A company issues shares of its company stock as a means to earn more capital. This is a normal activity of most large-scale companies. Share trading is the trade or exchange of these stock shares. This share trading is done between brokerage firms or individuals. The shares of a company are only considered to be valid if they are registered with the National Association of Securities Dealers Automated Quotation System or what is more popularly known as NASDAQ and also the New York Stock Exchange or NYSE.

Regulated share trading was first done in 1698 during the creation of the London Stock Exchange. The London Stock Exchange was founded by John Custaing in a not so glamorous setting or more particularly in a coffee shop. It began with only a small number of commodities and stocks. Since then, quite a number of stock exchanges have been created all over the world.

The main purpose of shares trading for a company is to improve the value of their security. The value of the shares of a company is affected by many factors such as global happenings like a war, flood, death of a politician, natural disasters and so on. If anything majorly bad happens anywhere in the world, share trading also gets affected. Share trading is also affected when the value of the share is affected by company reports. Negative company reports affect share trading negatively while positive company reports affect shares trading positively as well.

The main goal of share trading for an individual is to earn a profit. The trick in share trading is to buy the share at a low price and then selling it at a higher price. This is why it is important to be constantly updated on the movements of the constantly changing stock exchange when you engage in share trading. You have to know when the value of your share has risen so that you can sell it at a higher value from when you bought it.

Share trading affects the market positively as well because it creates liquidity in the market. Liquidity is the ability for conversion from security to cash. Shares trading also determine the value of a company. The higher the value of the shares of a company in share trading, the more valuable that company is. It also increases their chances of getting more financing for their company. It can be said that the value of the shares of a company is partly responsible for its success.

Jaron Jack is a freelancer writer who writes different trading and investment articles including Forex Trading and CFD Trading.CFDs are a financial instrument that give you leveraged trading power and flexibility.

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