Are you new to the stock market of Australia, or are you a seasonal trader who makes investments occasionally? Then you must have encountered some trading terms that left you puzzled at some point. This article will help simplify some of those terminologies so that you are confident in your next trade.
One of the best ways of demystifying the Australian stock market is to understand the basics of trading fully. The words associated with stock trading are the best starting point, which may be challenging initially. But as you progress and become familiar with them, these terms will significantly help you.
Knowing these words helps you to be a better and more successful investor and, at the same time, improves your vocabulary on trading. Here are some terms and concepts you would come across as you invest in the stock market of Australia.
- Share Market.
We have added this concept if you are new to this world. It is an exchange that permits traders to buy and sell shares. The exchange also gives licenses to companies to issue these shares. The Australia Securities Exchange or ASX is an example of a share market.
Dividends are yield returns given to investors and shareholders who bought a company’s stock. These profits are paid to you once the company has earned its profits.
Not all firms pay these yields, so do your research before investing. Along with capital gains, these are ways you can make income from your shares.
- Trading System on the stock market of Australia.
The trade systems are platforms through which the exchange works. An example would be the stocking market of Australia which has two systems for ASX: the ASX trade and the ASX Trade24. These platforms serve as a medium for stocks and other collectibles to be bought and sold.
It refers to the difference in the total aggregate for a group of assets, securities or other collectibles. Indices are usually the numbers you see quoted on the TV screen while watching the trading news. For ASX, the standard evaluation index is the S&P/ASX 200. This index hints at whether you are gaining or not each trading day.
- Share Portfolio.
In the stock market of Australia, this concept refers to the collection or group of assets you own at a particular period. As a stakeholder, you can buy multiple assets from different firms. Your total assets put together are known as your share portfolio.
- Asking And Bid Price.
These terms are fundamental to traders in the stock market of Australia. The bid price is the amount of money you are willing to pay for a particular share or asset. While the asking price refers to the definite, you are willing to give out a share.
- Annual Report.
An annual report is the yearly statement prepared by firms for their shareholders. It contains data and facts about the company’s financial position for the year. Based on the annual report, you get to decide if you want to continue with them as regards the stock market of Australia.
These concepts will help you understand the stock market of Australia. It’s normal not to grasp all the terms used in the trading world, but as you progress, everything will become easier. We hope we’re able to guide you. We wish you the best.