7cf7/article-how-to-trade-stocks-long-formula.webp" style="width: 550px; height: 25px;" /></p> <h3>Posición corta</h3> <p>En el escenario opuesto, puedes realizar una operación corta en CFDs (venta) si crees que el precio va a bajar. Si lo hace, obtienes beneficio, y si se mueve en la dirección opuesta, incurres en una pérdida.<br /> <br /> <img alt="" src="/getmedia/76d9c0a5-929f-41d7-af3a-d1d05dc1b2a6/article-how-to-trade-stocks-short.webp" style="width: 552px; height: 444px;" /><br /> <br /> Como puedes ver, sin importar si el precio de la acción aumenta o disminuye, tienes la oportunidad de capitalizar en sus movimientos de precios porque puedes negociar en cualquier dirección con CFDs.<br /> <br /> En este ejemplo, la abreviatura AAPL es el ticker de acciones de Apple que verás en todas las plataformas de negociación. Es un código único utilizado por las empresas para facilitar la identificación, al igual que USD significa Dólar Estadounidense en el mercado de divisas.</p> <h3>Spreads</h3> <p>También es importante tener en cuenta que dependiendo de si abres una posición larga o corta, el precio inicial será ligeramente diferente. Esto sucede porque cada instrumento financiero tiene dos precios en el trading: compra (oferta) y venta (demanda).<br /> <br /> Un precio de venta indica cuánto dinero recibirías si vendieras una acción, en caso de que la poseas. Por otro lado, el precio de compra significa cuánto tendrías que pagar para comprar una acción. En la negociación de CFDs, ambos números significan el precio de un contrato que puedes abrir. La diferencia entre estos dos precios se llama spread, y es la tarifa que cobra un broker por facilitar la transacción.<br /> <br /> La imagen a continuación muestra un spread de la acción de Apple: 9.0 o 90 centavos.<br /> <br /> <img alt="" src="/getmedia/0d85eb30-6f54-4138-9d19-79d65f072b7d/article-how-to-trade-stocks-spreads.webp" style="width: 552px; height: 151px;" /><br /> <br /> Ten en cuenta que la colocación de un punto decimal es diferente en la negociación de índices y acciones. El mismo spread de 9 centavos en la negociación de acciones se marcaría como 0.9.</p> <h3>Apalancamiento en la negociación de CFDs de acciones</h3> <p>Los operadores de CFDs generalmente negocian acciones con apalancamiento. El apalancamiento significa fondos prestados por un broker para abrir una posición más grande. Para realizar una operación con apalancamiento, solo necesitas cubrir un pequeño depósito llamado margen. Cuanto mayor sea el apalancamiento, menor será el margen.<br /> <br /> Por ejemplo, si operas con un apalancamiento de 30:1 en nuestro ejemplo anterior, solo necesitarás pagar una trigésima parte de USD 152.00, o USD 4.56, para negociar una acción de Apple que vale más de cien dólares.<br /> <br /> <img alt="" src="/getmedia/9f8ea23b-31bb-4185-bb37-33774d89a927/article-how-to-trade-stocks-leverage.webp" style="width: 552px; height: 308px;" /><br /> <br /> Tu beneficio no se reduce. Sigue siendo el mismo USD 10, que es más que tu depósito inicial. Es importante entender que si tu operación no tiene éxito, la pérdida también será la misma y superará tu depósito inicial. Por eso, es crucial utilizar herramientas de gestión de riesgos como stop loss y take profit en la negociación de CFDs.<br /> <br /> Sin embargo, antes de comenzar a negociar acciones con dinero real, es recomendable practicar tus habilidades y aprender cómo utilizar herramientas de gestión de riesgos en una cuenta demo sin riesgos cargada con fondos virtuales. La plataforma de trading propia de ThinkMarkets, ThinkTrader, ofrece más de 3,000 acciones globales y condiciones de negociación favorables para principiantes y traders experimentados.<br /> <br /> Si estás buscando consejos sobre cómo identificar oportunidades de negociación en acciones, echa un vistazo a nuestro artículo “¿Qué afecta los precios de las acciones?”, donde explicamos los factores que afectan sus precios.</p>
10 Tips to Successful Trading
<p>A solid plan for your online trading activities will provide a blueprint for your trading activities and define your goals.<br /> <br /> This, in turn, will help you stay on track and potentially avoid an undesirable outcome. Creating a trading plan involves a lot of moving parts.<br /> <br /> Creating a successful trading plan takes a little more than that. In this day trading guide, we’ve outlined ten essential steps every trading plan needs to have.</p> <h2>1. Understand the market <br /> before you start trading</h2> <p>A solid understanding of the financial market you are going to trade on is crucial for building a good trading plan. Having a strong knowledge base will help you navigate a large volume of information in a trading world confidently and make educated trading decisions.