Equity trading is the act of buying and selling shares of publicly listed companies on a stock exchange like Nairobi Securities Exchange. Simply, when you engage in equity trading, you are essentially buying a small piece of ownership in that company. This piece of ownership is referred to as a share or stock.
A private company goes public and performs an Initial Public Offering (IPO) to issue shares and raise capital for expansion. These shares are then listed on a stock exchange. An investor (or trader) uses a licensed broker like Fintrust Securities to place an order to buy or sell a specific number of shares of a specific company. The order is sent to the stock exchange. The trade is executed when a buyer's bid price matches a seller's ask price
An equity trader or investor can potentially earn returns in two primary ways: either Capital Gains or dividends. This is the most common goal for traders.
Equity trading is dynamic and offers significant potential for returns, but it also carries high risks due to the volatility of stock prices