Indian Stock MarketMarket of “Hope, Discipline & Greed”
What is Stock ? Plain and simple, stock is a share in theownership of a company. Stock represents a claim on the companys assets and earnings. As you acquire more stock, yourownership stake in the company becomes greater.Whether you say share, equity, or stock, it all means the same thing.
Classification of stocksStocks are classified as2. Common Stock:- Common shares represent ownership in a company and a claim (dividends) on a portion of profits. Investors get one vote per share to elect the board members, who oversee the major decisions made by management3. Preferential Stocks:- Preferred stock represents some degree of ownership in a company but usually doesnt come with the same voting rights.
What is Stock Market ? A stock market is a market for thetrading of publicly held company stock andassociated financial instruments (includingstock options, convertibles and stock indexfutures).
What is Indian Stock Exchange ? Formal organizations, approved andregulated by the Securities and ExchangeBoard of India (SEBI), that are made upof members who use the facilities to exchangecertain common stocks.
INDIAN STOCK EXCHANGESTwo National Level Exchanges are2. National Stock Exchange (NSE)3. Bombay Stock Exchange (BSE) Total 22 Exchanges are there in India National and Regional level, all exchanges conducts 100% computerized trading.
NSE – National Stock Exchange Established In November 1992. Around 3500 Companies Are Listed Around 850 Main Brokers And 10000 Sub Brokers. Non Corporate : 35 - Corporate : 725 Daily Traded Companies Are Around 100% Average Daily Turnover Of Rs. 15000 cr.
BSE – Bombay Stock Exchange Established In 1875 As "The Native Share And Stock Brokers Association". Oldest Stock Exchange In Asia. Around 7000 Companies Are Listed. Around 935 Main Brokers And 5617 Sub Brokers. Non Corporate: 210 - Corporate : 710 Daily Traded Companies Are Around 3500 Average Daily Turnover Of Rs. 7500 Cr.
INDICESMajor Indices Sensex (BSE),S&P CNX Nifty (NSE ), CNX IT Index, CNX Nifty Junior, CNX Bank IndexOther Indices CNX 100, CNX FMCG Index, S&P CNX 500, CNX PSE Index, CNX Midcap, CNX MNC Index, S&P CNX Defty, CNX Service Sector Index, CNX Midcap 200, S&P CNX Industry Indices, Customized Indices, CNX Energy Index, CNX Pharma Index, CNX Infrastructure Index, CNX PSU BANK Index , CNX Realty Index
REGULATERY BODYSEBI – Securities & Exchange Board of India Established In 1992, As Per Securities & Exchange Board Of India , Act. To Protect The Interests Of Investors To Regulate The Securities Market. To Promote The Development Of The Securities Market
Basic requirement for Investing in stocks D-Mat Account:- Saving Bank Account:- Permanent Account Number (PAN):- Trading Account with Recognized Stock Broker:-
D-Mat Account and its Benefits A Dmat account is like a Bank Account, with the difference being that instead of cash, a Dmat account holds shares. Safe & convenient way to hold securities. Immediate Transfer of Securities. No Stamp Duty on Transfer of Securities. Auto. Credit Of Shares Into Dmat Account, Arising Out of Bonus, Right Issue ,Split, Merger, De-merger.
Trading AccountA Trading account is required if an individualwishes to trade, i.e. buy and sell shares in thestock exchange. A Trading account can also beopened with most banks and financialinstitutions, after filling up the required formsand providing identity and address proofs.
Trading ProcessOnce the Dmat account, Trading account andBank account are in place, an individual is readyto start trading. While it is not necessary to havethe Dmat account, Trading account and Bankaccount with the same organization.
THREE WAYS TO INVEST IN SHARESPRIMARY MARKET:-Where Company Directly Allots His EquityShares To Investors.SECONDARY MARKET:- Where Allotted Sharein Public Issue Are Bought And Soldby Investors With The Help Of Stock Brokersat Various Stock Exchanges.Future & Options:- It’s a derivative segmentof Underlying securities.
PRIMARY MARKETThe primary market is where securities arecreated (by means of an IPO).Initial Public Offering (IPO) is the first sale ofstock by a company to the public. A companycan raise money by issuing either debt or equity.If the company has never issued equity to thepublic, its known as an IPO. This market isknown as primary Market
SECONDARY MARKETA market on which an investor purchases an assetfrom another investor rather than an issuingcorporation.In this market Brokers becomes intermediate bodybetween buyer and seller.
FUTURES & OPTIONSIn finance, a security whose price is dependentupon or derived from one or more underlyingassets.The derivative itself is merely a contractbetween two or more parties.Its value is determined by fluctuations in theunderlying asset. The most common underlyingassets include stocks,bonds, commodities, currencies.
DIFFERENCE IN EQUITY & DERIVATIVESSEGMENTS IN EQUITY MARKETB) DELIVERY TRADING OR CASH MARKETC) INTRADY TRADING OR MARGINE MARKETF&O MARKET IS COMBINES FEATURES OF DELIVERY ANDINTRADAY TRADINGPARAMETERS:-G) TIMEH) NUMBER OF SHAREI) INVESTMENTJ) BROKERAGEK) BILATERAL RETURNS
TRADING TYPESINTRADAY TRADING:-In this type oftrading, you don’t have holding of shares,you just take a position which is must tosquare off same day before 3:30 o’clock.DELIVERY TRADING :- In this type oftrading, you buy shares and hold themtill you receive the returns on yourinvestment.Futures & Option trading (F&O):- In this type oftrading, you don’t have holding of shares ,you justmake a contract which is must to square offdepending on time frame of contract made(i.e.1/2/3 month) .
TYPES OF ORDERSON MARKET ORDERLIMIT ORDERIMMEDIATE OR CANCEL (IOC) ORDERSTOP LOSS ORDERTRAILING STOP LOSS ORDER
FACTORS INFLUENCING CHANGE IN STOCK PRICE DEMAND & SUPPLY, PROFITS, P.H , P/E RATIO, DIVIDENDS, BONUS SHARES, ECONOMIC NEWS, POLITICAL NEWS, COMPANY NEWS.
SOME COMMON TERMS IN STOCK MARKET BULL MARKET, BEAR MARKET, BROKERAGE, MARGINE, OPEN, CLOSE, DAY HIGH, DAY LOW, PREVIOUS CLOSE, % CHANGE, 52 WEEK HIGH LOW, RESISTANCE & SUPPORT, STT, TOT, OTLVT, STAMP DUTY.