<br /> <br /> No matter what financial instruments you choose for your trading journey – forex, indices, commodities or others – there are three main points any day trader needs to focus on:</p> <ul> <li>Market terminology</li> <li>Unique traits of the market</li> <li>Factors influencing price movements</li> </ul> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/circle.jpg" /></div> <p>For example, in forex, price movements are measured in pips, while in all the other markets, they are measured in ticks or points. This unique trait of each market requires an understanding of the market terminology.<<br /> <br /> Factors influencing price movements in each market will also vary. Forex, for instance, is heavily influenced by economic reports from the home countries of the traded currency pairs, while the prices of commodities are highly dependent on supply and demand. As a result, forex will move in large swings when economic reports are released, (especially reports from the US, Eurozone, or Japan), and commodities will see a lot of movement after the announcements of shortages in supply. To identify trading opportunities presented by such events, you need a clear understanding of what exactly influences each market.</p> <p>A good starting point to learn the basics of trading for beginners can be the trading guides on our website. Keep your demo account open as you go through any new information, and try to apply it in practice whenever possible.</p> <h2>2. Determine market conditions</h2> <p>Evaluating market conditions, in a nutshell, means identifying strong trading signals that present trading opportunities. To determine it, you need to be able to analyse the market you selected.<br /> <br /> There are two main methods of doing it – fundamental and technical analysis. The main difference between the two is the type of data used to predict future market movements.<br /> <br /> Technical analysis is based on the past price movements of an instrument, while fundamental analysis studies economic and financial factors that may affect the markets in future.</p> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/fundamental_analyse.jpg" /></div> <p>At first, analysing financial markets may seem complicated and even intimidating. However, like with any other complex topic, you can start with a basic approach and advance little by little once you start getting a better understanding of how financial markets work.<br /> <br /> If you are just getting into day trading for beginners, it may be easier to start with news trading, identifying support and resistance levels and understanding some basic chart patterns. On the other hand, advanced traders can find trading signals in complex economic reports and technical indicators. Regardless of your experience level, you need to have a clear understanding of the analysis process you use before you start relying on it.<br /> <br /> However, whether you choose fundamental analysis, technical analysis or a mix of the two, it’s important to note that neither provides a guaranteed trading outcome. Any market analysis only indicates a potential price movement and could help determine your entry point.</p> <h2>3. Know where to enter the market</h2> <p>In trading, the entry point refers to the price level you are willing to open a trade at. While doing your market analysis, you will often see that sometimes the markets are primed for trading, while at other times it may be best to stand aside. If the trading signal you have identified is strong, you can open a trade right away. However, if you are unsure of the current market conditions or the available information is providing conflicting signals, it could be better to hold on and wait for a trade with a stronger signal.<br /> <br /> There will also be times when the signal seems strong, but your desirable entry point is not available on the market yet. In this case, you can place a pending order that will be executed only once the price reaches your specified level. Pending orders can help you manage risk and ensure that you enter the market according to your predetermined plan.<br /> <br /> To get some insights about the entry points as a trader, you can also keep an eye on the regular <a data-di-id="di-id-788ae628-c73859d3" href="/en/market-news/" rel="noreferrer noopener" target="_blank">market news</a> posted on our website by trading experts. Financial markets are unpredictable, and even experts can't guarantee the next price movement. However, they share valuable tips that may help you adjust and fine-tune your trades.</p> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/laptop.jpg" /></div> <h2>4. Assess your risk appetite</h2> <p>New traders tend to have a strong aversion to risk and often focus too heavily on losses or, worse, refuse to close a losing position. They increase their risk exposure and believe that the market will return in their favour. Successful traders know there is a potential risk in every trade.<br /> <br /> That’s why setting an appropriate risk level before you start trading and sticking to it is one the most important steps of creating a day trading strategy. A wise day trader won't risk more than they can afford to lose.