Basis trading is a financial trading strategy which consists of the purchase of a particular financial instrument or commodity and the sale of its related derivative
After evaluating a stock, decide the prices you’d like to purchase at, so you know whether to make a “market” or “limited” order.
Investors often use stop-loss orders when trading individual stocks to help minimize losses and directly manage their investments with a risk/reward focus. A stop-loss order is a trading trigger placed on a stock that automates the selling of the stock from a portfolio if the stock reaches a specified low.
- : Broker is an agent who represents clients to buy or sell stocks. Exchange apart from being hub of primary and secondary market. Key role in ensuring the stability of the financial markets in India, by attracting foreign investors and protecting Indian investors. SEBI was built by the government of India. Banks provide underwriting services for new stock issues when a company decides to go public and seeks equity funding.
- : All traders are connected to exchange only through certified brokers. And it is brokers responsibility to check that the orders are placed with proper depts in traders’s account. Exchange will take from brokers deposit if any misplaced orders from their client, to solve the settlement with counter party.
- : People can multiply their money in short time, hence people choose stock trading
- : Not possible for intraday. In delivery 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.
- : Even if we quote higher price the exchange will consider that we are ready to pay up to the quoted price and gets the order executed at the current prevailing market price. ex. market price is 550 and quoted 600 - exchange will consider that you are ready to pay up to 600 and order executed at current market price.
- : market order to buy at the current best market price. Limit orders allow you to set the price, and the order may be filled over a period of time. Stop orders allow you to place ceilings on how much you pay for stocks. You sell stock in much the same way that you buy stock. Till Cancel by the investor or trader or until expiration date of the security. Another most frequently used limit order till Date which is valid until the date specified by the investor.
- : long is the buying, short is selling, Long Unwinding is close out position of Long and Short Covering is Close out position of Short
- : We invest money on share trading expecting to get profits. if it gives a profit, it obviously becomes a business. So, share trading is a business not at all gambling subject to risk vs reward. Risk and Reward are Part of Investing. “No pain, no gain.” ... You must weigh the potential reward against the risk of an investment to decide if the “pain is worth the potential gain.” Understanding the relationship between risk and reward is a key piece in building your personal investment philosophy.
- : supply and demand in the market determine stock price.
- : Positional trading refers to holding the shares for day/long time. Intraday trading is purchase and sale of shares with in the market day
- : Selling stocks before you buy them is a practice known as short selling. You borrow shares from a broker or a third party with the hope that the price will fall in the future. If you never close the position and the stock price goes to zero, you will be closed out and credited with your profit. If you never close the position and the stock price keeps going up and up, your potential loss is an unlimited.
- : A systematic method for screening and evaluating stocks, determining the amount of risk that is or should be taken, and formulating short and long-term investment objectives. A successful trading plan will also involve details like the type of trading system to be used. Target and stop loss should be included for every trading.
- : The stock prices do not affect the company. The stock market is quite volatile, rise and falls in the share price won't affect its overall business directly. A zero-sum game is a mathematical representation of a situation in which each participant's gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants