Stock Market Basics

STOCK MARKET BASICS

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Stock Market Basics

Course Description:
The Stock Market Basics course is designed to give you basic information about investing in the stock market to help you prepare for the two-day Rule 1u Workshop. This course is designed, for individuals without considerable experience investing in stock or options, and to provide all students with a base of knowledge aboutthe stock market before attending more advanced course work. In this course you will be introduced to a variety of investing concepts that will be covered in more detail in the following courses provided as part of the Rule 1u Workshop curriculum: • • • Stock Basics* Option Basics* Charting Basics*
*Course information provided as part of the Rule 1u Workshop

Course Objectives:
In this courseyou will learn about: • • • • • • Stock market exchanges Market participants The Bid-Ask spread Market terminology Types of market orders Basic charting concepts

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Stock Market Basics

Contents
Course Description................................................................................................................. 2Introduction............................................................................................................................. 4 Terminology............................................................................................................................. 5 Supply and Demand............................................................................................................... 6 Stock MarketExchanges........................................................................................................ 6 Market Makers......................................................................................................................... 8 Types of Orders....................................................................................................................... 9 StockCharts............................................................................................................................ 11 Executing Trades.................................................................................................................... 16 Option Leverage...................................................................................................................... 17Conclusion.............................................................................................................................. 19 Appendix.................................................................................................................................. 20

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Stock Market Basics

Introduction
Peter Lynch, one of the most successful investors in history, believes investing is a straightforwardprocess. He thinks that everyday people are equipped with the tools to outperform Wall Street for one simple reason: they have better access to the information you need to trade the stock market compared with any big fund manager. That information is access to the marketplace. You have this access to the marketplace. Consider your everyday activities such as work, your kids, what you ate, or anythingelse that you see or do on a consistent basis. You notice trends every day: the type of jeans or new video game your kids are clamoring for, the popular grocery store or gas station. Every decision we make as consumers affects companies. Most of the products or services we buy are made by public companies that have public stock that we can trade. Trading the stock market may be the first step to amore fulfilling life. For some, it can indeed be a new beginning. For others, it may be a way to speed up the path to retirement. Regardless of your reasons for considering a new course in life, know that getting started in the stock market may be less demanding than you might think. In reality, the stock market is simply a mechanism for entrepreneurs to obtain capital to fund their businesses. In...