Stock Trading is a place where buying and selling a securities taking place Securities can be Stock, commodity, bonds etc… Securities are Stored in Depository
An investor is connected to the stock market through the broker. Brokers are governed by SEBI. SEBI is the regulatory authority for the stock market Exchange facilitate the stock trading Exchange and depositories are linked together Trading Account is an intermediary of the Stock Market, Bank Account, and Demat Account through the trading account orders buy/sell is placed.ordered can of Market order, conditional order and limit order Trading vocabulary to buy /sell is long/short position correspondingly Orders are classified into two Time condition and Price Condition.DAY – A Day order, as the name suggests, is an order which is valid for the day on which it is entered. If the order is not matched during the day, the order gets canceled automatically at the end of the trading day.IOC – An Immediate or Cancel (IOC) order allows a Trading Member to buy or sell a security as soon as the order is released into the market, failing which the order will be removed from the market
Price Conditions Limit Price/Order – An order that allows the price to be specified while entering the order into the system.
Market Price/Order – An order to buy or sell securities at the best price obtainable at the time of entering the order.
Stop Loss (SL) Price/Order – The one that allows the Trading Member to place an order which gets activated only when the market price of the relevant security reaches or crosses a threshold price. Until then the order does not enter the market.
The Primary Objective of a trader is to set up a trading plan to have a systematic way of trding.
- : Stock Broker: Stockbrokers are governed by the SEBI. SEBI : Regulatory board for a stock market. Depository : Depository is an administrative body that holds securities of investors in an electronic format. When the trader places the buy/sell order through brokers. The request will be passed to exchange through the broker, after verifying the deposits participant account. The order will be placed in the queue based on the best buying/ Selling Price and executed when it meets the counterparty. The trading will happen from 9.15 AM to 3.30PM. The settlement is expected to happen within T+2 days of time. Bank and Govt won't have any direct impact on trading.
- : Maintenance margin is some fraction—perhaps 75%—of initial margin for a position. Should the balance in your margin account fall below the maintenance margin, your broker will require that you deposit funds or securities sufficient to restore the balance to the initial margin level. Such a demand is called a margin call. The additional deposit is called variation margin. Should you fail to make a variation margin payment, your broker will immediately liquidate some or all of your positions.
- : It will be good for a trader who can gain a money in a short span of time compared to other business provided with Discipline and knowledge.
- : Yes, it is possible to buy stock from BSE and Sell it on NSE, Provided if the stock is in your Depositories. Both NSE and BSE are Stock Exchange I can able to sell/Buy the stock which is listed in it. The limitation is I can't Sell/ Buy a stock Immediately because of the Settlement time There are two types of settlements, On the Spot settlement: Here we exchange the funds immediately and the settlement follows the T+2 pattern. So a transaction occurring on Monday will be settled by Wednesday (by the second working day) Forward Settlement: Simply means both parties have decided the settlement will take place on some future date. Can be T+% or T+9 etc. So after Settlement, only the share comes to Depositories
- : I will be in the waiting counter and placed in a Queue standing at last.
- : Orders, as and when they are received, are first time-stamped and then immediately processed for the potential match. If a match is not found, then the orders are stored in different 'books'. Orders are stored in price-time priority in various books in the following sequence: Best Price Within Price, by time priority. Order Matching Rules The best buy order will match with the best sell order. An order may match partially with another order resulting in multiple trades. For order matching, the best buy order is the one with the highest price and the best sell order is the one with the lowest price. Order condition classified into 2 Time and price Conditions Time condition Order are i) A Day ii) IOC Price Condition order i) Limit Price Order ii) Market Price Order iii) Stop loss Order.
- : Long: Long position is to buy the stocks. long unwinding Selling the stocks to exit the long position Short: Sell the Stocks first (without having stocks in account) and then buy them before the transaction day Short covering is buying back borrowed securities in order to close an open short position.
- : Trading is a business if the return is more than the risk if not trading becomes gambling.
- : Buyer and seller decide the stock price.
- : Positional Trading is to hold a stock for a span of time (Short or Long) must be more than a day. Intraday is Buying or selling a stock on the same day.
- : When a trader predict a stock price may go down. The trader will sell the stock without holding any and purchased the stock before the end of the day to make a profit even from the bearish stock.
- : Trade plan describes the scope and analysis of a particular Securities. The scope defines the risk vs return of particular securities (instrument) Analysis define the time and trend. so the prime object of a trader is a trading plan.
- : Stock Price is zero percentage impact on the company.
- : What is stop loss Market and stop loss Limit Order
- : How Depository Technically connected to the Exchange