<br /> <br /> Determining how much of your capital you can risk per trade depends on your total trading account size and experience. Many traders use a 1-3% risk level as their control point, but beginners usually start with 1% to get comfortable with the idea. For example, if your trading capital is USD 10,000, you might decide to risk 1% per trade, which would be USD 100. However, this percentage should be based on your individual risk tolerance and trading strategy.</p> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/risk-appetite_1.JPG" /></div> <p>It is not uncommon to experience strings of wins and losses, but whether you have a good day or your predictions are incorrect, it should not change your pre-determined risk level.</p> <h2>5. Understand your risk/reward ratio</h2> <p>A risk/reward ratio is a balance between how much you are willing to lose in order to gain a certain reward. Once you know your risk level, the next step is to set a desirable reward level. Just like with a 1-3% risk level, a 1:3 risk/reward ratio is widely considered appropriate among traders.<br /> <br /> It means you should expect no more than three points of return for every point you risk. So with a trading capital of USD 10,000 and a risk level of 1% (USD 100), your target return should not exceed USD 300. However, beginners often prefer to start with a lower reward level as well and set their risk/reward ratio to 1:1, which is USD 100 as a target return for every USD 100 of risk.<br /> <br /> In many cases, a reasonable reward goal will also depend on the instrument and market you are trading on. For example, you shouldn’t expect a 300-point price move from a market with a 100-point average range.</p> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/risk-reward-ratio_1.JPG" /></div> <h2>6. Control your trading capital</h2> <p>The price movements on any trading market are outside your control as a trader. What you can control is the negative or positive impact any one of them has on your trading account. Risk management tools, such as stop loss and take profit, will help you keep your risk/reward ratio in check and avoid undesirable and unpredicted results.<br /> <br /> Generally speaking, every trade you place has only three possible outcomes:</p> <ul> <li>The market goes in your favour = you gain</li> <li>The market moves against you = you lose</li> <li>The market trades sideways = no gain and no loss</li> </ul> <p>To have control over your trading account, features are available to use such as take profit to lock your gains in successful trades and stop loss to limit your losses if the market moves against you.<br /> <br /> Following our previous example, for the trading account of USD 10,000 with a 1:3 risk/reward ratio, your stop loss could be set to USD 100 and take profit to USD 300. While many trading platforms will automatically calculate and display potential profit and loss for set take profit and stop loss levels, it's important for traders to understand how these levels relate to the price movement of the asset they are trading.<br /> <br /> As we mentioned earlier, following your predetermined risk level without changing it for already running trades is crucial. Many traders have made the unfortunate mistake of adjusting stop-loss orders lower and lower on a losing trade until they hit the point of ruin. Whereas other traders have adjusted take-profit orders higher and higher just to see their profits vanish as a trade quickly reverses against them.<br /> <br /> Sometimes you will find yourself in a third scenario, where the instrument you are trading on moves sideways for an extended period without bringing you the desirable gain and not triggering your stop loss. In such cases, traders often prefer to exit such trade manually, re-evaluate their trading plan and wait for a stronger trading signal.</p> <h2>7. Document your trading plan</h2> <p>The easiest way to re-evaluate your day trading plan is to go through each and every step of it and check whether the information you determined earlier is still relevant. That’s why documenting it is essential.<br /> <br /> Here are some example steps that could be included in any trading plan:</p> <ul> <li>Previous trading session review</li> <li>Existing trading opportunities analysis <ul><br /> <br /> <br /> <br /> <br /> <br /> <br /> <li> </li> <li> </li> <li> </li> <li> </li> <li>Macro-analysis of the current market – news, economic reports, other factors that impact markets</li> <li>Micro-analysis of the current market – review of charts and technical indicators</li> </ul> </li> <li>A defined entry point</li> <li>A defined risk you are comfortable with per trade</li> <li>Defined stop loss and take profit levels</li> </ul> <p>Every trading plan is unique and depends on the personal goal of a trader. You may follow the same steps or create different ones to match your personal trading needs – no matter which option you choose, documenting it could still help you stay on track.</p> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/checklist_1.jpg" /></div> <h2>8. Put your plan to the test</h2> <p>Going through the motions of your trading plan is as important as documenting it. Use a demo account of your trading platform to test it in a simulated real-world market environment with no risk.