>>>GET MY NO. 1 TICKER FOR THIS WEEKEND’S INCOME TRADE!<<<
One of the most common misconceptions I hear from new investors is that buying a stock means directly supporting the company behind it.
Many people believe that when they buy a share of Microsoft (MSFT), Apple (AAPL) or Tesla (TSLA), their money goes into the company’s coffers — as if they’re personally helping to fund new innovations or operations.
It’s an understandable assumption, but it’s simply not how the market works.
When you purchase a stock, you’re participating in what’s known as the secondary market. This is where individuals and institutions trade shares that are already in circulation.
Your money doesn’t go to the company that issued the stock.
Instead, it goes to the seller of the shares — another investor, a hedge fund or some other entity. For example, if you buy Tesla stock from someone, the money goes into their pocket, not CEO Elon Musk’s.
To understand why this happens, we need to distinguish between the primary and secondary markets.
The Difference Between Primary, Secondary Markets
The primary market is where a company initially sells shares to raise capital. This is usually done during an initial public offering (IPO) or through new stock issuances.
In these cases, the company does receive the money, which it can use for research, hiring or other corporate activities. However, accessing the primary market is typically restricted to large institutions.
Retail traders like you and me rarely, if ever, participate in these transactions.
By the time a stock reaches the secondary market — where almost all trading occurs — the company has already received its funding. So whether you buy or sell Apple shares today, Tim Cook and his team at Apple aren’t seeing a dime of that transaction.
The same holds true for options trading.
When you trade options, your money doesn’t go to the underlying company. Instead, the counterparty is usually a market maker — a firm that facilitates trades by matching buyers and sellers.
This setup ensures liquidity in the market but has no direct financial impact on the company behind the stock.
So, if you’ve ever hesitated to buy a stock because you don’t want to “support” a company you disagree with, rest assured — you’re not funding them directly.
Conversely, if you’ve thought about buying shares to help a company grow, know that your investment doesn’t work that way. Companies only benefit from their stock price indirectly, through mechanisms like executive stock sales or the overall perception of value in the market.
Understanding this distinction is crucial for making informed decisions in the stock market. It clears up unnecessary concerns and helps you focus on what really matters — your investment strategy and the fundamentals of the companies you choose to invest in.
Kane Shieh
Kane Shieh Trading
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
- Telegram: https://t.me/+Ji2OakXnGMM5OTI5
- YouTube: https://www.youtube.com/@GammaPockets/featured
Important Note: No one from The TradingPub team or Kane Shieh Trading will ever contact you directly on Telegram.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. LIVE AT 1 PM ET: My No. 1 Ticker for a Weekend Income Trade
The weekend is almost here and if you know me, then you know what that means…
It means I’m gearing up to target another weekend income this very week with pro trader Graham Lindman.
Now, I cannot promise future returns or against losses…
But if you want to see the No. 1 stock pick we’ll be using to jump on the next weekend income trade this week at 1 p.m. ET today, Jan. 9…
That’s when I’ll give away the name of my No. 1 ticker…
And as you’ll see, if all goes as planned, we’ll have a shot to trade this ticker — targeting weekend income with the same tactic that’s helped us nail a 92% accuracy so far on live-issued trades!
Here’s Your Login Link for 1 PM ET!
The profits and performance shown are not typical. We make no future earnings claims, and you may lose money. Trade at your own risk. From 10/28/24 through 12/26/2024 on live trades published in real time, the win rate is 92% over a 3-day average hold time.
