How to sell shares?

What are shares?

Shares are the units of stocks that companies offer the trader or investors to buy or sell in the market. The companies offer stocks in the market which are then traded for a share value. Traders buy or sell the shares to earn good returns from the investments. But why do the companies sell their stocks?

The companies or firms sell the stocks in order to enhance their market trade. It may be for various reasons; they either want to expand the business, pay debts or generate more products and services. Anything could be the reason for stock trading.

The stocks, when purchased by a trader, provide them with ownership of the company as per the shares held. Traders can vote, attend meetings, and are called the shareholders of the company. In addition, most of the companies offer dividends on the shares.

Dividends are the revenue that is generated in the trade, and the company offers the dividend to the shareholders.

Share indicates the ownership and the unit that a trader owns in the company. When the company benefits or has increased value, then traders enjoy a reasonable price from the shares. Similarly, in case the opposite happens, traders may face loss.

The shares could be a full value or could be traded in fractions depending on the fund availability and risk tolerance level of the traders.

Types of Shares

The shares that traders can invest in and sell are of two types mainly, equity shares and preference shares. These two shares are mostly invested by the traders to generate funds from the stock market.

Equity Shares

The ordinary or common shares are termed as equity shares in the stock market. It carries the bulk of shares offered by the companies to trade. The shares are the most active and transferable shares. The holders of equity shares can attend the meetings, vote, and receive dividends on the shares.

However, the risk in equity shares is also high with no fixed rate of dividend. The equity shares are further classified on the basis of share capital, definition, and returns. Traders can buy the equity shares but must be alert about the market uncertainty and the other aspects of the market that affect the trade.

Preference shares

The preference shares are next to the equity shares and have fewer benefits than the common shares. The shareholders of preference shares do not have the right to vote in the meetings. However, the shareholders are entitled to profits before equity shareholders. In the case of liquidity of a company, the preference shareholders will be paid first. The shares could be of various kinds, redeemable preference shares/ irredeemable preference shares, participative and non-participative, cumulative and non-cumulative, convertible and non-convertible preference shares.

How to sell shares?

The shares could be bought and sold easily; traders have to just focus on investing in the right stock. The process of buying and selling the stocks is similar. Usually, traders know how they can buy the shares by brokers or directly through stock exchanges, but how to sell shares?

To get an answer to this, here we have discussed how traders can sell the shares in the stock market.

Traders, when buying the shares from the market with a brokerage trading account, they have to keep looking for opportunities in the market to sell. The brokers, such as Capixal, provide trading platforms and tools to analyse the market and never miss the market opportunity.

When traders find that the price of the share is higher than purchased with a good return, they can sell it in the market. However, the sell of shares could be to another investor or to a broker, or to a stock exchange. It all depends on the market availability and traders' efficiency.

Making money is the ultimate motive of traders, so every share purchased is sold but with some points:

When can traders sell the shares?

Traders' first thing to notice in the market is when they can sell the shares, it could be an emotional decision or a practical one with full background research. Traders may also sell the shares when they do not find good returns on the investment. If the market is down, the company is not doing well or has some losses. These could be the reason for the sell of shares.

On the other hand, traders may find good opportunities when the price of a share increases rapidly for the short term, and the trader decides to earn in exchange for the share.

Market Order

The market order types are used to limit the cost of trade; there is market order, limit order, stop-limit order, and stop order to trade. To sell the shares, traders can use any of the following to trade.

In a market order, traders can buy and sell the shares in a few seconds at the market price.

The limit order defines a limit on the trade order and automatically sells the shares when the price ranges above the limit set.

The stop-loss order is set to minimise the loss on the trade; when the traders want to sell the shares, traders set a stop-loss when the shares price is below or at the set price, traders' order gets executed.

Similarly, the stop-limit order is also used for setting a bar for the trade. In this, traders set a stop price and a limit price to trade.

Traders can use the above mentioned points to buy and then sell the stocks directly by setting the orders.

So, traders can easily sell the shares with the help of brokers and the advanced technology offered.

Conclusion

Trading in the stock market is complex if not done properly; traders require research, study, and market analysis for profitable share selling. For the sell of the shares, traders have to monitor the market and find the correct opportunity. However, if the decision is wrong, traders may have to suffer a loss.

Therefore, the sell should be as per the market understanding and analysis. A blind trade could be a sign of loss.