How To Trade The Nigeria Stock Market

How To Trade The Nigeria Stock Market
Business Finances Uncategorized  How To Trade The Nigeria Stock Market

Trading in the Nigerian stock Exchange is a rewarding and exhilarating experience, like any Stock market in the world. The idea of trading in stock has become a general accepted way of making money. 

 

What is Stock?

Shares are small pieces of a company. Shares can be bought by humans, companies, and mutual funds. When buying shares in a company, the buyer owns a small part of that company. The price of a share can be based on many different things. The main thing that affects the price is the balance between supply and demand. If many buyers want to buy a stock the price goes up. If there are more sellers than buyers, the price goes down.

 




Who are Stockbrokers? 
A stockbroker is a person who buys or sell stocks for their customers. A stockbroker can also help customers make choices in stocks. Their advice is based on public information about the companies. 
 

How To Trade In The Nigeria Stock Exchange 

There are three major things you will need to start trading. There are as follows –
 1. Get a Stock Broker/Brokerage Company 
 The Brokerage firm or your stock brokers acts as the intermediaries between you and the stock market. They handles the intricate parts of your transactions and get commissions for their efforts.

The Duty of Your Stock Broker: Your Brokers will help you open a CSCS (Central Securities Clearing System) account which in turn would make it possible for you to buy stocks, you may not be able to buy stocks on your own; you have to go through your stock brokering firm.

If you are buying from the primary market, that is the one that the company advertises directly, in filling the forms, you must state the name of your stock broking firm and your CSCS account number. So, you must have a stock broker even if you are buying from the primary market.

For the secondary market, you must inform your stock broker, who will then go to the stock exchange and buy your desired stock on your behalf on a regular basis. 

 
2.Open Investor’s Account

The moment you decides to trade in the Nigerian Stock Exchange, you are becoming an investor. Therefore, you will need investor’s 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.
Each time your broker wants to buy stock on your behalf, he buys it into your investor’s account. The account is for both equity and bonds.

 3. Secure Trading Capital 
You and I know what that is. There is no technicality involved in explaining that. Depending on the volume you want to trade or what I will call the amount 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.

“Buy the rumours and sell the news”. That’s a very popular saying among investors. It means – Do not trade on sentiment.

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