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If you would like to find out more about which Revolut entity you receive services from, please click <a href="https://www.revolut.com/help/more/legal-topics/which-revolut-companies-provide-me-with-services">here</a>. If you have any other questions, please reach out to us via the in-app chat in the Revolut app. Revolut Bank UAB is a bank established in the Republic of Lithuania, registered address: Konstitucijos ave. 21B, Vilnius, 08130, the Republic of Lithuania, number of registration 304580906, FI code 70700. Revolut Bank UAB is licensed by the European Central Bank and regulated by the Bank of Lithuania. Revolut Bank UAB provides credit, payment, current account, and demand deposit account services. Insurance distribution service is provided by Revolut Insurance Europe UAB, which is authorised by the Bank of Lithuania as an insurance broker undertaking. Registered address: Konstitucijos ave. 21B, Vilnius, 08130, the Republic of Lithuania, number of registration 305910164. Revolut Ltd (No. 08804411) is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 (Firm Reference 900562). Registered address: 7 Westferry Circus, Canary Wharf, London, England, E14 4HD. Insurance related-products for Revolut Ltd customers are provided by Revolut Travel Ltd, which is authorised by the Financial Conduct Authority to undertake insurance mediation services (FCA No: 780586) and by Revolut Ltd, an Appointed Representative of Revolut Travel Ltd in relation to insurance distribution activities. Investment services in the European Economic Area ("EEA") are provided by Revolut Securities Europe UAB (registration code 305799582, address Konstitucijos ave. 21B, Vilnius, Lithuania, LT-08130), which is authorised by the Bank of Lithuania as a brokerage firm.
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A stock is a type of financial instrument that entitles the holder to a fraction of ownership in a publicly listed company. Through the ownership of the stock, the holder may receive a portion of a company’s earnings, distributed as dividends. Units of stock are called "shares".

What is a stock?

Companies can issue (sell) stock to the public to raise funds to run their businesses. The holder of a stock (a stockholder) owns a piece of the company and therefore has a claim to a part of the company’s assets and earnings.

Where do stocks come from?

A stock chart is a price chart that shows a stock’s price over time. Stock chart time frames are typically daily, weekly, monthly, quarterly, or annually. Price charts can be used in different ways. Some investors try to forecast short-term price movements and therefore usually concentrate on daily and intraday data while others study weekly and monthly charts to spot longer-term price trends.

What are stock charts?

People invest in stocks to generate returns. You can generate revenue from owning shares (units of stock) in two ways:<ol><li>Companies can decide to return money to their shareholders via dividends. This is cash paid to investors for each share that they own. Not all companies are dividend-paying companies.</li><li>The value of the shares in your portfolio could increase. When investors sell their shares, they pocket the difference between the price at which the shares were bought versus when they were sold.</li></ol>Nonetheless, people can lose money when investing in shares, particularly if the price at which they sell the stock is lower to the price at which they bought it, or if the cumulative costs associated with purchasing, owning, and selling these shares are higher than the difference between the initial price of purchase and the price at which the shares were sold for.Revolut doesn't provide any investment, legal or tax advice as part of its services, so please make sure to seek independent advice, as we won't be held accountable.

Why do people buy stocks?

Ownership is determined by the number of shares a person owns relative to the number of total shares the company has issued. For example, if a company has 1,000 shares of stock and one person owns 100 shares, that person would own 10% of the company's assets and earnings.

What is stock ownership?

Currencies, crypto and trading

Stocks and ETFs

More help with Stocks

Getting started with trading

Stock Basics

Stocks essentials

In order to buy stocks, you need the assistance of a stockbroker who is licensed to purchase tradable financial assets directly from stock markets on your behalf. For example, Revolut Securities Europe UAB provides customers with the ability to buy and sell stocks on a non-advisory (i.e. execution only) basis via the Revolut app, and transmits those orders to a Third Party Broker.If you're a customer of Revolut Trading Ltd., please see the answer to this question <a href="https://help.revolut.com/help/wealth/stocks/getting-started-with-trading/introduction-to-stock-trading/stock-prices/what-is-a-stock-broker" rel="noopener noreferrer" target="_blank">here</a>.To see which Revolut Trading Entity is your service provider, please click <a href="revolut://app/faq?key=question.how-do-i-know-which-revolut-trading-entity-is-providing-me-services" rel="noopener noreferrer" target="_blank">here</a>.

