An equity stock is a share of the capital of a listed company that is traded on major stock exchanges. This share of capital, known as equity stock may provide its owner with several rights. The right to benefit from the capital appreciation of the company shares, the right to vote during general assemblies of the company and the right to receive dividends provided the company distributes any. Trading equity stocks involves the buying and selling of shares of an exchange listed company in order to speculate on the appreciation or the depreciation in the price of the mentioned shares. This listed part of the capital of the company is known as the secondary market, as opposed to the primary market that is often held privately by the founders of the company and financial institutions.
How to buy equity stocks in the secondary market?
You can easily buy and sell shares on the secondary market. You would only need an equity account and some capital to invest. Equity is one of the most popular asset classes among retail traders (after the forex market). You now understand the difference between equity stocks (or company shares), which form an asset class, and binary options that are financial instruments that enable you to speculate on any asset class (equity, forex, commodities, indices…).
Explaining equity stocks prices variations
As you may already know, equity stock prices are impacted by a large number of different factors. These factors can be of fundamental or technical natures. The fundamental factors include the financial results of the company, the dividend announcements, corporate actions impacting the shares, financial ratios… The technical factors have to be decrypted using charts, these technical indicators will help you identify entry points and take-profit levels (also know as technical supports and resistances) for your trading strategies.
Trading equity stocks using binary options
Trading equity stocks using binary options is different from trading stocks. It involves the implementation of short-term trading strategies using the leverage of binary options in order to benefit from small moves in the underlying share price. You can make money with binary options whatever the level volatility of the market. This is the biggest advantage of binary options compared to equity stocks. The stocks offered for trading in the binary options market will differ from broker to broker. If you want to focus on equity binary options, you should select a binary options broker that offers the stocks you want to trade. Don’t hesitate to have a look at our detailed ranking of binary options brokers based on the number of underlying assets available to help you in this task.
When trading equity stocks using binary options, traders will basically be looking at factors that can trigger a sharp rise or drop in the price of a stock. The earning season alone can be a very profitable period for trading equity binary options once you understood how to use the information provided by financial medias and earning reports.
Don’t hesitate to have a look at our detailed review of OptionTime, AnyOption, 24Option and TopOption that all offer multiple equity underlying assets. AnyOption is the binary options broker that has the most equtiy stocks available for trading. We highly recommend that you only deposit with brokers that you find listed on our website. This will secure safe payouts and should you face any difficulties we will be able to assist you.