questions about stocks and shares

[otispunkmeyer]

i have some questions to ask about stocks n stuff. im playing a game on virtualstockexchange.com and well i made about $2000 though its a relative drop in the ocean considering the game starts you out with $10,000,000.

i know you have to research and read up on what companies are doing and whats happening in their day to day business. i'd guess for instance if you read up on bernard matthews (sells processed turkey meat products) you'd koow they have a bird flu outbreak so their stocks are gonna dive as the public will now have a bad perception of bernard matthews products and stop buying

so here are my Q's

1. Stop selling, Limit buying and selling, market buying and selling - what the hell do these do?

2. i think i get what a day order is, but what is a good till cancelled order?

3. i looked at others portfolios and see many of the top guys have bought massive amounts of shares seemingly worth $0.00..... how is that possible? how do you buy something worth nothing? who are these companies with a zero share price?

4. i dont understand what "volume" is. is it the amount of shares availiable from the company or what? is there a limit to the number of shares you can buy in a company? ie i tried to buy 10000 shares of ITV plc and it only gave me like 7515 (on virtualtrader.co.uk)

yet the leader on my virtualstockexchange.com game has bought 92 million shares of SPR

i know i could find the answers to this on google, and i did try. but i havent seem to find any that properly explain it, or are not written in some kind of convoluted bussiness-l33t speak.


EDIT: also WTF are dow jones, NASDAQ, FTSE 100, ?

 

[bobdelt]

Penny Stocks - There are stocks out there worth a penny, or sometimes even less. So you can buy thousands of shares for almost nothing. Typically anything under a dollar is considered a penny stock.

Volume is how many shares were traded that day.

Dow Jones is a company. but you are probably refering to the index of theirs - its a group of stocks and people use it to determine how well the market is doing, same with FTSE 100. NASDAQ is an exchange, like the nyse. This is where the trades are actually done. Nasdaq is where you'll find most of your tech stocks, typically smaller companies than the nyse.

Market buying\selling means you dont care about the price, you'll take the market rate whatever it is. Stop selling\limit buying is where you can say I'd only buy the shares for this amount, or id only sell if i can get this price. = meaningless to your game i assume since you arent actually trading.

 

[otispunkmeyer]

how many shares can a company have? do they have a set number for sale?

or is it like the value of the company / share price = number of shares or someting?

 

[LegendKiller]

Originally posted by: otispunkmeyer
how many shares can a company have? do they have a set number for sale?

or is it like the value of the company / share price = number of shares or someting?

They can issue as many shares as they like, provided people will buy them for a set amount of money. The purpose of issuing is to gain money and marketing through public ownership.

When shares are sold, cash is used to buy more assets. The equity in the company is then grown by retained net income. Net income, which is owed to investors, can either be retained or paid out through dividends. When it is retained, it essentially stays the "property" of the shareholder, increasing their stake in the company. It is also seen as an IOU, since retained income should eventually be paid (albiet it is essentially paid when you sell the stock). The "book value" of a company is also a measurement of what a company is worth.

Revenue - costs - debt costs - dividents = retained net income.


Also keep in mind that stock prices aren't always set by actual intrinsic value. It is also a measurement of not just past or present gains in the company, but also the expectation of future revenue. If a company signals that it's future revenue is now lower than what was expected, then investors readjust their expectation and the stock price lowers. The reverse is true also.

 

[drnickriviera]

http://www.investopedia.com

 

[GasX]

1. Stop selling, Limit buying and selling, market buying and selling - what the hell do these do?

A stop loss is a standing order to sell if the price drops to a certain level - prevents you from taking a bath. I limit order is typically a standing order to buy at a price lower than when you make the order. If the price takes a dip, your order gets executed (good for fluctuating stocks). You can limit sell at a higher than current price to take advantage of a price spike or to auto-sell when your price target is reached. Market buying and selling is buying and selling at the current market price.

2. i think i get what a day order is, but what is a good till cancelled order?

