CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Shares trading definition

Shares trading is the buying and selling of company stock – or derivative products based on company stock – in the hope of making a profit.

Shares represent a portion of the ownership of a public company, and make up its worth or market cap. The trading of shares is one of the most popular and best-known markets in investing, alongside forex and commodities.

There are two main ways of making money from shares trading:

Price movement. When demand outstrips supply for a company’s shares, their price will increase. Shares traders try to take advantage of these price movements.
Dividends. As they in effect part own the company they have shares in, shareholders are entitled to a part of any profits the company decides to release back to investors in the form of a dividend.

Most shares trading takes place on stock exchanges, where public companies are listed. Only registered participants are allowed to trade directly with stock exchanges, so the majority of traders will do so via a stockbroker.

It is also possible to use derivative products like CFDs to participate in the shares market. These allow for more flexibility than traditional trades, with the opportunity to take long or short positions to trade in both bull and bear markets.

These products operate on leverage, to increase exposure on a position without the use of more capital. However, this means CFDs also carry greater risks: including the risk that your losses could exceed your deposits.

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Disclaimer:

All forms of investments carry risks and trading CFDs may not be suitable for everyone. CFDs are leveraged instruments and can result in losses that exceed deposits, so please ensure that you fully understand, and are aware of, the risks and costs involved. Refer to the Risk Disclosure Statement and Risk Fact Sheet.

IG Asia Pte Ltd (Co.Reg.No. 200510021K) is regulated by the Monetary Authority of Singapore and holds a capital markets services licence for dealing in capital markets products that are over-the-counter derivatives contracts and is an exempt financial adviser.

IG provides an execution-only service. The information in this advertisement does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of or solicitation for a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. You should consider your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Shares trading definition

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