Trade Shares And CFDs

Stocks are securities, which give their owners the right for a part of a company’s profit and assets. Over the last several decades, popularity of stocks trading has significantly increased: traders started switching from usual online investments to a more comfortable environment for trading stocks. Emily provides you with a reliable access to trading CFDs on stocks of the most essential companies from Germany, the USA, and Switzerland.

In order to make efficient investments, a trader needs to see an overall picture of what is happening on the market or what may have impact on prices. This approach becomes even more important when it comes to trading stocks: a trader not only has to monitor the current market behavior, but also keep track of the news published by the company, stocks of which they invest in, along with its development and stability. To consider all these various indicators, a trader needs to perfectly combine different tools of technical and fundamental analysis.

In the context of investing, the terms “stocks” and “shares” have a similar meaning, and are often used interchangeably, particularly in American English. The difference is that “stocks” appear to be a more general term referring to the piece of ownership in a company or several companies.

On the other hand, “shares” mean the same thing, but it is mostly used to describe ownership in a particular company.

For example:

I invest in stocks.
I invest in Apple shares.
While these terms can be used as synonyms in a standard description of financial markets, be aware that they have more distinctive meanings in some countries and languages.

Depending on their liquidity, traded volumes, spreads, and volatility, there are three types of stocks: blue chips, mid-caps, and small-cap stocks.

Stocks of the first group are very popular from the investment point of view. They are marked by tight spreads, high liquidity, low volatility, and quite big daily traded volumes. These are stocks of such famous companies as Apple, Amazon, Facebook, Netflix, etc.
Mid-caps are less interesting to investors because they have lower liquidity and smaller traded volumes. In addition to that, the spreads are wider.
When it comes to small-cap stocks, they are considered the least liquid assets, which offer very large spreads, extremely high volatility, and the smallest traded volumes.
Traders that trade stocks can be also divided into several different categories:

Passive. They prefer to trade stocks of the first type (less often – second or third); their priorities are reliability and stability.
Active. These ones strive to increase their profits along with minimizing risks, that’s why they mostly trade “blue chips”, but do not ignore mid-caps and sometimes even small-caps stocks as well.
Speculators. These are traders, who are into short-term buying/selling stocks in order to gain profits very quickly, hence they choose the most liquid stocks, “blue chips”.
The choice of stocks can be influenced by a trader’s strategy and attitude towards risks. It is well known that stocks of famous companies don’t always yield a lot of profit, but they involve the least risk. Moreover, it is not recommended to invest all funds in one asset. It would be better to diversify your investment portfolio by forming it out of stocks of different companies.