Stock trading happens in Exchange where the buyers and sellers will meet. The buyers/sellers will order a buy/sell order in exchange via Broker. Trade should be done with calculated risk and return in order to make it as a Business

  • : The Buyer/Seller will contact the Broker and this Broker will place the order in the Exchange. Broker will help the customers about the current market analysis for the required company share and guide them. Exchange will allow companies to raise funds by providing them the pool of investors. SEBI is regulator to ensure the trading is happening transparently. Banks may not play a direct role in Exchange.
  • : Previously Exchange used to provide Share Certificate to ensure counter party risk. But this had some limitations, so they provide us a DEMAT account. It's like a locker and it's not in physical format, so the risk are very low
  • : People wants to multiply their income in a short term.
  • : Yes. But there are some restrictions. The shares from the company you're buying from BSE should be listed in NSE if you want to sell it.
  • : You're order will be placed in the exchange and it's been immediately executed as the price you're quoting is high compared to other buyers
  • : You can contact the Broker and ask them to do Buy/Sell order in the Exchange.
  • : If the price is expected to go up, we tends to go Long position. If prices expected to go low, we tends to go Short position.. Long unwinding happens when we start selling the shares in long position. Short covering happens when we start buying the shares in Short position
  • : Anything done with calculated risk and returns is called Business. Anything done by forecasting the future is called Gambling
  • : Demand and Supply will decide the Stock price. If Demand is large, the price tends to go up and if Supply is large, the price tends to reduce
  • : Any trading which happens more than a day is called positional trading. And anything which happens with in a day is Intraday trading
  • : If a trader analysed the market and found that, in future, the price of the share will reduce. He tends to sell the stock before he buys it. If the price went to high, the trader will face loss
  • : Trade with expected risk and returns. If you trade, upto how much you can loss is called stop loss. Trade plan is essential otherwise you're doing Gambling instead of Business
  • : No, stock price will never affect the monetary aspects of the company. Stock price only affects the buyers and sellers in the market, the company has no role in that price
  • : Role of Banks/ Government in stock market
  • : Counter party risk with any example
1 Comment
  1. Naresh 3 years ago

    Your Question 1 :: Role of Banks/ Government in stock market
    Governments generally don’t like to take an active role in the securities market. However, there are methods and policies by which the government’s actions may have an indirect influence on the market. The Ministry of Finance (MoF), the Securities & Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) are the three regulatory authorities governing Indian capital markets.

    Your Question 2 :: Counter party risk
    Counter party risks are ensured with the help of Stock Brokers who acts as an intermediate between Exchange Board and the Trader.

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