During trading the trader places the buy/sell order with the broker’s online trading system. This information is passed on to the exchange through the broker once he confirms the deposit in the traders account. The order is then placed in the queue based on the Bid/Ask price(buying/selling price). When a match is made the order is executed. This whole trading will happen between 9AM to 3.30PM and the settlement happens after 3.30PM. The order will automatically gets cancelled if a match is not made within 9-3.30PM window. The settlement is expected to happen within T+2 days. Depending on the way we approach the market, stock trading can be considered either as business or gambling.
During trading the trader places the buy/sell order with the broker’s online trading system. This information is passed on to the exchange through the broker once he confirms the deposit in the traders account. The order is then placed in the queue based on the Bid/Ask price(buying/selling price). When a match is made the order is executed. This whole trading will happen between 9AM to 3.30PM and the settlement happens after 3.30PM. The order will automatically gets cancelled if a match is not made within 9-3.30PM window. The settlement is expected to happen within T+2 days. Broker-Acts as an agent who represents the trader to place the order with the exchange. Exchange-place where trading happens.SEBI-It regulate the stock exchange. Govt-Govt does not have any role other than appointing SEBI. Bank-Banks help to transfer funds from customers account to brokers account, maintain DEMAT account
Stock exchange will collect caution deposit from brokers. During the settlement process if any of the party(either buyer or seller) fails to make a payment, then the funds already deposited by broker will be utilized by the exchange. In that case, broker has to do the settlement with trader on his own.
You Can Make Money Right Away. While most people use stock market as an investment activity, some use it to earn an income. These individuals buy and sell stocks frequently, getting in when the stock price is low, and selling the shares as they rise.
We can buy stocks from BSE and sell it on NSE and vice versa provided
i.you own the shares in your demote account
ii.the stock is listed in both the exchange.
This is called Arbitrage trade.
Limitation - If you are holding an intraday position then perhaps you can’t do this
Even if we quote a higher price exchange will consider that the buyer is ready to pay ‘UPTO’ the quoted price and the order is executed at the prevailing market price. Ex:Axis bank trading at 2005 and the trader enters the Bid price as 20005,exchange reads as 'Bid price UPTO 20005'. There's a sell order at 2005.6 then the order executes at that price.
An order can be placed online in the stock market using the software provided by the broker using DEMAT account. Login to the account, pick the stock, and enter the type of order(Buy/Sell), number of shares and Ask price /Bid price. Once the details are entered the order will be placed in a queue and when a match is found ,trade is executed.
Types of order- Buy and Sell order
Validity of order - The order will remain valid till 3.30PM on the trading day. If a match is not found the order automatically gets cancelled
Long - Buying a stock for the first time
Short - Selling a stock which you do not own. In Short selling it is believed that the price of the stock would go further down enabling it to be bought back at a lower price to make a profit.
Long unwinding - Close out position of Long i.e. selling the stocks to exit the long position
Short covering- Closing out positions of short ie. buying back stocks to exit the short portion
Depending on the way we approach the market, stock trading can be considered either as business or gambling.
If the stock trading is executed without any analysis or with the risk > rewards, it becomes Gambling. If we trade with proper plan by understanding the risk/reward ratio and execute the trade only if the reward > risk, it becomes Business.
Price of the stock is simply the price at which the buyer and seller agrees to trade. Hence stock price is decided by the buyer and seller.
Every time a stock is sold, exchange records the price at which it changes hands. If a few seconds or later another trade takes place, the price at which that trade is made becomes the new stock price, and so on. Exchange will suspend trading in a stock if the price of the stock is excessively volatile, if there a mismatch in the demand and supply(sellers want to sell and no buyer are available) or if they suspect that insiders are deliberately manipulating the stock price.
Positional trading is buying a stock today and hold more than a day (days, weeks or even months) and sell it when the demand is high
Intraday trading is anything you buy and sell or sell and buy on the same day(before 3.30PM)
If traders sees the Share price going down he can execute the Sell order which he doesn’t own it but by making promise that he will buy those shares before 3.30PM. Shorting only makes money if the stock price goes down. If you're wrong, and the price rises after you placed the sell order, you have to buy it at that price to return the stock to your broker.There is no limit to your loss. If you don’t own the shares during the settlement process you should pay a heavy penalty.
A trading plan defines what needs to done, why, when and how. It involves evaluating the stocks, calculating the risk rewards ratio, stop loss and when to exit.
When followed, a trading plan will help to limit trading mistakes and minimize losses.
Stock price doesn’t affect the aspect of the company as company gets money only during IPO. If the price goes up/down it doesn’t affect the company as it will be for the public who has shares.