Phase 1: Foundations of Stock Market Trading
Lesson 1: Understanding the Stock Market
What is the Stock Market?
The stock market is a marketplace where investors buy and sell shares of publicly traded companies. It consists of major exchanges like:
New York Stock Exchange (NYSE)
Nasdaq
Toronto Stock Exchange (TSX)
London Stock Exchange (LSE)
Key Participants
Retail Traders – Individual investors like you.
Institutional Investors – Hedge funds, banks, pension funds.
Market Makers – Entities that provide liquidity.
Regulatory Bodies – SEC (U.S.), IIROC (Canada), FCA (U.K.), etc.
Stock Market vs. Other Markets
Stock Market: Ownership in companies.
Forex Market: Currency trading.
Commodities Market: Trading raw materials (gold, oil).
Derivatives Market: Options, futures.
Why Do Companies List on the Stock Market?
Companies go public to raise capital via an Initial Public Offering (IPO). Investors buy shares, hoping for price appreciation or dividends.
Lesson 2: How Stocks Work
Stock Types
Common Stocks – Voting rights + dividends.
Preferred Stocks – Fixed dividends, no voting rights.
Stock Prices & Valuation
Market Capitalization = Stock Price × Number of Shares
Earnings Per Share (EPS)
Price-to-Earnings Ratio (P/E Ratio)
Factors Affecting Stock Prices
Company Performance – Earnings, revenue growth.
Economic Indicators – Interest rates, inflation.
Market Sentiment – Fear & greed, news events.
