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Share dealing involves the actual purchase and sale of shares. Unlike derivatives share trading, the trader pays for the underlying share and is not merely speculating on the direction it will take. Shares are issued in the form of paper certificates or electronically via the CREST system in the UK. By buying shares in a company, the shareholder then receives a percentage of ownership on that company.

Like any form of investment it is important to beware of the risks involved in share dealing. The best way to invest in shares is to be in it for the long-term. This reduces your exposure to market fluctuations, but you are at risk of loss all the time. No matter how experienced you are on the stocks and shares market, there is never a guarantee you will get more or even any of the funds you invested to begin with.

A share of stock means a share of ownership in a company. A stock can also mean one of a range of financial instruments, such as bonds and other investment types. Always make sure that you are fully aware of the risks involved. Each shareholder will be given certain rights with each share they own. However, even if you were to own half the shares of a company, it would not necessarily mean you were given rights to the actual assets of that company. You would not necessarily be allowed to access the company's building or equipment. The shareholder's rights lie more in the policies of a company and the election of boards and other performance-related areas.

Please find below a list of Share Trading Stock Brokers for you to compare. It is really important that you take the time to research the market and compare what is available. In the table below you can weigh up the pros and cons of different Brokers looking at aspects such as commission fees and the required trade and account minimum. Once you have made your decision click on ‘more’ to go to the next stage.

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What is Share Dealing?

Shares are often referred to as 'equities' or 'stocks' and are listed on a stock market. A share is a unit of ownership in the company that has provided your share. If you purchase a share you buy a percentage of a company and become a share holder. If you own shares in a company you can make a profit through dividends. This means that you receive some of the profit from the company. Dividend shares are known as 'Income Stocks'.

Traders use brokers to purchase or sell shares in a company. Companies will sell shares if they want to raise money. If you own shares in a company you will profit if you sell your share when it’s value rises and if it falls will make a loss.

What Types of Shares are there?

The two main types of shares are ordinary shares and preference shares. Ordinary Shares are often thought to be the most high risk share type. With ordinary shares the shareholder has no particular rights and if the company were to collapse, the shareholder will be the last person to get paid. However, ordinary shares can offer good returns.

Preference Shares don’t give the shareholder voting rights but can ensure that the holder receives a dividend payment before they are issued to everyone else. Unlike an ordinary share, the price of a preference share is fixed, which means that the owner of these shares will not make a profit if share price increases.

What are the Methods of Buying and Selling Shares?

Stockbrokers are the most common avenue through which to buy and sell shares or stocks. Most stockbrokers will also be listed with a stock exchange but their services may vary. Some stock brokers will offer advice and assistance, for which they will charge fees. However, others referred to as 'discount brokers' will offer minimal advice, but will be cheaper to trade with. All stock brokers will charge a fee for each trade, this is the 'transaction fee'.

How Are Stock Brokers Regulated?

Stock brokers must pass the Securities and Investment Institute Certificate in Securities. This is a two-part exam. There are various units to the exam and one of these includes proof of having attained FSA Approved Person Status. Stock brokers should be readily willing to provide details of their qualifications and approved status.

Share prices will rise and fall dependent on the performance of the company and on market forces and fluctuations. The value of shares is affected by the principle of supply and demand. The price of the stock is related directly to the level of demand. There are other factors which affect the price of stock and these are analysed in order to be able to forecast price direction and pattern.

Shareholders and prospective share dealers can keep an eye on the markets via looking at indices – in the UK this is the FTSE with its various forms (FTSE 100, FTSE 250, FTSE Small Cap and so on).

What are the Risks?

While the returns on shares can be very profitable, it is important to understand the risks. As mentioned above, the best way to invest in shares is to be in it for the long-term. This reduces your exposure to market fluctuations, but you are at risk of loss all the time. No matter how experienced you are on the stocks and shares market, there is never a guarantee you will get more or even any of the funds you invested to begin with. Make sure the broker you use explains the risks to you from the outset. If they are a good service, they may provide support in managing risks.


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