Home » Courses » Stocks Courses » Stock Markets 101

Stock Markets 101

Ready to take your first plunge into the stock market? Start here and understand the basics. This guide will cover terminology, information on what a stock and stock market actually is, investment psychology and how you can make your first investment.

Course Overview

Introduction: The Basics

Understanding Stock Market volatility

Volatility is synonymous with the financial markets that have made and broken many investment careers. A double-edged sword, volatility, makes it possible for investors to squeeze in profits over short periods in the financial markets. Conversely, a slight mistake in times of high volatility has proven to be costly. What is Market Volatility? Simply put, vol...

Why prices rise and fall in the stock market

Prices of stocks, among other securities, move up and down whenever the market is opened. This happens for a number of reasons, the price swings experienced are usually as a result of fluctuations in forces of supply and demand in the overall market. If more people want to buy given security, then its price will often edge higher. Conversely, whenever the ma...

The basics of an IPO

Businesses and companies have various options at their disposal that they can use to raise capital. Initial Public offerings and Follow on Public Offerings are some of the options that entities use to meet their monetary needs. IPOs and FPOs differ a great deal in the way they are carried out as well as the pricing, even though both of them serve the same pu...

What Are Capital Markets

The capital market is a general term used to denote two main types of markets featuring an array of products. A Capital market is essentially a financial system made up of primary and secondary markets, comprising of bonds, shares, among other investments that people trade all over the world. Primary Market A primary market is a segment of the capital market...

How to Choose a Stockbroker

The stock market might be the playground for investors, but it involves many entities and can become complex very quickly. In addition to stock exchanges, stockbrokers play a significant role. Traders depend on all these entities to make their investing life both possible and bearable. Read on to understand what exactly a brokerage company is and what it doe...

How can I start trading on the stock market?

The stock market has been doing well since the 2007/08 crash. Perhaps you belong to the cohort of newbie investors dying to partake in the bull run before it busts, given the growing loudness of the end-is-near theme. Read on as we take you through the process of starting a stock trading career. Understanding that knowledge is key Like any new adventure, it&...

Understanding stocks and the stock market

The investment tools available for people to retire earlier are more abundant today than ever before. One of the most popular ways people do this is through investing in stocks. The first guide from Invezz answers the most basic questions around stocks and the stock market. Understanding stocks – what is a stock? This is not a simple one to understand...

How do people make money on the Stock Market?

It is great that you are interested in the stock market. Obviously, everyone would like to strike it rich once they start committing money to their trading accounts. Before we delve into how to make money on stocks, it’s better to first explain why people are stock trading in the first place, as this will help set your goals. Reasons people trade share...

Investment Psychology

Understand what type of investor you are

Understanding what type of investor you are is crucial to working out the type of investment will help you reach your goals. Outside forces, including inflation, market fluctuation as well as the economic environment, also dictate investment styles, to a great extent. There are three types of investors: Passive/ low maintenance investor Active Investor...

Psychological mistakes to avoid

Many people venture into the world of investments, but few ever get the chance to accrue the profits they dreamed of. Why is it that many investors fail? Surprisingly, it’s not lack of industry or technical knowledge, the most common reason is due to the investor letting their mind get the better of them and falling into a psychological trap. We’...

Types of Investments

Options contracts

What is an options contract? Options Contracts are financial derivatives that act as agreements between two parties, designed to facilitate transactions of underlying assets. Often an agreement between a buyer and seller, options contract gives purchasers a right to buy or sell agreed assets at a preset price often referred to as strike price. The two main t...

Futures contracts

What is a futures contract? A futures contract is a binding agreement between two parties, where they both agree to buy and sell an underlying security at a predetermined price at a specified date in future. The buyer, in this case, signs an agreement and takes the obligation of buying an underlying asset once the futures contract expires. The seller, on the...

