STOCK TRADING
There are different categories of trading in stock market.
The delivery-based trading in stocks. This is long term investment plan of investors to hold stock long to medium term. Many people make money on this way of investments. Investors make the investments hold it for long and gain money on the upward movements in stocks. In this case selection of stocks is more important. The steady growth company stocks need to be selected for this purpose. This mode of investments is more advisable for the persons who wanted to park the money other than in bank deposits.
Intra-day trading in securities. The trading in stock can be made on daily basis with margin amount in the trading account. The open positions need to be closed by closing hours of the stock market. This trading is moderately risky. But we need to select the stock with events, news about the company, results, orders, major expansion and so on. The trading can be made by buy and sell or sell and buy. Positive news about the company need to be utilized by buying stock and sell it and negative news about the company need to be utilized by selling and buying the stock.
There is trading called “futures”. The futures can be on individual stocks or as segment like banking stock – bank nifty futures, Nifty Futures, etc. For example, we can buy or sell the futures of State Bank of India Futures or Bank Nifty Futures. This type of trading has high risk and high returns. These futures have time period of one month – expires of last Thursday of the month.
There is another category of trading in stock market, that options trading. There are two options – call and put options. These options can be on the stock or on the segment of stocks. For example, options can be on Infosys stock or Bank Nifty Options. The call options need to be exercised when there is up word movements in stock or segment and put options need to be exercised when there is down word movements in stocks or segments. The bank and nifty options are weekly basis. That means the expiry date is on every Thursday. But individual stocks options are expiring monthly basis, which expires on last Thursday of the month. This type of trading is very high risk and very high return potential.
There is another method to investment in stock market. That is investments in mutual funds. The mutual funds are managed by the Mutual Fund Company. They take the investments from the public and pool up the funds and invest in growth fund, debt fund and balanced funds. The categories of the funds are decided by the investors and the fund managed by the Mutual Fund Companies. This is type of investments has low risk and high diversity of funds invested. This is advisable for the people who wanted to save money for long period of time and who does not have much knowledge of the market.
The company is licensed as sub-broker with MOTILAL OSWAL. We provide services to customers on their investment decisions to maximize profit with lowest risk. We trade in equities, futures and options, currencies and commodity markets. The whole theme of this services to meet the requirements of customers to maximize the return on investments with lesser risk.
We provide training to customers for day to day trading in stock market in their own. This will enable the customers to understand the market and to gradually build capacity to trade in stock market by using their personal computers. This reduces the dependency on the stock brokers to trade in securities market and also to protect the investments.
We also provide services on Mutual Funds, Bonds and Debt Instruments.
How do I Invest in Stock Market?
The investment in stock markets is subject to market risks. This is not only SEBI initiative on the awareness to investors protection and also is fact that is in the market. The investors in the market have to feel the heat and cool aspects of stock market.
The investors who wanted to create portfolio in the stock market need not bother the risks of market. The investors need to select the good stocks which is performing well in the past and also focus little insight on the future prospects of the company in particular and industry from which operates in general. Giving an example vehicle, which run on fuel would be discontinued in near future and would be replaced with electric vehicles. So, the investors need to focus on stocks which can digest and accommodate the shifting of verticals of business.
There are few retail investors make money by investing in selected stock on day-to-day basis. The investors create portfolio by investing small amount on daily basis. These retail investors make it habit to invest in share market on daily basis. This would result in creation of big portfolio in the long run.
There is concept called diversification of portfolio. The diversification means investing in the stocks of different company operating with different industrial segments. The diversification is mainly required to manage the risk in the stock market. Because even in the falling market there will be up move in few industrial segments. That is to say even overall market is declining some segments of market will lead up move due to relevant market conditions.
This is an advice to small retail investor at the age of 25 to 30 need to start investing in small amount on day-to-day basis. The investment amount may be less than Rs.1000. This habit definitely makes the investor financial freedom in long run. When such investor reached age of 50 there will be good portfolio of investments and will be happy see that made vice decisions.
So, advice for the young people to start investment in small amount day to day basis irrespective of market conditions.
When we come to other side of the investors who has good amount to invest need to consult expert advice from the market professionals. When we go for the lumpsum investment there requires expert professional advice so that the cost of the investment is protected in the long run. This is because when you invest in lumpsum loss due to down trend in the market cannot be mitigated. So, the investors wanted to invest for long term on lumpsum basis need to understand the risk aspects of the market. But I have seen many investors put lumpsum money in the market and never bother on the market conditions and receive the dividend and bonus shares from the company. These kinds of investors parking the money in the stock market and realize dividend and bonus shares.