What is a stock broker?

The term stock price refers to the current price that a unit of stock is trading for on the market. The price of a stock will go up and down as a consequence of a number of different factors. For example changes in the economy as a whole as well as changes to the individual company’s operations can impact the stock price.

What is a stock price?

The term bid and offer (also known as bid and ask) refers to a two-way price quotation that indicates the potential price at which a share can be sold and bought at a given point in time. The bid price represents the maximum price that a buyer is willing to pay for a share while the offer price (ask) represents the minimum price that a seller is willing to accept for that share. The offer price is always higher than the bid price. You'll pay the offer price if you're buying the stock, and you'll receive the bid price if you are selling the stock.Bid offer spread = Offer price minus (-) Bid price

What is a bid-offer spread?

Brokers and trading platforms often charge clients a fee for using their services – These are commonly referred to as commission or trading fees. Brokers and trading platforms may charge investors a commission to execute orders for the buying and selling of stocks on their behalf. Commission charges vary from firm to firm so it's important to verify each broker's and trading platform’s fee schedules before buying stocks. Other fees (such as custody and FX fees) may apply. See below for a non-exhaustive list of different fees used by various brokers:<ul><li>Commission (trading fee) – Usually charged for execution of orders</li><li>Custody/management fee – Typically charged for keeping assets administered</li><li>FX fee – Charged when converting between different currencies when trading</li><li>Deposit fee – Typically charged as a percentage of the funds deposited for investment</li><li>Withdrawal fee – Typically charged as a percentage of the amount withdrawn from a customer’s investment account</li><li>Inactivity fee – A fee charged when a customer has not traded for a predefined time period</li></ul>You can find out more about Revolut’s fee schedule <a href="revolut://app/faq?key= question.what-fees-will-i-be-charged-for-my-trading" rel="noopener noreferrer" target="_blank">here</a>. Please familiarise yourself with our fee schedule before using Revolut's investment services.

What is commission?

Stock Prices

Stock markets are exchanges where existing owners of shares can trade with potential buyers. Stock markets are known as secondary markets because buying shares on the stock market means that you are not buying shares from the company directly, you are buying them from the existing shareholders.

What are stock markets?

As part of carrying out fundamental analysis, stock investors can learn from analysing a company’s financial statements. For example, the company's income statement, balance sheet and statement of cash flows can be useful in understanding how a company functions, its stability and how much its stock is worth. Metrics can vary by sector and are not a sole indicator of the company’s performance.Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What are stock financials?

The VIX is a real-time market index representing the market's expectations for volatility over the coming 30 days, based on the S&amp;P 500 index. Investors use the VIX to measure the level of risk, fear, or stress in the market when making investment decisions. When the VIX is high, volatility is high, which is usually accompanied by market fear.Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is the VIX?

Understanding the market

Market Basics

Simply put, a bear market is one in which prices are heading down and a bull market is used to describe a market where prices are rising. When a market is said to be bullish, people are looking to invest as confidence is high and markets are rising. Bearish markets follow a downward trend as investors are selling stocks, particularly riskier assets.

What are bullish vs bearish markets?

Share prices can be analysed through what is known as technical and fundamental analysis. Technical analysis seeks to anticipate future price movements of shares by looking at historical price and volume data. By studying previous price trends, technical analysts attempt to identify whether a stock is about to enter a bullish or bearish trend.Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is technical analysis?

Fundamental analysis is concerned with identifying whether a stock is over or undervalued. This is done by analysing factors such as the individual company’s perceived ability to generate a profit, focusing on company data, financial statements and decisions from senior management of the company(s).Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is fundamental analysis?

Many investors use analyst recommendations to help evaluate a stock in conjunction with their own technical or fundamental analysis. Analysts often are researchers working for investment banks or brokerage firms who perform extensive fundamental and technical research to provide buy or sell recommendations for stocks. They may also provide a price target which is an estimate of what they think a share price might be in about 12 months’ time.Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What are analyst recommendations?

