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Stocks and Shares (Share Dealing)

By purchasing shares, usually through a stockbroker, you are buying a small part of a company, and its future revenue which you can receive as dividends or can be reinvested in the company. Shares are sold by companies as a way to raise capital, which is invested back into the company.

When share trading, there are a number of types of shares:

Ordinary shares(known as equities) - the main type of shares where the dividend received varies according to company performance. Ordinary share holders usually have a say in company votes.

Preference shares - shares which give a fixed dividend to the shareholder but the holder does not generally have any voting rights. In the event of bankruptcy or liquidation, preference share holders get priority over ordinary shareholder.

Convertible preference shares - preference shares that have been issued with the option to convert into ordinary shares.

The price of shares on the UK stock market fluctuates greatly depending on the performance of a company - high price when the company is performing well and demand for them is high. A lower share price for a poor performing company.

With share dealing you can buy and sell shares whenever you want. Recently online share trading has become popular, providing a quick and efficient way to trade stocks and shares.

However investing in the UK stock market or any stock market can be risky as share prices fluctuate on a daily basis.

As there is the potential with stocks and share investments of high returns, it is a case of weighing up the prospective gains against the risk of losing some or all of your investment and whether you are prepared to take that chance.

If you are not entirely confident in making stocks and shares investment decisions you should consider seeking the advice and expertise of a stockbroker.

Please use the links below for additional UK stock market and share information or for online share trading services.