<br /> <br /> Making an effort to practise trading on a demo account can help identify weaknesses in your trading plan and allow you to adjust it where necessary. To give your trading plan a real test, keep in mind that when trading with a demo account, it is critical to follow your plan and execute each step as if you were trading in a live environment.<br /> <br /> That means placing trades only if your plan signals it, respecting all stop-loss and take-profit levels and making adjustments or course corrections only after the end of a trading day, not during it.<br /> <br /> Many beginner traders make the mistake of not treating their demo account with the same discipline and mindset they would have for their live account with real money. As a result, when the same trading strategy is applied to a live trading account, the results will differ greatly compared to the demo account. Moreover, not following the predetermined actions will make it much harder to review and analyse your trading session later.<br /> <br /> That’s why it is important to stick to your trading plan to prepare yourself for transitioning from a demo account to live.</p> <h2>9. Remove emotions from the equation</h2> <p>Uncontrolled emotions are one of the key reasons traders abandon their trading plan and fail to achieve the outcome they seek.<br /> <br /> When you begin to trade, it is important to remove any non-related or outside influences from your environment to allow yourself to trade with a clear focus and have a better trading experience.<br /> <br /> Seasoned traders apply various techniques to eliminate emotions from day-to-day trading and follow the structure and discipline provided by a well-thought-out trading plan. Some of them use a daily ritual, such as a short checklist related to their trading plan. Others use a brief physical exercise to help clear their mind and sharpen their focus. It can be anything else that works for you personally as long as it helps to achieve the main goal – developing a process that will help you execute each and every step of your trading plan without deviation. Like any new skill you are learning, your trading process will soon develop a natural flow and become second nature as long as you stay true to it.</p> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/emotions.jpg" /></div> <h2>10. Find out what type of trader you are</h2> <p>nce you run your trading strategy a few times, you will start noticing that some trades work better for you than others. That’s when you know it’s time to find out your trading personality.<br /> Understanding your own trading personality can help you achieve the most positive experience and results from your trading. Some traders are better suited for high-volume, short-term trading, while others thrive using a slower long-term style.<br /> <br /> Determining what trading style works better for you is just as important as knowing the personality of the market you decide to trade on. There are many assessments available online to help you learn more about yourself in a trading environment, as well as numerous books and articles written on trading psychology and behavioural finance. Explore who you are as an individual and how that can apply to your trading psychology and strategy.</p> <div class="text-center"><img class="w-75" src="/TMXWebsite/media/TMXWebsite/human_1.JPG" /></div> <h2>Bonus: 11. Apply discipline and consistency</h2> <p>There is no ultimate success route to trading, but as with many things in life, being disciplined and consistent could be seen as key. It may take more than one try and some patience to find out whether a certain strategy is working.<br /> <br /> Beginner traders often give up on their plans as soon as they face their first loss and move to another strategy hoping it will work better. Stay disciplined and consistent, study the details of your trading sessions and plan your next steps only with a clear understanding of what works well and what doesn’t.<br /> <br /> Ready to get stated with day trading? Start with ThinkTrader. Our award-winning platform gives access to over 4,000 financial instruments, market news and multiple analytical tools to help you define your trading plan.<br /> <br /> Try it now on the <a data-di-id="di-id-8245fa02-6d05b691" href="https://web.thinktrader.com/account/login" rel="noreferrer noopener" target="_blank">web</a> or download the app [QR code]./p></p> <p style="text-align: center;"><img alt="" class="w-25" src="/getmedia/e1074687-a223-4ed5-a7a2-540d16d4b2cd/QR-code_1.png?width=200&height=200" style="width: 200px; height: 200px;" /></p> <p style="text-align: center;"><a class="button large hollow secondary" data-di-id="di-id-89b33f44-3ddfd855" href="/TMXWebsite/media/TMXWebsite/10-tips-to-successful-trading-pdf.pdf" onclick="DownloadFn()">Download the pdf</a></p> <p> </p>
What are Earnings Reports and How It Affects Stock Prices?
