Introduction to STOCK TRADING

Trading of shares in a stock exchange takes place through registered stockbrokers electronically. Stock exchanges ensure the traders counter party risk through brokers. Stock trading is the place where people can multiply their money in short time. It is possible to buy stocks from BSE & sell it in NSE . A order needs to be placed using DEMAT account with the details on the share price, quantity and buy or sell order. This will be routed to exchange through broker. A long trade is initiated by purchasing with the expectation to sell at a higher price in the future and realize a profit. A short trade is initiated by selling, before buying, with the intent to repurchase the stock at a lower price and realize a profit.Stock trading can be done as Gambling or Business. After a company goes public and starts trading on the exchange, its price is determined by supply and demand for its shares in the market. A stock trading can be either positional or intraday. Without trade plan stock trading becomes gambling with high risk. A company’s stock price reflects investor perception of its ability to earn and grow its profits in the future. Typically, the higher the stock price, the more optimism about the company’s prospects.