Share Trading

To all intents and purposes, share trading and equity trading mean the same thing. Both refer to a unit of ownership in a company. But there are slight technical differences to be aware of.

First, a 'share' is a single unit of ownership. 'Equity', however, is the total stake you hold in a company i.e., more than one share. You might have three shares – which is your total equity.

The second difference refers to the meaning of 'shares' and 'equities'. More often than not, you hold 'shares' in a single company. But you could use 'equities' to describe the total amount you own in two or more companies.

So, when it comes to equity trading, you're buying and selling your total stakes in a company.

For investors, shares are one of the most popular trading instruments. There are many reasons for adding shares and equities to your portfolio. One key reason why investing in shares can be so attractive is the liquidity available. The market is full of ongoing supply and demand – so it's always possible to find new and exciting opportunities.

There are other reasons too. For example, there's a clear and transparent correlation between a company's share price and their underlying value. The better it performs, the more likely it is for the share price to increase. Similarly, you can take advantage of volatility – especially when companies are more exposed to prevailing economic or political events.

By trading shares as CFDs using leverage with FXOpen EU, another benefit is the smaller amount of capital needed. That leverage gives you full market exposure.

Thinking about investing in shares? It's important to know the factors to look out for that can influence your positions and decisions. There are many possible internal and external factors to consider. Some are common to all companies, while others can be more unique in nature.

• Share supply and demand: If shares in a company are at a premium, high demand can outweigh supply – driving up the share price in the process.
• Company news or updates: Annual reports, profit warnings, or new products come with the potential to drive a company's share price up or down.
• Broader economic factors: Both on a national and an international level, economic announcements and policies can significantly impact share prices.
• Market and industry trends: It's perhaps more a long-term consideration, but any major trends within a specific market can affect a company's price. Airline stocks, for example, were negatively impacted by reduced travel during the Covid-19 pandemic.
• Investor mood/confidence: In some cases, it can all come down to the confidence that investors have in a particular company or sector. There may not be any tangible reason – so it can be so important to gain an understanding of any prevailing moods.

When you trade shares using CFDs, you pay a small commission when opening and closing your position. At FXOpen EU, our commissions start from USD$1.5 per standard lot. The rate will depend on your Account Equity and Monthly Traded Volume. See our Knowledge Base for more details.

Taking a long position? There will be an additional overnight charge to consider.

For any questions or if there's something you aren't sure about, FXOpen EU is here to help. Get in touch with our team. Our live chat service is also available 24 hours, five days a week.

Like all trading, there is always risk involved if you choose to trade shares. Using CFDs to buy shares online will fully expose you to the market – and you may lose some – or all – of your initial investment. In some cases, losses can be rapid due to leverage. So, you should never risk more than you can afford to lose.

It is also worth considering whether you fully understand how CFDs work. They are complex instruments – and the risk is significant. For more support, please take a look at our Knowledge Base.

If you're aware of all the risks involved, equity trading using CFDs can be rewarding.