<p paraeid="{b457e087-b4a7-4d4f-9986-2beb6a7fd9a2}{207}" paraid="880894850">Understanding earnings reports provides traders with invaluable information about the financial health and prospects of companies. By deciphering earnings reports, traders can make more informed decisions on buying, selling, or holding stocks, all while minimising risks and potentially maximising rewards. <br /> </p> <p paraeid="{b457e087-b4a7-4d4f-9986-2beb6a7fd9a2}{239}" paraid="517118183">These reports are the financial lifeblood of publicly traded companies, and comprehending their significance is the first step towards making informed trading decisions. <br /> </p> <h2 paraeid="{b457e087-b4a7-4d4f-9986-2beb6a7fd9a2}{249}" paraid="960882141">What Are Earnings Reports? </h2> <p paraeid="{b457e087-b4a7-4d4f-9986-2beb6a7fd9a2}{255}" paraid="1647578478">Earnings reports, often referred to as quarterly earnings or corporate earnings reports, are periodic financial updates provided by publicly traded companies. They serve as a comprehensive snapshot of a company's financial performance during a specific quarter. Companies release earnings reports to fulfill regulatory requirements, maintain transparency, and keep shareholders and the broader market informed about their financial health. <br /> </p> <h2 aria-level="2" paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{6}" paraid="313468375" role="heading">Key Components of Earnings Reports: </h2> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{12}" paraid="173663505">Here are the fundamental elements that make up an earnings report: <br /> </p> <p aria-level="3" paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{18}" paraid="1701304314" role="heading"><strong>Revenue </strong></p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{24}" paraid="1524644434">Revenue, also known as sales or turnover, represents the total income generated by the company. It is a critical indicator of a company's ability to generate income and sustain growth. <br /> </p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{30}" paraid="1417414845"><strong>Earnings Per Share (EPS) </strong></p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{36}" paraid="83483195">EPS is a measure of a company's profitability and is calculated by dividing the net income (profit) by the total number of outstanding shares. <br /> </p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{42}" paraid="1881627272"><strong>Guidance </strong></p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{48}" paraid="1941621333">Guidance, also known as forward guidance, offers a glimpse into a company's expectations and projections for future performance. This forward-looking information can significantly impact investor sentiment and stock prices. <br /> </p> <h2 aria-level="2" paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{54}" paraid="40589137" role="heading">The Impact on Stock Prices </h2> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{60}" paraid="956453565">The release of earnings reports is often followed by market volatility. When a company releases its earnings report, it provides a comprehensive view of its financial performance over a specific period. This transparency allows investors and traders to gauge the company's health, profitability, and growth potential. <br /> </p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{68}" paraid="605736825">Positive results, such as revenue growth and higher-than-expected earnings per share (EPS), often lead to a surge in investor confidence, resulting in an increase in the company's stock price. Conversely, disappointing earnings can trigger a sell-off, causing stock prices to plummet. <br /> </p> <h2 aria-level="2" paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{74}" paraid="194869486" role="heading">Earnings surprises </h2> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{84}" paraid="1465374990">One of the key concepts during earnings season is the notion of earnings surprises. An earnings surprise occurs when a company's actual earnings or revenue differ from analysts' expectations. These surprises can be either positive (beating expectations) or negative (falling short of expectations). Earnings surprises often lead to sharp price movements in the stock market. <br /> </p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{90}" paraid="340778528">When a company reports better-than-expected earnings, it tends to boost investor confidence. This positive sentiment may result in a surge in demand for the company's stock, driving up its price. <br /> <br /> <br /> On the other hand, if a company fails to meet earnings expectations, it can lead to a rapid decline in stock prices as investors may sell their shares in disappointment. </p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{112}" paraid="99863519"> </p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{116}" paraid="619820475">The dates leading to and following the release of Earnings reports present traders with potential market opportunities. They can either go long or short depending on their analysis of the situation. <br /> </p> <p paraeid="{fc04172f-d300-426a-a8b2-dd29a4d1ac02}{122}" paraid="376516497">Ready to trade? Log in to <a href="http://portal.thinkmarkets.com/" rel="noreferrer noopener" target="_blank">ThinkPortal</a> to access your trading platform now! </p>
What are stocks, and how does stock trading work?
