CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

All You Need to Know About Shares & Stocks

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Investing in shares involves buying a portion of ownership in a company through the purchase of its shares, with the aim of earning a return on investment through price appreciation or dividends. Does this all sound too confusing? Have you been meaning to enter the investing world but don’t know how? XTB has all the information you need to get started. 

How to invest in shares?

Before investing in shares, it's important to understand the risks and rewards associated with the stock market. Research and educate yourself. You can start by reading books, articles, or attending seminars.  XTB offers a wide range of educational articles for every trader. You'll need a broker to buy and sell shares on the stock market. Look for a reputable broker that suits your investment goals and budget. XTB offers 5400+ instruments from around the world giving you the opportunity to choose between Forex, Indices, Commodities, Shares and ETFs.  Once you've chosen a broker, you'll need to open an account. This typically involves providing personal information and funding your account with money. Start your journey by creating an account with the award-winning xStation platform. Conduct research on companies and industries that interest you.

Look at their financial statements, management team, growth potential, and industry trends.Once you've identified the shares you want to buy, you can place an order with your broker. XTB has a guide on how to place your first stock trade. You can choose to buy a set number of shares at the current market price, or set a limit order to buy shares at a specific price. Keep track of your shares and their performance over time. You may want to adjust your investment strategy or sell your shares if they're not performing as expected. You should always monitor your investments. Remember that investing in shares involves risk, and you should never invest more than you can afford to lose. It's also important to diversify your portfolio by investing in a variety of instruments. 

Why do companies introduce shares?

Companies introduce shares in order to raise capital or financing for their operations. By issuing shares, the company can sell ownership stakes to investors who believe in the company's potential for growth and profitability.When a company sells shares to the public, it is known as an initial public offering (IPO). An IPO allows the company to raise significant amounts of capital by selling a portion of the ownership of the company to a large number of investors. This capital can then be used to fund the company's growth, research and development, or other projects.

In addition to raising capital, shares provide a number of other benefits to companies. Shareholders may be more likely to support the company and its management team, as they have a vested interest in the company's success. Furthermore, the company may be able to use its shares as a currency for acquisitions or other strategic investments.Finally, shares also provide liquidity for investors. By being able to buy and sell shares on public exchanges, investors can easily enter and exit positions in the company, allowing them to manage their investments and respond to changes in market conditions.

What’s the difference between stocks and shares?

In general usage, the terms "stocks" and "shares" are often used interchangeably to refer to ownership in a company. However, there are some subtle differences in their meanings:

Shares typically refer to the individual units of ownership in a company that are available for purchase. When a company is formed, it may issue a certain number of shares of stock, each of which represents a portion of ownership in the company. Shares can be publicly traded on stock exchanges or held privately by individuals or institutions.

Stocks, on the other hand, are a broader term that encompasses all of the shares of ownership in a company. The stock of a company represents the total value of all of the shares combined. So, if a company has issued 1,000 shares of stock, the stock would represent the value of those 1,000 shares.

In essence, shares are the individual units of ownership, while stocks are the collective value of those shares.

What are fractional shares?

Fractional shares are portions or fractions of a full share of a company's stock. Instead of purchasing a whole share, investors can buy a smaller, more affordable piece of the share. Fractional shares have become more popular with the rise of commission-free trading and investing apps, which allow investors to buy and sell fractional shares in real-time. Fractional shares are often used to diversify an investment portfolio, as investors can purchase small portions of multiple stocks or exchange-traded funds (ETFs) rather than investing all their money in one or two companies. Additionally, fractional shares can be useful for investors who want to reinvest dividends, as they can buy additional fractional shares with the dividends they receive.

How to choose the best companies to invest in?

Choosing the best companies to invest in can be a challenging task, but there are several factors you can consider to make an informed decision. Here are some steps to follow:

  • Research the company: Before investing in a company, research its financial statements, earnings reports, and other relevant information. Look for information about the company's revenue growth, profit margins, and cash flow. You can also consider the company's management team, competitive advantage, and market share.
  • Look for competitive advantage: Consider whether the company has a sustainable competitive advantage, such as a strong brand, unique technology, or a dominant market position. This can help the company maintain profitability and growth over the long term.
  • Check the industry trends: Evaluate the current state of the industry in which the company operates. Look for trends that could impact the company's performance, such as changes in consumer preferences, new regulations, or technological advancements.
  • Consider valuation: Evaluate the company's current valuation compared to its historical valuation and its peers. A company that is undervalued relative to its peers may be a good investment opportunity.
  • Diversify: It's important to diversify your investments across multiple companies and industries to reduce your risk. Avoid putting all your money into a single company, as this can be risky.

