CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing all your money. Read our full Risk Warning.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What Are Equities in the Stock Market?

Getting down to the basics of the stock market: What are equities and what are their pros & cons?

Andrew Moran - Writer for Fortrade
By Andrew Moran
Joel Taylor - Editor for Fortrade
Edited by Joel Taylor

Updated May 9, 2024.

Whether you are watching CNBC or reading The Wall Street Journal, you might come across the term equities. This is also commonly referred to as stocks or shares representing ownership in publicly traded companies. Equities are bought and sold on stock exchanges.

Note: Fortrade offers the ability to trade with the price changes of products with CFDs and NOT to buy/sell ownership of the products themselves.

Benefits and Risks of Equities

Benefits


  • The possibility of capital appreciation
  • Dividends could provide potential future returns
  • You can be a part of one business's future success

Risks


  • Possibility of loss
  • The price volatility (during the coronavirus pandemic, stocks crashed, and equities slid).
  • Emotional trading, or impulsive decisions on fear or greed rather than sticking to your objectives.

» Are there trading terms you don't understand? Check out our helpful glossary for a quick explanation



Ownership and Investment Essentials

Let's be honest: trading equities is not for everyone, which is why many will use mutual funds or depend on a financial professional to make these decisions. But suppose you are equipped with the knowledge fundamentals and can compose yourself during ultra-bullish and ultra-bearish times, you could be able to turn a potential profit.

» Eager to start trading CFDs? Learn more about our online trading platforms