<p paraeid="{3905333e-d6ad-49f8-b2a7-46ee067cf7da}{244}" paraid="1767617311">Most people are familiar with the term stock market – it’s a market where you can buy or sell stocks, but there is much more to it than just that. <br /> </p> <p paraeid="{d02067f4-da4e-4032-b7cc-a7294b695deb}{17}" paraid="112530676">Almost every country in the world has its own stock exchange or even multiple exchanges where people can buy and sell stocks, among other financial instruments. <br /> </p> <p paraeid="{d02067f4-da4e-4032-b7cc-a7294b695deb}{33}" paraid="241417236">These exchanges are a regulated environment. In certain countries, the same regulatory bodies that licence online brokers oversee transactions on their respective stock exchanges to ensure transparency and prevent fraud. For example, the United Kingdom’s largest stock exchange, the London Stock Exchange (LSE), is regulated by the Financial Conduct Authority (FCA). Every time a stock is traded (bought or sold), it is monitored by this regulator for discrepancies, ensuring compliance with its policies. <br /> <br /> <br /> What are stocks, and how are they different from shares and equities? In this article, we’ll dive deep into all these details and explain everything a trader needs to know about stocks.</p> <h2>Stocks vs shares vs equities</h2> <p paraeid="{d02067f4-da4e-4032-b7cc-a7294b695deb}{109}" paraid="787304823">A stock is a representation of a company’s ownership. The term stock is often used interchangeably with the term share. However, there is a difference. Stock implies ownership in general, regardless of its size, while a share is a unit of measurement of this ownership. Equity is another term commonly used, and it refers to the total ownership stake in a company without any debt involved. <br /> </p> <p paraeid="{d02067f4-da4e-4032-b7cc-a7294b695deb}{143}" paraid="37962362">For example, you may often see your balance being called equity on trading platforms. In this case, it’s the total amount of funds you own after deducting any loss you may incur if you have open trades. <br /> </p> <p paraeid="{d02067f4-da4e-4032-b7cc-a7294b695deb}{159}" paraid="2087999960">To sum up all three terms – if Apple Inc. were to have 1,000 shares only and you owned 100 of them, you would also own Apple’s stock or a part of its equity. </p> <p><br /> <br /> <img alt="TFMKT-4086-Image1-1.png" src="/getmedia/ec1a6c59-0298-47bd-a30c-d9c992e3979e/TFMKT-4086-Image1-1.png" style="display: flex; margin: 20px auto;" title="TFMKT-4086-Image1-1.png" /></p> <h2>How does a stock work?</h2> <p paraeid="{d02067f4-da4e-4032-b7cc-a7294b695deb}{186}" paraid="772652413">Most companies start as privately held. It can be either an individually owned business, where all assets and hence all the stock belong to one person, or a partnership with two or more owners, where stock is divided between them. In both cases, a company may seek to raise capital and attract investors to expand its coverage and services. To make an investment opportunity appealing, the business raising capital will offer partial company ownership in exchange for funding. In simple words, third-party investors receive some ownership of a company for providing their capital to it. <br /> </p> <p paraeid="{1199522b-70e2-4b7d-9954-8024da34ca44}{5}" paraid="1105466596">For example, let’s say your friend opens a startup, and you provide USD 10,000 to help it grow, and receive partial ownership in this startup on pre-defined terms and conditions in return. As you now are a shareholder, you will receive your share of the profits, and have the right to vote on decisions. If a startup does grow into an established company, more capital might be needed to allow the firm to grow. At this stage, a company can go public and sell shares on the stock market to raise more capital. <br /> </p> <p paraeid="{1199522b-70e2-4b7d-9954-8024da34ca44}{81}" paraid="2146976948">This is when a company gets listed on a stock exchange and goes through an Initial Public Offering (IPO) – the process of devising an investment plan, setting share prices, their total number and making them available to the public. </p> <h2>How many shares can a company have?</h2> <p>An individually owned business can have as little as one share representing 100% of a company’s value and belongs to the owner – that’s the minimum possible. Once a company goes public, there is no limit to the number of shares it can issue. Apple, for example, has billions of shares. However, the law of supply and demand works in this case, too, and the more shares there are available on the market, the lower they are usually priced. That’s why large corporations issue shares gradually, carefully evaluating demand to prevent a significant price drop. Apple added new shares to the market only five times in over 40 years, every time making sure that investors anticipated it.</p> <h2>Types of stocks</h2> <p>Besides private and public stocks we discussed above, the two main types of stocks are common and preferred.</p> <h3>Common stocks</h3> <p>Common stocks are the most popular type of issued stocks. In most cases, shares available to the public belong to this category. Common stocks tend to be more volatile than preferred stocks, offering higher potential reward but also higher risk to traders. The holders of common stock have voting rights and the right to receive dividend payments, although the latter is not guaranteed.