News and social media can play a significant role in the investment world. For example, negative news such as bad earnings reports, economic and political uncertainty, and unfortunate occurrences (such as natural disasters) can cause people to sell stocks. In terms of social media, investors sometimes use platforms to monitor market sentiment based on growing interest in a particular area. It’s important to consider that social media often contains fake news and trends can quickly build based on this.Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

How does News and Social Media impact stocks?

Analysing the Market

Market sentiment refers to the overall attitude of investors towards a particular stock or market. It can be described as the feeling or tone of a market, or its crowd psychology resulting from trading activity and price movements of stocks in that market.Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is Market Sentiment?

Market sentiment indicators aim to show the collective perception of investors and traders about a specific market. Each sentiment indicator is unique in its own way and can tell a particular story about what is happening in the market. Popular sentiment indicators include the CBOE Volatility Index (VIX), the High-Low Index, and moving average indices.Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What are Market Sentiment Indicators?

Market Sentiment

A company’s earnings per share is its net profit minus its preferred dividends divided by its total number of outstanding shares. It shows how much of a company’s revenue could be distributed to investors. A high or increasing EPS is taken as a good sign by investors. On the other hand, a low or declining EPS can often deter investors as it could be an indicator of a downturn in a company’s performance.EPS = Net Profit - Preferred Dividends / No. of outstanding sharesPlease note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is EPS (earnings per share)?

A common method of analysing a stock is studying its price-to-earnings ratio. A P/E ratio is calculated by dividing the stock’s price per share by its earnings per share. Investors often compare a stock’s P/E ratio to competitors or to the sector average to get an indication of whether it might be over or undervalued. Lower P/E ratios are often considered as value stock.P/E = Price per share / Earnings per sharePlease note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is a P/E ratio (Price-to-Earnings)?

A P/CF ratio is calculated by dividing a company's market capitalisation (the value of all its shares combined) by its cash flow from operations (the amount of cash generated by a company’s typical business operations). It is sometimes considered an alternative to the P/E ratio because cash flows are not impacted as significantly as earnings by accounting methods such as depreciation. A lower P/CF ratio could indicate that a stock is undervalued and a high ratio that it is overvalued.P/CF = Value of all shares / Operating cashflowPlease note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is a P/CF ratio (Price-to-Cashflow)?

Return on equity (ROE) is a company’s net income divided by its shareholders’ equity (its liabilities subtracted from its assets). It is a measurement of how effectively a business uses equity to produce income. A higher ROE could suggest that a company’s management team is more efficient when it comes to utilising investment financing to grow their business. However, a high ROE could also mean the company has taken on a lot of debt.ROE = Net income / Shareholders' equityPlease note that financial analyses and ratios should not be looked at in isolation when making investing decisions.

What is ROE (Return on Equity)?

Financial ratios for companies' analysis

When you buy a stock you can both lose and gain money. You can make a loss if the value of the stock that you own goes down and you decide to sell – the loss will be the difference in the price that you bought the stock for, any associated costs, and the price that you sold it for. In the event that your investment’s value goes to zero, you would lose all of your invested money. For example, imagine you make an investment of $100 by buying 10 shares of Company X’s stock at $10 per share. Then Company X’s share value drops to $0 because they cannot pay their debts and they default. In this scenario you would lose your $100 investment. There are other risks such as foreign exchange fluctuation involved too – please see <a href="https://www.revolut.com/legal/trading" rel="noopener noreferrer" target="_blank">here</a> for more details.

How could you lose money from buying stocks?

An ADR is a security issued by US depositories that acts as a representation of shares for non-US companies (e.g., Alibaba, Sony). You can check out our available investment universe in the 'Stocks' feature of the app, even without creating a trading account.

What's available to trade?

What is an ADR?

An exchange traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.

What is an ETF?

A fractional share is just that: a fraction of a whole share. Companies issue whole units of stocks, called shares, which are then traded on the public market for investors to buy. If you buy a fractional share that means you’re buying a little piece of a company’s stock – a fraction of it.Yes, you can buy and sell fractional shares on the Revolut app – everyone should have access to investing!Whereas a single share in a company might cost $1,000, fractional shares mean you can still invest in a company with $10 or $100.You'll need to invest at least US$1.00. The minimum amount of shares you can buy is 0.00000001.Please remember that when investing, your capital is at risk.Please note that at the moment, you cannot submit fractional shares for Limit orders.For more information on fractional shares, you can check out our explainer blog post <a href="https://blog.revolut.com/fractional-shares-explained-2/" rel="noopener noreferrer" target="_blank">here</a>.

