There are both small and large investors in the securities market. The securities market allows individual investors to own part of corporations. On the same note, the securities market provides different career opportunities for traders. To ensure that members of the public do not lose their money through fraudulent activities, the government regulates the operations of the stock market. The government, through its securities regulation body, has put some regulations to protect investors. Time and again, the government fines companies that do not follow the laid out stock exchange regulations.
Overview of Day Trading
In a nutshell, day trading refers to buying and selling of securities on the same day. Any stock market investor is allowed to buy shares with the purpose of selling them in future. However, day trading has some different rules from normal trading. The rules have been put to ensure novice investors do not lose money for not understanding the market conditions. The rules are also put to prevent investors from using the stock exchange as a gambling platform.
Any investor that would like to participate in day trading is required to have a margin account. This account is offered by licensed stock brokerage firms. Brokerage firms can offer investors with the accounts loan to trade in the stock market. Investors who would like to participate in day trading are required to have a minimum of $25,000 in their margin accounts. The amount can be held both in form of securities and cash. Failure to maintain the minimum balance will make the account to be suspended. The suspensions are usually lifted after 90 days or when funds are added to the account to the minimum amount required.
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Listing in the Securities Market
The main reason for having a securities market is to enable the public own part of a corporation. Companies usually go public to raise funds for expansion or other projects they may have. However, for a company to be listed, there are a number of regulations it must follow. More example, investors have a right to know how a company operates. Investors also have a right to know who are the board members of a company, the investments that the company has made, and other information.
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Stock Brokers’ Registration
To be able to purchase securities of the companies they are interested in, investors have to work with brokers. There are strict trading regulations that brokers have to adhere to when they are licensed to operate by the authorities. To ensure investors are not taken advantage of, the government has put some regulations in the stock market. Moreover, the government ensures that brokers do operate according to the laid out regulations. Before choosing a broker to help you in trading stocks, read their reviews to know what to expect.
The above are the basics of the financial markets.