</p> <h3>Preferred stocks</h3> <p>On the other hand, preferred shareholders tend to offer more predictable income, with higher and fixed dividend payouts. However, they usually always come with no voting rights and limited growth. In case a company goes bankrupt, the holders of preferred stock are also prioritised in being repaid compared to common stock owners. <br /> <br /> <img alt="TFMKT-4086-Image2-1.png" src="/getmedia/44b32dcd-b4d6-4ceb-936b-de9c739a910b/TFMKT-4086-Image2-1.png" style="display: flex; margin: 20px auto;" title="TFMKT-4086-Image2-1.png" /></p> <h2>What is a dividend?</h2> <p paraeid="{1199522b-70e2-4b7d-9954-8024da34ca44}{232}" paraid="1690159432">A dividend means a distribution of a company’s earnings or profit to shareholders as a reward for their investment. It is usually paid quarterly in cash or in the form of additional shares. However, not all companies pay dividends and some reserve the right to reinvest their profit into the company’s growth instead of sharing it with investors. For example, high-growth companies usually choose to reinvest instead of paying dividends. Even some of the giants that are profitable, like Amazon, Meta and Google (Alphabet), follow the same policy to ensure continuous growth. <br /> </p> <p paraeid="{acb2c30d-64dd-4b07-82ea-8b974d18a721}{47}" paraid="1759198674">When a company announces a dividend distribution, investors are only deemed eligible if they have bought shares before a set date, called the ex-dividend date. The average dividend payouts vary but typically fluctuate between 2% and 5% of a share price depending on the company’s industry. For example, in the energy sector, dividends average 5%, while healthcare companies often pay a little over 2%. <br /> <br /> <img alt="Group-63232.png" src="/getmedia/6c3e696d-2936-48b7-a3e7-cd0a5821df92/Group-63232.png" style="display: flex; margin: 20px auto;" title="Group-63232.png" /></p> <h2>What exchanges can a company list its stock on?</h2> <p>Most companies can be listed on any exchange in the world as long as they meet the minimum requirements set by the exchange. The main defining factor in choosing an exchange often depends on where the target audience (potential investors) are located. Hence, most companies get listed on an exchange in the same country where their headquarters are. That’s why Apple is listed in the US, Mercedes-Benz in Germany and Xiaomi in China.<br /> <br /> Some companies list their stocks on more than one exchange in pursuit of a larger exposure. For example, the two major US stock exchanges – New York Stock Exchange (NYSE) and Nasdaq – have hundreds of non-American companies listed on them.<br /> <br /> These exchanges are the largest in the world by market capitalisation, meaning they have a lot of companies listed on them, including the largest corporations. This, in turn, leads to high liquidity and market movement that presents many trading opportunities, attracting potential traders and investors.<br /> <br /> Not sure what’s the difference between stock trading and investing? Head to our next article where we explain it in detail and show <a href="/en/trading-academy/stocks/how-to-trade-stocks">how to trade stocks with CFDs</a>.</p>
What affects stock prices?
<p paraeid="{45bdec93-b9d8-4864-bd9d-c0a3f0631972}{159}" paraid="679473590">Over the long term, the stock market tends to appreciate in value. This is because as the economy grows, companies' earnings increase, which helps drive stock prices up. If you look at the chart of a popular index like the S&P500, which tracks the 500 largest US companies, you'll see that its value is higher today than it was 10, 20 or 30 years ago, even when you take into account stock market crashes, like the ones we saw in 2000, 2008, and 2020.These crashes can be hard to stomach for long-term investors as the capital gains they have generated over the years take a hit. The good news is over the long term, the stock market tends to bounce back, which means investors can recoup these losses. </p> <p paraeid="{af858a94-1cd1-433e-a49b-06c9a8d210b5}{36}" paraid="1056185374">On the other hand, <a href="/en/trading-academy/cfds/what-are-cfds">CFD traders</a><a href="/en/trading-academy/cfds/what-are-cfds"> </a>value a market crash as much as a rally because both present trading opportunities for them. In this article, we’ll explain how to identify these opportunities as we go through the main factors affecting stock prices. </p> <h2>Main factors influencing stock prices</h2> <p>All the factors that may indicate an upcoming price change of a stock can be divided into three groups: macroeconomic, microeconomic and human.</p> <h3>Macroeconomic factors</h3> <p>All the factors that may indicate an upcoming price change of a stock can be divided into three groups: macroeconomic, microeconomic and human.</p> <img alt="" src="/getmedia/5a527f95-9404-4bc3-96a5-ab43534f97ff/article-what-affects-stock-prices-macro.webp" style="width: 552px; height: 289px;" /> <p><br /> As the COVID-19 pandemic proved, the global and local state of the economy can significantly influence stock prices. This influence can be both positive and negative, depending on the nature of the crisis. For example, tech companies like Amazon or Apple were thriving while the borders were shut and people were stuck at home, while their non-tech counterparts were tanking one after another.<br /> <br /> With a crisis like that, it’s quite hard to predict where exactly it’s going to hit. Although big market crashes are an exception, not the common stock market’s nature, and hence have to be analysed individually.