Share trading refers to the act of buying or selling a share. If this act of execution is done on a short term basis it is normally refered to as "day trading". Whilst holding your share trade for longer than a week may then be categorized as swing trading, a term which comes from the act of trading short term "swings" up and down in the market over periods of weeks and months rather than years. Then buying shares to hold for a long term period (maybe years) is plain old "investing" and the most common way most investors choose to hold their shares.

Whilst day trading shares online may be profitable if you catch the right moves (or not profitable if you catch the wrong moves!) you should take into consideration the cost of frequent dealing online. For ever trade you execute your broker will charge you a commission This will vary from broker to broker and can also depend on the valuation of the transaction you execute. Also for each share trading transaction you will be charged "Stamp duty reserve tax" for paperless transactions such as internet deals. This tax is added to your settlement price and collected by your broker on behalf of the UK Government.

When the price of a share is published "mid" price is the usual price quoted. The mid price is halfway between the bid and offer price, the prices at which you can currently buy or sell a share. Your broker will be prepared to sell you share at an offer price, or they will buy a share from you at bid price. The bid/offer prices are determined by many things, but the most common thing is the amount of shares the marketmaker holds which your broker deals with. Your broker will go directly to a marketmaker at the stock exchange to execute the deal on your behalf. you must remember this is a "market" and marketmakers do not wish carry too much stock in case of unexpected events, so if your stock has been getting sold a lot at that point in time you must expect get a lower bid price for your stock. Similarly if you go to buy a stock which is being sold you might get a lower offer price at which to buy your shares.

Back to share dealing.