Trading Fundamentals

Day 2 summary
1.Stock Trading happens online provided a DEMAT account is opened by the trader via a broker which is registered with SEBI

2.
Stock exchange collects sufficient funds from registered brokers through which they ensure the  settlements are done to avoid counter party risk.

Brokers in turn allows the trade to happen checking for sufficient funds in traders account.

3.Stock market investment can get huge return that is otherwise impossible from any other source of investment provided you have invested at the right stocks. There are instances where investors have gained manifold within short period of time by investing in certain stocks

4.Once you have the shares in your DP, you can sell them on an exchange of your choice. You could have purchased on BSE and sell it on NSE and vice versa.

5.If the buyer quote high price to buy a stock the trade will be executed in a best selling price and the shares will be credited in demat after the market got over
6.You can place an order either through online (need trading account with a broker) or through call and trade with a broker.

Types of Order :-

1. Buy Order – You wish to buy share(s).

2. Sell Order – You wish to sell share(s).

7.Long position : when price is expected to increase , stocks are bought first and sold later .
Short position : when price is expected to fall , stocks which don’t belong to us are sold first and bought later .
8.Position trading encompasses the longest trading time frame; trades generally span a period of months to years.
Intra day trading refers to a style of trading in which positions are entered and exited on the same day.
Futures & options :- the validity is till the expiry date as per the contract.