The term equity trading refers to the buying and selling of company shares, stock indices and sector CFDs. Here, shares of big public companies are bought and sold through the major stock exchanges like London Stock Exchange, New York Stock Exchange, and Tokyo Stock Exchange. These exchanges serve as managed auctions for stock trades. But, stock indices in small companies are bought and sold in OTC (over-the-counter) markets.
Deals can be performed by the owner of the stocks, or by an agent. There are two types of trading – Proprietary trading (also called principal trading) and Agency trading. First one is buying and selling for the trader’s own profit or loss. Here, the principal is the owner of the shares. In the case of agency trading, an agent (usually a stock broker) buys and sells stocks, on behalf of a client. Stock brokers are paid a commission for performing the trade.
View Trading Example click here
This information provided by Orient Financial Brokers (OFB), licensed and regulated by Central Bank of the UAE , to conduct brokerage in Foreign Exchange, Commodities and Money Markets.