Contract For Difference (CFDs)

Trading stocks as a Contract For Difference is a popular way of gaining exposure to the broader stock market. However, it differs from the traditional way of buying stocks. Contract for Difference is financial derivatives that allow investors to speculate on prices of underlying assets. With CFD’s, you can speculate on prices of stocks, commodities as...

Buying the physical stock

Gone are the days when buying physical stock was a complicated affair and the domain of few people who hold connections in the financial markets. While in the past, people had to hold face-to-face meetings to buy stocks and attain certificates, nowadays, everything is done without having to leave the comfort of your home. There are many ways of buying physic...

Stocks & The Stock Market

Understanding market and limit orders

It is common for traders to utilise the ‘buy’ and ‘sell’ buttons provided by the trading software to open or close trades. However, the technique is inefficient in a highly volatile market as it results in slippage. As such, traders need to understand how to make use of trade orders to avoid unnecessary losses. This article discusses...

Understanding bid and offer prices

The stock market operates more or less like an auction scheme. Buyers forward bids for a certain number of shares at a certain unit price while sellers offer a certain number of shares at a certain unit price. These are known as ‘bid price’ and ‘ask price’. This article explains the two concepts in a bit more detail. Bid price In an a...

What Is A Stock Index?

The breadth of the stock market implies that there is too much information for investors to handle. Luckily, some alternatives offer traders an easier way of alienating trends within the market. One of the alternative ways of looking at the stock market is through a stock index. Stock indexes explained A stock index measures and reports changes in the value...

Understanding investment securities

The securities market is one of the largest and liquid of all financial markets in the world. This market offers an alternative through which companies can raise capital for their operations. Nevertheless, few people understand securities, which underlie the securities market. This article explains securities and the types that are available in the market. U...

Understanding stop loss orders

Stock trading is a lucrative venture when trades move in a direction that you expect to be profitable. Although what happens when a stock’s price moves further and further away from your position? Well, you could lose any profits made and the capital you have invested too. As such, there is a need for what is known as a ‘stop loss order’ to...

Financial intermediaries in stock investing

Stock trading is an excellent avenue for investors to grow their income. The investors can buy and sell stock and capitalize on high performance by companies. In the process of stock trading, investors encounter many middle parties, including stockbrokers, investment banks, and dealers. This article discusses the role and significance of these intermediaries...

The different stock exchanges and stock indices

A stock exchange is a subset of the stock market where buyers and sellers meet to buy and sell shares of companies. A stock exchange acts as a marketplace whereby buyers connect to be able to transact stocks. A stock exchange’s main role is to provide liquidity, thus allowing buyers to buy stocks at their preferred market price. The exchange also makes...

Brokers

The risk of a stockbroker closing

Brokers make up a crucial part of the securities market. The firms give access to millions of investors to the massive profit potential of securities. However, what happens when your broker goes bust? This guide helps to explain more about the likelihood of that happening, and what to do if it does. Can stockbrokers go out of business? Before you joined the...

Trade execution options available to brokers

The stock market brings together traders who buy and sell shares. Brokers facilitate the trade by linking up the two sides of the market and by executing orders. However, what are trade executions, and what options do brokers have when executing trades? This guide provides the answers. Trade execution explained As part of trading activity, investors offer to...

Overview of stockbrokers

The stock market brings together traders interested in buying and selling shares. Brokers play the key (and profitable) role of match the demand side traders with the supply side traders. This guide discusses the role of the stockbrokers and explains why they are significant for the stock market to function. What are stockbrokers? Stockbrokers provide a rang...

Deciding Your Strategy

Technical analysis vs. Fundamental analysis

Technical and Fundamental analysis are research techniques undertaken by traders and investors while looking for opportunities in the capital markets. While both of them are geared towards forecasting market trends, they differ a great deal. Deciding which you want to follow will greatly impact how you develop as a trader. Fundamental analysis Fundamental an...

About the author

Avatar
Harry Atkins
Harry joined us in 2019 to lead our Editorial Team. Drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience in the finance sector encompasses work for high street and investment banks, insurance companies and trading platforms.

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.