Stocks represent a part of the company's capital. By buying shares of a company, you become the owner of a proportional part of it.

Stocks are traded on exchanges, where a business wishing to raise capital must register, offering investors to buy its newly issued stocks. There are nearly 250 stock exchanges in the world, the largest in terms of trading volume being the New York Stock Exchange.

Advantages of stock trading

• The shareholder receives ownership of a proportional part of the capital;
• The shareholder is entitled to a dividend - when the company is profitable for a certain period, it can distribute a part of this profit to the shareholders in the form of a cash dividend;
• The shareholder has the option to exit his investment at any time by selling the stocks;
• Shares are suitable for short-term and long-term investment;
• As a shareholder, you have no personal liability to the company's creditors if it cannot pay its debts.

How do you earn from stocks?

• If you buy the stock at a low price and sell it in the future at a higher price, you make a profit based on the difference between the two prices;
• If the company distributes the accumulated profit as a dividend, instead of reinvesting it, you receive a regular income, usually within a few percent each year;

How can you buy stocks through ELANA Trading?

With ELANA Trading, you can trade stocks from all over the world through the ELANA Global Trader platform, which gives you the opportunity to trade over 23,500 stocks on over 33 exchanges in the world.

You can trade Bulgarian stocks through the ELANA BG Trader platform.

Other ways to trade shares

Contracts for difference on shares

Contracts for Difference (CFD) is a derivative financial instrument that reflects the price movement of various types of assets. They provide the opportunity to profit when the price rises or falls, without the need to actually own the specific asset on which they are based. They can be traded on margin, which allows the investor not to pay the full value of the investment.

Stock options

Stock options are used by investors to insure their portfolios against sudden changes in the market, to be able to keep the profit made and even to profit from drastic price movements especially at the times when the quarterly corporate reports of the companies are published.

Basic concepts related to stocks

• Dividend - Income paid to shareholders by the company. Usually this is part of the profit and is done regularly once or several times a year. A cash dividend means that an equal amount of dividend is received against each share, which is transferred to the account of its owner on a certain date. A stock dividend is a payment in the form of shares, with each shareholder receiving shares from a new issue according to their proportion of shares.
• Stock Split - An increase in the number of shares. The price changes to keep the same market cap before and after the increase. There is no capital dilution - earnings per share change by the same ratio. A reverse split is a reduction in the number of shares, resulting in a nominal increase in the price per share.
• Capital Increase - Raising capital by issuing new shares.
• Rights - They are issued against held shares and entitle the shareholder to subscribe to new shares from the capital increase.
• Warrants - A security that gives the right to buy shares on a specific date and for a specific price.