The stock market generally has a long history of producing profits for investors, but not everyone ends up a winner. Short term trading in the Nigerian stock market is what most people are advised to go for. You can make quick money from speculation quicker than you can ever imagine. It is possible to get some stock unit, let’s say for N200,000 and quickly make gain by selling it within the next few weeks or months.
However, it is possible to buy some unit for N200,000 and watch your money deplete into half within the next few weeks. So, this is a win or lose approach; but if you are well informed about the ins and outs of investing in the stock market and the Nigerian stock exchange, it is possible to avoid the risks and make quick cash.
Here are 3 things you need to know:
- Get a Stock Broker/Brokerage Company
The Brokerage firm or your stock brokers act as the intermediaries between you and the stock market. They handle the intricate parts of your transactions and get commissions for their efforts.
The Duty of Your Stock Broker is to help you open a CSCS (Central Securities Clearing System) account which in turn would make it possible for you to buy stocks as you may not be able to buy on your own.
- Open Investors Account
The moment you decide to trade in the Nigerian Stock market, you have become an investor. Therefore, you will need an investors account. An investor’s account is an account that is unique and tied to your name as an investor. It is normally opened for you along with a CSCS account with which your stocks would be moved in. It is opened for you by the stock brokerage firm or broker whom you have assigned to act on your behalf. All transactions done on your behalf would then be recorded against your name in your investor’s account.
- Secure Trading Capital
Depending on the volume you want to trade or the number of risks you want to take, you will need enough trading cash that is proportional to your trading options.
More than anything else, knowledge is your power in this business. You must be in the know, constantly updating your knowledge of the market and be in-tune with the latest trends. You must be good at spotting opportunities and possess the ability to predict trends. Placing your finances in the stock market gives you the opportunity to grow your finances over the long-term. Many well-established companies also pay dividends to investors, which increases your overall return on investment.
Stock market volatility can lead to a substantial loss of investment. If the majority of the market is experiencing loss and leaving the market because of economic factors, you may find it difficult to sell your shares to someone else. Be informed.