It is a standing order that will last until it gets executed or until you cancel it

3. i looked at others portfolios and see many of the top guys have bought massive amounts of shares seemingly worth $0.00..... how is that possible? how do you buy something worth nothing? who are these companies with a zero share price?

They are called penny stocks and can cost anywhere from $0.01 to $2

4. i dont understand what "volume" is.

volume is the total number of shares that changed hands in a day.




EDIT: also WTF are dow jones, NASDAQ, FTSE 100, ?

These are called indices. There are a representative group of stocks. If you watch the index, you can see how that type of stock is doing in general. The Dow Jones Industrial Average (DJIA) is basically a measure of how the major blue chip companies are doing as a whole. NASDAQ roughly tracks mid-cap and large cap companies.

 

[GasX]

Originally posted by: otispunkmeyer
how many shares can a company have? do they have a set number for sale?

or is it like the value of the company / share price = number of shares or someting?

When a corporation is formed, a set number of shares are issued and distrubuted among the owners. Sometimes the firm holds onto some of those shares. When a company goes public, some of those shares (or newly issued shares) are sold to the public.

Share price X # of shares outstanding = Market Capitalization.

When you hear that a firm is a $billion company, they are referring to its market cap.

 

[jakedeez]

1. Stop selling, Limit buying and selling, market buying and selling - what the hell do these do?

Stop Selling, as you are asking, means that when the price falls to a certian point the order is executed as market, meaning it will be sold on the next price tick.

Exp:

Sell Stop on ABC @ 20

ABC Ticker: 21.25...20.50...22.20...21...20.05...20...21.25...18.25...

In this cause your stock would have ben sold at 21.25, the tick after the trigger price.

Limit buy or selling, means you buy at a specific price or lower, and sell at a specific price or higher, or there is no execution.

Market orders are executed right away at whatever price the market will give you.

2. i think i get what a day order is, but what is a good till cancelled order?

Day orders are good that day, GTC are good until they are filled or canceled.

3. i looked at others portfolios and see many of the top guys have bought massive amounts of shares seemingly worth $0.00..... how is that possible? how do you buy something worth nothing? who are these companies with a zero share price?

Penny stocks, maybe off the pinks (pink sheets) or maybe even just penny options. Also they could be buying commodities/futures and not paying right now... just depends. For a stock "game" you have to just go wild and invest in super high risk, its not like real life.

4. i dont understand what "volume" is. is it the amount of shares availiable from the company or what? is there a limit to the number of shares you can buy in a company? ie i tried to buy 10000 shares of ITV plc and it only gave me like 7515 (on virtualtrader.co.uk)

Volume is the number of shares traded on a day.

EDIT: also WTF are dow jones, NASDAQ, FTSE 100, ?

Dow Jones is an index that tracks certian stocks

The NASDAQ is the National Association of Securities Dealers Automate Quotations, it is the main OTC market place. (OTC stocks are ones not listed on a major exchange like NYSE)

FTSE 100, I am not 100%, the FTSE is I think the top 100 equities on the London exchange... but eitherway its an index of 100 european stocks...

 

[iversonyin]

www.amazon.com

 

[Nerva]

Originally posted by: bobdelt
Penny Stocks - There are stocks out there worth a penny, or sometimes even less. So you can buy thousands of shares for almost nothing. Typically anything under a dollar is considered a penny stock.

Volume is how many shares were traded that day.

Dow Jones is a company. but you are probably refering to the index of theirs - its a group of stocks and people use it to determine how well the market is doing, same with FTSE 100. NASDAQ is an exchange, like the nyse. This is where the trades are actually done. Nasdaq is where you'll find most of your tech stocks, typically smaller companies than the nyse.

Market buying\selling means you dont care about the price, you'll take the market rate whatever it is. Stop selling\limit buying is where you can say I'd only buy the shares for this amount, or id only sell if i can get this price. = meaningless to your game i assume since you arent actually trading.

penny stocks suck ass. they almost never get off the pk

 

[otispunkmeyer]

cheers guys!!

iversonyin - lol but i dont get you unless you mean i should buy some books