<br /> <br /> The day-to-day stock market performance is much easier to analyse. Over the years, traders and analysts identified price movement patterns and established macroeconomic factors that can indicate an upcoming price change. Here are some of them:</p> <p><strong>Inflation and interest rates</strong></p> <p>These two factors are usually linked together as they are correlated. Increasing inflation usually leads to increasing interest rates and vice versa. In a nutshell, the lower these rates are compared to their previous data, the better it is for stocks as it becomes cheaper for consumers and businesses to access credit. Traders usually keep an eye on the <a href="/en/economic-calendar">economic calendar</a> to follow these announcements and place their trades accordingly. <br /> </p> <p><strong>Gross domestic product (GDP)</strong></p> <p>A growing GDP rate usually signals a strong economy and is reflected in the higher price of stocks. However, if the growth is too steep, it can indicate the opposite as, in the long term, it can lead to higher inflation, which tends to have a negative impact on the value of stocks. It is important to note that stocks tend to move just after the release of economic data as they discount the future. This means that major stock indices will move lower when the economy is at its worst as investors and traders position themselves for better times ahead.</p> <p><strong>Exchange rates</strong></p> <p><a href="/en/trading-academy/forex/what-affects-forex-exchange-rates">Foreign exchange rates</a> are usually the product of the previously mentioned factors – a country’s low inflation and GDP growth lead to the strengthening of its currency compared to foreign currencies. Thus, a strong currency as an isolated factor of analysis can also indicate a potential increase in the prices of stocks that originate in the same country.</p> <p><strong>Political events</strong></p> <p>The political climate in the form of either local events, such as presidential elections or geo-political tensions, like armed conflicts and wars, usually has a strong effect not only on stocks of participating countries but on global stock prices too. In the case of elections, it can be both positive and negative, depending on market sentiment. Wars, however, tend to bring distress and falling prices to the stock market.<br /> <br /> All the macroeconomic factors are usually very intertwined and need to be studied as an aggregate – both on the local and global levels. It is also important to keep in mind the economic, political and trading relations of a country where the stock you analyse originates with other countries, as their economies may influence each other. Moreover, it’s always good to keep an eye on the American economy as it usually has a strong global influence, with the US dollar being a globally accepted reserve currency.</p> <h3>Microeconomic factors</h3> <img alt="" src="/getmedia/597c1913-938b-4722-b9f3-8f65d07a17e7/article-what-affects-stock-prices-micro.webp" style="width: 552px; height: 279px;" /> <p><br /> In addition to global drivers, there are also factors on a smaller scale that may affect share prices, such as the company's performance.<br /> <br /> Any positive news, such as higher-than-anticipated reported earnings, new advanced product launches or efficient management restructuring, tends to drive a company's stock up.<br /> <br /> Negative events such as lower-than-expected profits, lawsuits, and any controversy or drops of confidence in company leaders can have the opposite effect and trigger price drops.<br /> <br /> One factor that stands out is the dividend announcement, which usually causes a short-lived price spike caused by dividend hunters. A consequential price drop often follows as a result of a sellout of the shares that were bought with the sole purpose of receiving dividends.<br /> <br /> Microeconomic factors are often reinforced and sometimes even triggered by market sentiment – the way traders perceive the event and the level of investor confidence, which brings us to the last group of factors affecting stock prices.</p> <h3>Human factors</h3> <img alt="" src="/getmedia/70ce09e9-5764-4a22-9ee1-01aa97b52284/article-what-affects-stock-prices-human.webp" style="width: 552px; height: 98px;" /> <p><br /> These are the factors that influence the stock market due to public activity. For example, a new product launch can positively or negatively affect a company's stock price, depending on how traders and investors feel about it. If they believe a product has potential and will gain popularity, it will attract more buyers and traders to the company stock. On the other hand, if they believe it will be a failure, they might start pulling their investments out and sell the stock, causing its price to decline.<br /> <br /> Increased demand for certain products or stocks, leading to their increasing prices, can also be caused solely by public activity. The infamous GameStop saga, for example, at one point brought a whopping 2,000% increase to the company's stock price, followed by an almost equal a large price drop and another surge in just a little over two months. The entire series of events was caused by public activity and sentiment.<br /> <br /> Factors like market sentiment are nearly impossible to predict with a fundamental analysis of a company or economy. That’s where <a href="/en/trading-academy/what-is-technical-analysis-in-trading">technical analysis</a> steps in, but it is usually considered an advanced technique. If you are just starting out your stock trading journey, it is advisable to study the basics first and practice trading on a <a href="/en/demo-account">risk-free demo account</a>. For example, ThinkMarkets’ proprietary platform <a href="/en/platform/download-thinktrader">ThinkTrader</a> offers CFD trading on over 3,000 global stocks and USD 10,000 virtual funds to test and improve your trading skills.</p> <p> </p>
