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HomeMarket guidesWhat is share trading
What is stock trading and how does it work?
Learn all about trading stocks, including the most-watched companies, potential trading strategies, and how to trade shares online via CFDs.
What is stock trading?
Stock trading – also known as shares trading – is the buying and selling of company shares with the aim of capturing gains from price movements. While we use the two terms interchangeably in this guide – ‘shares’ is the official name we use on our trading platform for the asset class.
Traders might buy or sell shares directly through a broker or share dealing account, or alternatively, via derivatives such as contracts for difference (CFDs). With CFDs, traders can take positions on both rising and falling markets without owning the underlying shares.
For example, if you believe the share price of Tesco plc will rise from 280p to 290p, you could open a ‘buy’ CFD position to profit if the price increases. Conversely, if the share price falls, you'd make a loss.
