It's been a long time since I posted in this blog since I was busy with new projects this year and studies (about Options, Korean stock market and Derivatives). However, I have several friends who occasionally ask me about the stocks basic so I decided to continue this blog.
What is stocks?
Stocks is a piece business own by the shareholders. To understand it, let us take SMPH as an example.
SMPH or SM Prime Holdings is the company that own and operates the SM Malls in the Philippines and China. This company is divided into 13,898,943,067 outstanding shares or stocks. Owning one of these stocks will make you a part owner of those malls...so does it mean I can go to any SM mall and do a shopping spree for free? Or can I demand from the sales lady to prioritize my purchases during the midnight sale since I'm a part owner of SMPH? Dream on...
So what if I own a stock(s)?
First, owning a stock entitles you to be a business owner but not necessarily the controlling owner (Management) unless you own majority of the stocks. The following are your rights as a stockholder:
1. Voting Rights
2. Dividend of Net Income
3. To Sell the Stocks you Own at Your Price
4. The Right to Avail of Stock Rights/Warrants and offerings.
The abovementioned are the basic and important rights of a stockholder.For small investors like me, I think the most important is number 2 and specially number 3. I say it again..."The Privilege to Sell the Stocks you Own at Your Dictated Price". Likewise, for those who want to purchase stocks, they also have the option to buy the price at the price they want. Of course, if someone agreed to your Price, whether Buy or Sell, then we have a Matched and only then the transaction will be finalized.
What is stocks?
Stocks is a piece business own by the shareholders. To understand it, let us take SMPH as an example.
SMPH or SM Prime Holdings is the company that own and operates the SM Malls in the Philippines and China. This company is divided into 13,898,943,067 outstanding shares or stocks. Owning one of these stocks will make you a part owner of those malls...so does it mean I can go to any SM mall and do a shopping spree for free? Or can I demand from the sales lady to prioritize my purchases during the midnight sale since I'm a part owner of SMPH? Dream on...
So what if I own a stock(s)?
First, owning a stock entitles you to be a business owner but not necessarily the controlling owner (Management) unless you own majority of the stocks. The following are your rights as a stockholder:
1. Voting Rights
2. Dividend of Net Income
3. To Sell the Stocks you Own at Your Price
4. The Right to Avail of Stock Rights/Warrants and offerings.
The abovementioned are the basic and important rights of a stockholder.For small investors like me, I think the most important is number 2 and specially number 3. I say it again..."The Privilege to Sell the Stocks you Own at Your Dictated Price". Likewise, for those who want to purchase stocks, they also have the option to buy the price at the price they want. Of course, if someone agreed to your Price, whether Buy or Sell, then we have a Matched and only then the transaction will be finalized.
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