Stock trading is attractive to many people because it sounds like easy money. There is no such a thing as a free lunch unfortunately. This section outlines the stock trading basics. Different subjects will be discussed, like the history of stock trading, swing trading, online stock trading and penny stocks.

Stock trading is nothing more than buying or selling a part or a share of a company. This share makes you a co-owner of the company and it gives you the right to get a part of the profits. These profits are pay-out by means of dividends. When a company goes bankrupt, you lose the value of your shares but nothing more. A company decides to sell shares of its ownership to raise new capital.

At the moment you decide to buy a stock, there is someone else who is offering his stock for sale. All this supply and demand is brought together by a stock exchange. The sum of the volume of all worldwide stock exchanges is estimated at $36.6 trillion (October 2008).

History of stock trading

Stock trading goes back centuries. It is said that trading securities was initiated in Belgium and the Netherlands in the 13^th century. The Dutch started with companies where many investors were invited to invest in. The first share was issued at the Amsterdam stock exchange in 1602. Continuous trading, short selling and option trading also started in Amsterdam.

The largest markets at the moment are in the United States, the UK and Japan. It speaks for itself that current trading is lightning fast because of modern technology.The average trader is able to profit from fast executions with online trading or electronic trading (e-trade). Other subjects as swing trading and penny stock trading are discussed as well.