Welcome to Our Stocks Investing 101. This is the second Thread in the series. In our first Thread, I pointed out that stock market is like a giant “Supermarket”, like Shoprite. The only difference is that, the merchandise sold are small pieces of ownership in companies, Shares.
When a company is Listed for the public to buy Shares, they are assigned a Stock Symbol. It is those symbols that you buy. Each time you buy one, or the number of those symbols you buy, indicates the value of your ownership in that particular company.
So today, let’s talk about the language of buying those symbols, aka, Shares in a company. To begin, you have to open an account with a REGISTERED AND LICENSED stock brokerage company. Doing that grants you access to the “Supermarket”, aka, Stock market.
Now that you are inside, you can then place your orders. The language of buying and selling are ASK and BID. So let’s say you want to buy 100 shares of NETFLIX. Their Symbol is NFLX. You will see an ASK price. This is what you will pay to buy it, per share.
When you get ready to sell, you will see a BID price. This is what you will sell the ones you previously bought. The difference between the two prices is called a SPREAD. This is what the Stock Exchange Charges you . Then your Broker Charges a little more for their platform use.
BUT WAIT! You DON’T have to OWN a stock to SELL IT. You can sell a stock YOU DON’T own! It is called Selling a stock SHORT. To do this, you borrow the stock from your brokers and sell them. When you SELL SHORT, you hope and want the STOCK TO CRASH.
When the Stock crashes, you buy it back and give it back to your brokers who loaned it to you. Your profits is the difference between the high price and the low price. Recall we talked about Citron “research” in our first thread? That is their business model
Citron “research”, is a Stock shorting company. All they do is hope the price of a stock goes down. The lower the price, the more money they make. It is a PERFECTLY LEGAL business model that many companies are in.
Going back to JUMIA for example, they started releasing their articles when JUMIA was trading at above $30++. Many Nigerians helped them amplify their stories, the share prices of Jumia is around $6.00 today. So imagine, they “bought” by shorting 3 million shares.
At today’s price, they have walked away with more than $10 MILLION. I wonder how much folks that helped them made! They made same calls on TESLA, NETFLIX, AMAZON, SHOPIFY and the list goes on. So far, it hasn’t worked unlike the traction they gained in Nigeria and JUMIA.
In the next Thread, we will examine Market Strategies. We will look at how to make and lose money. We will look at FEAR and how it drives the market. To be continued
Till the next Thread, look at these two pictures 
