Buying is a trading term that refers to purchasing a financial instrument from someone else in exchange for cash or another asset.
Buying a stock refers to acquiring the ownership of a company’s shares. Investors buy stocks in order to sell them later at a higher price and turn a profit. They do this by issuing a buy order through their respective stockbroker.
While purchasing a stock assigns it a certain value, it is important to note that the assigned value is relative and can vary.
Sometimes, buyers are willing to purchase a stock at a premium price, which is essentially a price that is higher than its initial value. Conversely, they sometimes buy securities at a discount, which represents a security’s price that is lower than its initially estimated value.
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