Stock trading is a popular activity in Singapore, with many people looking to profit from buying and selling shares. You can do so online through Saxo Bank group. However, before you start trading stocks, there are a few things you need to know.
The different stocks
The two primary stocks are common stock and preferred stock. Common stock is a basic stock and gives shareholders voting rights and the potential to earn dividends. Preferred stock is a more senior type that does not have voting rights but pays fixed dividends.
How to buy stocks
You must open a brokerage account with a licensed broker in Singapore to buy stocks. You can then place an order to buy shares through your broker.
The costs of trading stocks
A few costs are associated with trading stocks, including brokerage fees, stamp duty and taxes. You’ll need to factor these into your trading strategy to ensure that you are making a profit.
The risks of stock trading
Stock trading is hazardous, and you can lose money if you make bad investment decisions. It is vital to variegate your portfolio to reduce risk and research the companies you are considering investing in.
Stock market hours
On weekdays, the Singapore stock market is open from 9:00 am to 5:00 pm. However, you can place orders to buy or sell shares outside these hours.
Essential dates for stock traders
There are a few important dates that stock traders need to be aware of, including the financial year-end, which is 31 March, and the quarterly earnings reporting season.
Tax implications of stock trading
Profits from stock trading are considered taxable income in Singapore. You will need to declare your profits and pay taxes on them.
Stock trading resources
There are a few valuable resources for stock traders in Singapore, including online brokerages, forums and newsletters. These can help you stay up-to-date with the latest news and information.
Stock trading strategies
There are many different stock trading strategies, and it is essential to find one that suits your investment goals. Some common strategies include buying and holding, day trading and swing trading.
The benefits of stock trading
Despite the risks, stock trading has several benefits, including the potential to make a lot of money. With careful research and planning, you can minimise risks and maximise profits.
How to trade stocks
Open a brokerage account
The first step in trading stocks is to open a brokerage account with a licensed broker in Singapore, which can be done through an online broker or a brick-and-mortar broker.
Research the companies you’re interested in
Before you start buying shares, it’s essential to research the companies you’re interested in to help you recognise the risks and rewards of investing in them.
Decide how many shares to buy
Once you’ve decided which shares to buy, you need to decide how many to purchase. It’s vital not to invest too much money in one company, as this could lead to significant losses if the share price falls.
Place an order to buy the shares
After determining how many shares to buy, you must place an order with your broker online or by phone.
Monitor your investment
After you’ve bought shares, it’s essential to monitor your investment and sell the shares when they reach your target price to help you maximise your profits and minimise your losses.
Stock trading risks
Volatility
The stock market is volatile, and share prices can go up and down rapidly. You could lose money if you don’t sell your shares when the price is right.
Market Crash
A market crash is a sudden and drastic fall in share prices. It can happen due to factors such as economic recessions or political unrest. If there is a market crash, you could lose a lot of money if you don’t sell your shares quickly.
Fraud
There’s always a risk of fraud when trading stocks, which happens if you buy shares in a non-existent company or are misled about a company’s performance. It’s important to research companies thoroughly before investing in them to reduce the risk of fraud.
