Stock prices constantly fluctuate on the stock markets. A number of Speculators called day-traders try to make a living out of profits from these minor price variations. Their intention is not to hold the stocks for long nor to take delivery but to simply sell off the same day for a profit.
As a result of globalization and advent of fully automated screen-based electronic trading systems the margins have not only become wafer thin but steep market crashes on the back of global events have the potential to cause more losses to day-traders than gains
Since the price differences within a day are small, stockbrokers extend a facility called margin trading which is highly dangerous and must be totally avoided.
People engaged in such speculative activity under a respectable garb of trading in stocks have created misunderstanding in the minds of a number of citizens causing them to shy away from investing in stocks which when invested prudently and for ling periods of time is the sure vehicle to financial freedom and wealth.
|A man engaged in screen-based trading in stocks|
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