Stocks

Stocks are a type of security that gives shareholders an ownership interest in a company. Stocks also are called as “equities”. It is mainly bought and sold on exchanges. Stocks are traded to make money from daily changes in prices. Stocks can be traded in the short-term and long-term. Share prices are determined by the supply and demand for the orders of buyers and sellers. For liquidity and capital raising purposes, listing on exchanges benefits companies. Trading individual equities includes the risk of substantial losses in addition to the potential for rapid returns for those who time the market correctly. Wealth of a single firm may increase faster than the market, but it may also decline just as quickly.

Stocks are leveraged products, therefore when you hold a position overnight or over a weekend, you are essentially borrowing one currency and lending another. Since the interest rates of different currencies can vary, there is a cost to borrowing or lending each currency. This cost is applied to your stocks positions in the form of swap. No swap is applied if there is intraday trading.