Previously I wrote about some of the Basic Facts About Stocks that you should know. Here are some definitions around the subject of Shares that you should learn about.
There are different types of shares that the new investor should know about, as follows:
Authorized Shares: The number of shares that were authorized when the company came into existence. All these shares are not open to the public.
Unissued Shares: They are shares that are retained by the company in its treasury for future use and are unissued to either the company’s employees or to the public.
Restricted Shares: These are company stock shares that are kept for its employees’ incentive and reimbursement policies.
Float Shares: The number of shares that are can be traded in the open market and which can be bought by individuals are called float shares.
Outstanding Shares: They comprise the total of the restricted shares and the float shares issued by the company.
There is a limited liability on the share of the stock purchased. If the stock loses value, the worst thing that can happen to the stock holder is that he will lose his money invested on that particular stock and any dividends that were forthcoming on it.
It is necessary to plan how to trade stocks with help of market indices and trends of the stock market. Investing in the market will help if the beginner understands technical analysis of the stock market.
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