The Stock Market Game : Getting to Know the Basics And Avoiding the Mistakes that Led to...
Somebody owns a share of the corporation . That is, they own a small percentage of a company; usually, less than ten percent.
What's most basic type of stock that the average citizen may own?
They have the right to vote on executive functions of the corporation, if they're voted onto the board of electors.
"A financial market of a group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market
, but can be applied to anything that is traded, such as bonds, currencies and commodities."
Example:During the Great Depression, the Bull Market was cyclical, and the Bear market was secular.
The Bull Vs. Bear Market
Check out this link to better understand the bull market.
http://www.investopedia.com/video/play/what-are-bull-and-bear-markets/#axzz2BxdfmIg6
If someone is bearish, they value financial stability. They will typically hold onto their natural resources[E.G. food,water,environmental goods] and stand clear of new or advanced technology. They believe that saving money is safe.
Stock Options- Characteristics of the Bear and the Bull
Stock Option: When it comes to corporation ownership, there are always two parties: a buyer and a seller. The buyer has the right to pay a discounted price(the premium) for ownership of the company or share.
Call:The owner(of the premium) has the right to buy the stock at a fixed price at a set point in time, for the premium.
Put:The owner(of the stock) has obligation to sell the stock to the owner of that premium, at the agreed upon fixed price(premium) at the agreed upon point in time.
Margin agreement: The Federal reserve sets this loaners interest fee, and the buyer of the stock must pay this(currently set at 5%) interest monthly.
WHY DOES THIS RELATE TO THE GREAT DEPRESSION AND BEARISH OR BULLISH MARKETS?
Bullish Characteristics: *Bearish Characteristics are the EXACT OPPOSITE *
- Buy a Call- That is, they will buy the option on the stock(that they already paid the premium for), when they think that the stock is going to go up.
- Sell a Put- That is, they will sell a stock that they don't own(on credit) hoping that it will go down.