FORMS OF STOCK
Penny stock: These are very cheap stocks that are listed on the stock exchange and are selling less than ten naira (N10). They carry a very high risk and also have the potentials to make you a millionaire within a short period of time when compared to other stocks, but care should be taken when buying these stocks because some penny stock can be stagnant or dormant for a very long time.
Blue-Chip Stocks: These are less risky stocks; they consist of old companies that have been in the game for a very long time and usually selling at a higher price. Return on investment such as bonuses and dividends are also constant and higher than that of penny stock.
Growth Stocks: These are stocks of companies in their growing stages, most times they don’t pay dividends to their shareholders, and rather they plough it back in the company for expansion. Though there is a possibility of high appreciation and instability in their shares prices.
Speculative Stocks: The degrees or quantity of risk of a stock determines its returns. The speculative stocks are high risk stocks; one can make a lot of returns and on the other hand lose a lot also.

BENEFITS OF INVESTING IN STOCKS
Ddends:ivi As a part owner of a company, you are entitled to dividends.
Dividend is a cash reward made by a company to its owners out of the profits made at the end of the financial year. It is normally declared at the annual general meeting (AGM) of shareholders. The amount of dividends you receive depends on the units of shares you hold, the higher the units the higher the dividend.
Bonus issues: This is similar to dividend but it does not involve cash payment, if a company gives shares it means that every shareholder is entitled to additional free shares. Let’s take for instance if open paradise plc gives a bonus of one for one, it implies that for every unit of shares you have, you get additional one free, if you have 500 units of shares in the company open paradise plc and a bonus of one for one is declared, you get additional free 500 units of shares bringing your total units of shares in the company would now be 1,000 units.
Right issues: This is a little but different from bonus issues. When a company does right issue, you as an existing shareholder will be required to pay for the share allotted to you based on the units of share you have. However, you have options of taking up the right issue, paying for them or you can sell the rights to another person with some gains; otherwise you will lose the rights.
Capital appreciation: Shares of quoted company are being traded every day on the Nigeria stock exchange, and as a result of this daily trading, the prices of shares move upward or downward due to forces of demand and supply.

Introduction to Stock Trading:

What are shares/stocks?
Shares are units of ownership of a company, which entitles the holder to some right and benefits. Investing in shares of a company quoted in the Nigeria stock exchange, involves buying the shares of this company to obtain beneficial ownership. When you buy shares/stock you become a part owner of that company, as easy as that.

Stock and shares:
When dealing with stock and shares different approach and manner is cultivated and used because it all depends on your investment goals, let say for instance here in Nigeria someone with the intention of buying a particular stock/shares and to sell with in three months would not buy a public offer, (primary market) practically because it would take you six to eight months to get your certificate and then registering the certificate could also take you another three to six months, so it would be advisable rather to buy on the floor of the exchange (secondary market) through a stock broking firm.
When you are buying from the primary market through an IPO (initial public offer) there is quite some benefit or advantage because you are buying at a lesser price and with no commision, whereas in the secondary market where the money really is (yes I would give more light latter on this because you are here to learn trading strategies) you have to pay some commission to your broking firm and also to the exchange commission.

Types of shares:
Ordinary Shares: Ordinary shares are owned by the part owners of the company, which they acquired through IPO. The degree of risk is very high in this case. Ordinary shareholders also have right to make decisions in the company but base on the quantity of shares owned by each ordinary shareholder. One units of share is equal to one voting right and should the company go bankrupt or liquidates, the ordinary shareholder would be the least to be paid.
Preference Shares: These are also the owners of the company, but they don’t have equal voting right with the ordinary shareholders. In this case they are guaranteed fixed dividends making them risk aversive and in the event of liquidation they get paid before the ordinary shareholders.
Bonds: Bonds are fixed income debts instrument which unlike equities (shares/stock) gives the investor the ownership right in the issuing company. Issues of bond could be federal government, states local government or corporate bodies. Though the federal government bonds are said to be the most active among these other bonds. The edge bonds have over shares/stock is that it has a steady growth and also the interest and principal are guaranteed.
Mutual funds: Mutual fund is a pool of resources by different investors to be managed by a very competent fund manager, who then invest such funds into money and capital market investments. These group of investors has been tagged lazy investors due to the fact that mutual fund saves the investors the stress of buying and selling stocks on their own and also the difficulties involved in analyzing and selecting of good stocks as the fund managers spread its investment into different equities such as treasury bills, government and corporate bonds, blue chip stocks and other forms of investment etc. It is very suitable advisable for risk aversive investors.