What are the differences between dividend stocks and shares?

Shares and dividend stocks are closely related but are not the same thing.

A share is a unit of ownership in a company, representing a portion of its total value. When you purchase a share, you become a part owner of the company and have the right to vote on important company decisions, such as electing the board of directors or making changes to the company's charter. Dividend stocks are shares of companies that pay regular dividends to their shareholders. Dividends are payments made by companies to their shareholders as a portion of their profits. The amount of the dividend paid to each shareholder is typically determined by the company's board of directors.

So, in summary, all dividend stocks are shares, but not all shares are dividend stocks. Shares represent ownership in a company, while dividend stocks are shares of companies that pay regular dividends to their shareholders.

What is the Stock Exchange?

The stock exchange is a centralised marketplace where stocks and other financial securities are bought and sold by traders and investors. It is a platform that facilitates the buying and selling of stocks, bonds, options, futures, and other financial instruments. The stock exchange provides a transparent and regulated marketplace where investors can buy and sell securities based on the prevailing market prices. The prices of securities are determined by the forces of supply and demand, and they fluctuate based on a variety of factors, such as economic indicators, company performance, and geopolitical events. The stock exchange plays a crucial role in the economy by providing companies with access to capital and investors with opportunities for wealth creation. What is the best time for trading forex? Within the global market, the four major forex exchange markets are in London, New York, Sydney and Tokyo. Find out more about the markets and the best time to invest here

What is withholding tax?

The UK does not impose withholding tax on dividends paid to shareholders.

Instead of a withholding tax, the UK operates a system called the dividend tax regime. Under this regime, dividends are paid to shareholders net of tax, meaning that the tax liability is the responsibility of the shareholder rather than the company distributing the dividends.

As an individual shareholder in the UK, you may be subject to tax on dividends received based on your income tax rate. The current tax rates applicable to dividend income are as follows:

  • Basic Rate: If you fall within the basic rate tax band, dividends are taxed at a rate of 8.75%.
  • Higher Rate: If you fall within the higher rate tax band, dividends are taxed at a rate of 33.75%.
  • Additional Rate: If you fall within the additional rate tax band, dividends are taxed at a rate of 39.35%. 

Please visit or contact HM Revenue & Customs (HMRC) to ensure you have the most accurate and up-to-date information

If you have a diversified portfolio you will most likely have shares from all over the world. If you have a UK trading account and have bought shares from the US, the US government will charge you tax on any profit you make due to the fact you are not a US citizen.  

If you complete a W8-BEN form (you can do this from the Client Office), you lower the withholding tax for dividends and interests from 30% to 15%. 

Investing in stocks on the XTB trading platform is easy and intuitive. The best way to make a transaction is to use the classic order window that contains full information about the transaction, which can be accessed by clicking the " + " symbol next to the instrument.

If you have any further questions our dedicated team is available to address any questions or concerns you may have. Feel free to reach out to us at, and we will be delighted to provide you with the guidance you need.


Although shares/stocks offer the potential for high returns, investing in them can be risky as you are investing in the company's future.It is worth noting that you participate in a company's growth, but these investments also carry the potential of declining in value, where they can even drop to zero. Before investing make sure you have conducted your own research. Risk management is important and you should invest cautiously.

The minimum amount you can invest in a stock is €10 per trade. Real Shares and ETFs investing is 0% commission up to €100,000 per calendar month. Investments at or above €100,000 per calendar month will be charged 0.2% commission.

As shares/stocks operate when the markets open and close there is less volatility out of hours. However, you have the opportunity to become a day trader. Day traders seek short term market opportunities. Usually they seek stocks that have short-term price momentum to buy them early in the session and sell before the end of a trading day. Day Traders focus on technical analysis to select stocks that are in the spotlight but cannot ignore fundamentals altogether. They need to ensure that they trade liquid stocks and be aware of corporate actions that take place.

Day Trading requires disciplined risk management. Because Day Traders focus on short term moves, their positions could be relatively large. Therefore a strict risk limit needs to be assigned to each trade (for instance a trader may want to risk 5% of his capital for each trade) and stop loss orders need to be in place to protect traders from unfavourable price movements.

Written by

Eleana Ntagia

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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