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  • What Are Shares

    A company’s capital is divided into shares and sold by way of raising the financial stability of that company. So, when you buy a share, you’re showing financial support for that company on the market by buying into it. Shares are divided into two categories; equity shares and preference shares. Shareholders of the former are given the right to vote on company decisions, including acquisitions and mergers. Preference shares on the other hand, grant shareholders the right to receive dividend on the shares before equity shareholders and hold a right to return of the capital before equity shares.

    Traders are not bought directly from from either an individual or a company, but rather access to shares at the stock market is provided by a broker. Shares offer a lot of flexibility to traders, with the option to hold long or short positions for any period of time. Whilst shares are typically considered longer-term investments, the worldwide use of automatic trading systems has reduced the average holding of shares to no more than a minute. Short-term traders attempt to capitalise on minute shifts in price, focusing on a high quantity of trades rather than the high return looked for by long-term share traders.

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