If you’ve ever wanted to invest in companies like Apple, Google, and Tesla, you’re in luck because Olymp Trade gives its clients access to these and a number of other leading international stocks.
Trading stocks is one of the most lucrative ways for investors to build solid portfolios and improve their financial stability in both the long and short term. By tapping into the success of proven winners like IBM, McDonald’s, and even Google, Olymp Trade clients have the ability to share in those companies’ growth.
However, if you’re new to markets and trading in general, trading in these blue chip stocks might be a bit overwhelming so let’s take a look at how the stock market works and how clients on Olymp Trade can take advantage of this access to the stock market.
What are Stocks and How are They Traded?
Maybe you already understand what stocks are, but here is a quick refresher on the basics. Stock is essentially a portion of ownership in a company. Companies issue stock for a variety of reasons such as raising capital to fund projects or expansion or simply cashing in on their success..
Some very notable current examples of companies issuing stocks are Saudi Aramco and Uber. In the case of these two companies, this is their first stock offering to the public. The industry term is an Initial Public Offering or IPO. These two IPOs have huge interest from the public and this will affect the initial price of the stock, which will then be traded immediately by interested parties.
Stockholders also known as shareholders then share in the profits of the company in direct proportion to how much of the company they own.
For instance, if company A has 100 shares of stock in circulation and you own 2 shares, then you own 2% of the company. If the company pays out $100 to its shareholders in profits, you would get $2.
Sharing in profits from the company is one way to create an income for investors. These payouts in company profits are called dividends and are done quarterly, provided the company makes a profit, and issues those profits to shareholders.
In reality, the amount of shares issued by companies can run into the billions of shares. Therefore, the amount of the payouts per share can be quite small unless an investor owns thousands of shares in a company.
Owners of company stock can sell it, transfer it, or trade it. Stock exchanges were created specifically to facilitate the exchange of stock between buyers and sellers. In doing so, the markets report the current prices that sellers are receiving for stock that they sell.
The price of 1 share of stock is therefore dependent on supply and demand. If many people want to own stock in a company (high demand) because they think it will see large profits, the price will increase.
Some company stocks are in high demand even though they aren’t profitable yet such as Tesla. In Tesla’s case, investors believe that the company will become extremely profitable and want to get stock early on the cheap.
Conversely, if a company issues too much stock or many people want to sell their stock (high supply), the price of the stock will decrease. Companies that start losing a lot of money can see their stock plummet all the way to zero.
Trading Stocks for Profit on Olymp Trade
Most investors that buy and sell stocks aren’t extremely interested in owning part of the companies or receiving dividends. Instead, they are seeking opportunities to open trading positions in a stock based on how they see that stock’s price movement in the future.
Olymp Trade offers two ways for clients to profit from stock trades and provides 13 different blue-chip (high quality/price) stocks on the Fixed Time Trading side of the platform and 5 on the Forex side. Stocks include great companies like Facebook, BMW, Microsoft, and Starbucks.
For Fixed Time Trading, Olymp Trade clients need only decide if a stock will go up or down in value in a certain period of time and create a trade for any amount of money starting from $1. If their price movement prediction is correct, they will make up to 92% of their investment in profit.
For example: You heard Apple is going to release news on their quarterly profit and most people think it will be good news. Therefore, you open an Up position on Olymp Trade before the announcement and a timeframe of 1 hour. Apple releases the news and their stock goes up over the next hour. You receive payment for your correct forecast.
Trading stocks on the Forex side is a bit different, but can be equally as profitable for both Long (Buy) and Short (Sell) positions. The main difference is that profitability is determined by how much the price changes and investors can close their positions whenever they want since there is no time restriction.
For example: Boeing gets bad news about their 737 Max passenger planes and decides to stop building them. Boeing stock drops, but you believe the company will still be profitable and the stock will return to previous levels. You place a Buy order and hold onto the position for several hours as the stock “bounces” back and then close your position for a profit.
In both cases, traders can benefit from trading stocks based on news and economic data while making trading decisions. Since these popular companies are often in the news, there are many great opportunities for investors to make profitable trades.
Utilizing the trading strategies you’ll develop at Olymp Trade and applying them to stocks is a solid way to build your trading account.
