1. Investments: Chapter 11 Section 3
The Stock Market
Investments: Chapter 11 Section 3

2. Buying Stock Shares – a portion of a stock Benefits of Buying Stock
Dividends – portion of company profit (quarterly)
Capital Gains – sell for more than purchased
Capital loss

3. Buying Stock Types of Stock Stock Splits Income Stock Growth Stock or
Common Stock
Preferred Stock
Stock Splits
Splitting single shares of a stock into multiple shares for lower prices

4. Buying Stock Risks of Buying Stock Company may lose money
Dividend is smaller, stock price drops
If Company goes bankrupt, shareholders are paid last

5. How Stocks Are Traded
Stockbroker – person who links buyers and sellers of stock
Brokerage Firm – a business that specializes in trading stocks
Stock Exchange
The market for buying and selling stock
NYSE, Nasdaq

6. How Stocks Are Traded Futures and Options Day Trade??????
Futures – contracts to buy or sell commodities at a particular date in the future at a price specified today
Options – contracts that give investors the right to buy or sell stock and other financial assets at a particular price until a specified future date
Call/Put Option – contract to buy/sell stock at a particular price until a future date
Day Trade??????

7. Measuring Stock Performance
Bull and Bear Markets
Bull Market – a steady rise in the stock market over a period of time
Bear Market – a steady drop or stagnation in the stock market over a period of time
Dow Jones Industrial Average
30 large companies in various industries
Meant to represent the whole market
S&P 500
500 stocks to measure performance