What is a fractional share? 

<h4>Did you know, you can invest in SPACs on Revolut?</h4>Special Purpose Acquisition Companies (also referred to as &#8220;blank cheque&#8221; or &#8220;shell&#8221; companies) are companies with no commercial operations, that are formed strictly to raise capital for the purpose of acquiring another company or listing on stock exchanges to attract potential investors for their ventures.A company that&#8217;s already in operation can then merge with, or be acquired by, the SPAC and become a listed company itself, instead of executing its own traditional Initial Public Offering (IPO).When a company plans to go public through a traditional IPO, the process can take a year or more to complete. By using a SPAC, it may be a lot quicker.SPACs are created for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, re-organisation or similar business combination with one or more businesses.<h4>How does the SPAC&#8217;s acquisition process work?</h4>From the establishment of a SPAC, the company usually has 24 months to complete the entire acquisition process.In this process, many steps are performed, but the main ones are:<ul><li>Searching for a target company to acquire</li><li>Negotiating a takeover agreement</li><li>Holding investor meetings and seeking approval for the acquisition from its shareholders</li><li>Execution of the merger</li><li>If the SPAC does not complete a merger within this limited time frame, the SPAC liquidates and investments are returned to its public shareholders.</li></ul><h4>What happens to the SPAC after the merger announcement?</h4>This last step of creating the listed successor company is referred to as a &#8220;de-SPAC&#8221; transaction.After the SPAC completes a merger with a target company, the previously privately held company will become publicly listed. The stock ticker for the SPAC is changed to reflect the name of the acquired company and with this it will start trading on the selected exchange.<h4>What are the main risks when investing in a SPAC?</h4>A SPAC is a high-risk investment. SPACs have recently been very popular with investors around the world, however this investment carries risks due to several factors:<h4>No Merger</h4>The SPAC may fail to identify a target company within the required time period (typically 24 months) and have to return funds to its investors, causing no return to be achieved over the period that the capital was invested.<h4>Targets</h4>Increasing competition in this space can drive SPACs to targeting companies at ever earlier development stages and so influence and drive-up investment risks, especially if they try to invest in &#8216;hot&#8217; or newer sectors such as emerging technologies (e.g.: space exploration). Early-stage companies may have a short financial history and still be developing their internal controls. They may also be in early negotiations with their sponsors (founders) and be heavily based on forward-looking projections. Targets will need to be able to withstand the rigour and requirements that will apply once they become a public company.<h4>Conflicts of Interests</h4>Sponsors and directors of SPACs may have personal interests that compete with the best interests of public shareholders.Investors must place a great deal of trust in the SPAC&#8217;s management team to find the best target company for a merger since some parties may be financially incentivised to ensure that the SPAC completes a merger within the limited time available.<h4>IPO versus SPAC merger</h4>In contrast to an IPO, in the SPAC&#8217;s merger process there is no underwriter so the comprehensive due diligence which is usually associated with a company going public may not be carried out.SPAC sponsors have a strictly limited time to close a deal, which could influence the effectiveness of their acquisition research, especially when it is not guaranteed that the sponsor or management team has continued involvement in the target company post-merger.Because of this time constraint the SPAC founders may focus on their ability to close a transaction rather than the suitability of the target company going public.

What is a Special Purpose Acquisition Company (SPAC)?

The trading service Revolut provides is an execution only service, and Revolut does not provide personal financial advice on what to buy or sell, or recommendations of any kind.

Does Revolut provide any investment advice or recommendations?

Execution-only service is a trading service that is restricted to only the execution of trades, without the client receiving any advice about the merits or risks of the investments or their appropriateness and suitability.

What is an execution-only service?

You can see which Revolut Trading Entity is providing you with services by following these steps:<ul><li>Tap the 'Stocks' tab in your Revolut app</li><li>Scroll to the bottom of the page and review the disclaimer content</li></ul>

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