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What is inactive and active share?

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Posted by : NIFM
13 September, 2013, 5:41 PM
Active shares are those in which transactions take place every day, or almost every day on the stock exchange. At the other extreme are shares in which transactions take place rarely, once in while called inactive shares moreover an inactive share has been defined as one, which is transacted less than two times a month in any stock exchange.   The main question why shares are inactive I because of there are no buyers for them at all. They are mostly shares of those companies which are not doing well . And whose future prospects appear to be dim. Naturally nobody wants to buy these kind company shares. As a result, existing shareholders of these companies find it difficult to get rid of their shares even at very low prices. And if nobody wants to buy these shares, why should you allow yourself to get stuck with dead investment, which you can’t liquidate easily, whenever you want always avoid to investing in inactive shares How do find out whether a particular share in inactive or not? The simplest way is to regularly check the stock market updates, which appears in the daily newspapers. If you noticed that a particular share has not been traded for a long time, you can mark it as inactive. Always remember one thing “every time you buy a share you must remember that one day you will want to sell it , if you feel to face difficulty in selling it – don’t buy it. Always take proper stock market knowledge and training before start trading in stock market, share market.

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