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.

Some fact About The Nigeria Stock Market

Nigeria Stock Exchange was founded in the year 1960 as the Lagos Stock Exchange with 19 securities listed for trading. Today there are 262 securities listed on The Exchange, made up of 11 Government Stocks, 49 Industrial Loan (Debenture/Preference) Stocks and 194 Equity / Ordinary Shares of Companies.The Nigeria Stock Exchange took on its present name in 1977 as by then the Stock Market already had branches in the most important business centers of the nation. The six branches of The Nigeria Stock Exchange are :
Nigeria Stock Exchange was founded in the year 1960 as the Lagos Stock Exchange with 19 securities listed for trading. Today there are 262 securities listed on The Exchange, made up of 11 Government Stocks, 49 Industrial Loan (Debenture/Preference) Stocks and 194 Equity / Ordinary Shares of Companies.The Nigeria Stock Exchange took on its present name in 1977 as by then the Stock Market already had branches in the most important business centers of the nation. The six branches of The Nigeria Stock Exchange are :

Nigeria Stock Exchange was founded in the year 1960 as the Lagos Stock Exchange with 19 securities listed for trading. Today there are 262 securities listed on The Exchange, made up of 11 Government Stocks, 49 Industrial Loan (Debenture/Preference) Stocks and 194 Equity / Ordinary Shares of Companies.The Nigeria Stock Exchange took on its present name in 1977 as by then the Stock Market already had branches in the most important business centers of the nation. The six branches of The Nigeria Stock Exchange are :
Nigeria Stock Exchange was founded in the year 1960 as the Lagos Stock Exchange with 19 securities listed for trading. Today there are 262 securities listed on The Exchange, made up of 11 Government Stocks, 49 Industrial Loan (Debenture/Preference) Stocks and 194 Equity / Ordinary Shares of Companies.The Nigeria Stock Exchange took on its present name in 1977 as by then the Stock Market already had branches in the most important business centers of the nation. The six branches of The Nigeria Stock Exchange are :

Lagos opened in 1961;
Kaduna opened in 1978;
Port Harcourt opened in 1980;
Kano opened in 1989;
Onitsha opened in February 1990;
Ibadan opened in August 1990;
Abuja opened in October 1999;
Yola opened in April 2002.

Lagos however remained the headquarters of the Nigeria Stock Exchange.The business of trading in Nigeria stock exchange Market is conducted during the weekdays from 11 o' clock in the morning to 1 o' clock in the afternoon local time. The goods, which are kept as security while trading are, corporate bonds, shares and government bonds. The trading of shares and bonds are done by the stock brokers in large halls by shouting out loud or by making phone calls which each branch having its own trading hall. The Nigeria Stock Exchange now uses an Automated Trading System which makes trading easier, faster and safer.
The Nigeria stock exchange was started with a small capital and in the year 1997 the capital went up to a total of about $ 3 billion. Nigeria Stock Exchange has been one of the most successful businesses in Nigeria.The All-Share Index (AMI) is the stock market index of the Nigeria Stock Exchange which for its calculation uses only common stocks (ordinary shares), was developed in 1984. Its market capitalisation was 5.12trillion naira at the end of 2006 compared to 2.9trillion the previous year.Prices of new issues are determined by issuing houses/stockbrokers, while on the secondary market prices are made by stockbrokers only. The market/quote prices, along with the All-Share Index, are published daily in The Stock Exchange Daily Official List, The Nigerian Stock Exchange CAPNET (an intranet facility), The Nigerian Stock Exchange website (www.nigerianstockexchange.com), our stock update page, Newspapers and on the stock market page of the Reuters Electronic Contributor System. In order to encourage foreign investment in Nigeria, the government has abolished legislation preventing the flow of foreign capital into the country. This has allowed foreign brokers to enlist as dealers on the Nigeria Stock Exchange and investors of any nationality are free to invest. Nigerian companies are also allowed multiple and cross border listings on foreign markets.In the quest of attaining world standard in stock marketing, Nigeria stock exchange became member of the FIBV or “Federation of International Stock Exchange”. Also with the current fight for fraud and corruption, public trust in the Nigeria stock market has grown tremendously, with about three million individual investors and hundreds of institutional investors (including foreigners who own about 47% of the quoted companies) using the facilities of The Nigeria Stock Exchange. The Nigeria Stock Exchange’s 39-year history is devoid of any fraud, shocks, scandals or insider dealings.The body that governs the Nigeria Stock Exchange is the Securities and Exchange Commission (SEC).Clearing, Settlement and Delivery of transactions on The Nigeria Stock Exchange are done electronically by the Central Securities Clearing System Limited (CSCS), a subsidiary of The Nigeria Stock Exchange. The CSCS Limited (“the Clearing House”) was incorporated in 1992 as part of the effort to make the Nigeria stock market more efficient and investor-friendly. Apart from clearing, settlement and delivery, the CSCS Limited offers custodian services.Charges included in all transactions are a 3% commission on the traded value of shares and a 1% Securities and Exchange Commission fee. Withholding tax on dividend and interest remains at 10%; corporate income tax, 35%, capital gains tax, 10%.The Nigeria Stock exchange is presently headed by a Director-General in the person of Dr Mrs Ndi Okereke-onyiuke.Every business has its hurdles, so does stock marketing. We won’t promise you a gold mine, but we assure you of a mine, dig well and you will find gold. The type of gold only stock marketing can guarantee.