Introduction

Learn how stock and options trading works along with the important basic definitions. Explore the professional content and get ready to start trading! Learn everything about technical analysis, options, bonds, and fundamental analysis!

Download content in pdf:

The stock exchange

Securities

Banks, brokers, brokerage firms

Banks are the most important participants of the financial intermediary system. By definition, a bank is an institute offering financial services. Its two main activities are: providing loans and collecting deposits. Banks collect the savings currently not in use (passive banking) and pump it into the part of the economy where funds are needed (active banking). Thus, banking is the motor of the modern, capital-based economy. Banks have two main revenue sources: fees of the different financial services and interest rates of loans.

A broker is someone who buys and sells goods or assets on behalf of his or her customers in exchange of a brokerage fee. The deals can be executed both on the stock exchange and outside the stock exchange. Brokers also trade with securities and may be entitled to execute different account transactions. According to the new Hungarian securities regulations, the former requires a registered capital of HUF 20 million, while the latter requires HUF 100 million. Besides the required capital, a professional (the broker) must be nominated to act on behalf of the investor. In order to execute the orders of the clients, the broker must have a professional securities examination certificate, have at least two years of professional experience on the securities market, and must be morally irreproachable. In Hungary, the activity of trading with securities must be executed through specialised companies. However, on the commodities exchange and on the futures market of the Budapest Stock Exchange, individual brokers are also allowed to become members.

Banks, brokers, brokerage firms

The main task of brokerage firms is to act as an agent for securities trading. This means that the investment service provider acts in its on name, but on behalf of another person (the customer) to sell or buy. The investor enters into a contract of agency with the chosen brokerage for every single sell or buy order. The contract of agency must clearly specify the financial product to be traded, its price and quantity, and the nature of the order (sell or buy). The legal and financial conditions of the orders are recorded in the general business rules of the brokerage (complying with statutory requirements). The fee of the services may vary for the different brokerage firms.

The two main types of orders made by the investor are the following:

  • In case of a sell order, the customer sells his or her securities. If the security has a physical form, it needs to be handed over. If the security exists on an account, it should be transferred to the brokerage firm’s account.
  • In case of a buy order, the customer buys securities and must pay in exchange accordingly. The amount to be paid consists of two parts: the price of the security and the commission of the agency. In both cases the settlement happens only once the order has been fulfilled.

Fundamental and technical analysis

Risk and diversification

Earnings

Initial Public Offering (IPO)

Online trading

Market news

Online Trading Course - for Beginners!

  • Specially made for beginners
  • From Forex to the Option trading
  • Immediate techniques

Are you still using a Demo account? Are you afraid to start live trading? We have good news for you!

Successful trading can be learnt! Here is what you should do: learn it.

The Huntraders E-Learning system is based on more than 10 years of trading experience to provide practical information for our members. The 8 topics have been thematically structured to offer the information and knowledge necessary for all traders. The course gives an inevitable knowledge for successful trading to start making profit.

If you are a beginner, this is the first step.

Trading Guides

Indicators

25 indicators. Find the indicators matching Your strategy and learn their trading signals through examples!

Candlestick patterns

88 candlestick patterns. Increase Your profit by recognising candlestick patterns and analysing the market with their help.

Chart patterns

31 chart patterns. Recognise triangles and breakouts, calculate the target prices defined by them.

Option strategies

49 option strategies. Apply the strategies that best suit your purposes and learn how to calculate their potential profit and risk through examples.

The modules of trading course

Everything You need to know about stock and option trading.

Download the trading training materials for beginners here: