Trading can be defined as buying and selling of goods and commodities and buyers or sellers have to pay compensation for these goods and commodities. If you are new to the trading market then first planning and knowledge about the share market (rise and fall) will help you to earn a good profit from the trading market. People should be aware of when to purchase-sell shares and when to hold them.
These are the basic requirements that you have to fulfill before starting any trading market in India:
- Create a market trading account and a Demat account by clicking here.
- During the creation of account, person has to fulfill all the documentation work with valid and verified documents. Many apps offers online documentation and verification.
- Link the created account to your bank for the debits and credits.
- You have to select the investment broker, while selecting make sure that the broker should be registered with Security and Exchange Board of India (SEBI).
- Mark the Risk Tolerance Limit.
- Start doing investments.
- In the beginning it is suggested to invest in product having low risk.
- When you have a good knowledge and experience of trading may go for high risk products.
Trading Time– In India, the trading time is 9:15 AM to 3:30 PM from Monday to Friday, the trading market is closed during weekends and holidays. No transactions take place after 3:30 PM. The closing price is calculated from 3:30 PM to 3:40 PM and is hence known as closing price calculation session time. From 3:40 PM to 4:00 PM known as post-closed session. During this time, you can buy/sell shares at closing prices. If someone is lucky then their shares will be confirmed at closing prices.
The two basic methods of exchange are:
1. Electronically Exchange– Nasdaq trade stocks are completely electronic. It comprises a large network of computer systems. Most of the institutional traders used this method for trading in mutual funds. It is very fast compared to the floor exchange as the trader gets instant confirmation for their trade. It is not completely individual-based, in this also brokers are required to access the system through which trading is going on.
2. Floor Exchange– NYSE (New York Stock Exchange) uses the method of Floor Exchange Market. There are some basic steps that you have to follow in this method:
- Hire a broker, it the broker only who buys shares for you.
- Broker is having a well-organized team so when you ask the clerk to find the trader from whom the shares can be purchased.
- Clerk is aware about the market traders (which market trader works in which market stock).
- After finalizing the prices clerk revert back to the broker and broker will give you the complete details of the trader.
Main Stock Exchanges of India are:
1. NSE (National Stock Exchange)– It is among the biggest stock exchanges in India. It is a global stock exchange and a fully electronic stock exchange avoiding the use of paperwork. About 1600 companies are listed in this and it has a good volume of traders and investors. NIFTY gives the top 50 stock index. Trading is done through debts, equity, and currencies.
2. BSE (Bombay Stock Exchange)– It is the biggest stock market in India and ranked at 10th position in the global stock exchange. It had adopted the paperwork at the beginning but now it is fully electronic. 5000 companies are listed in this. SENSEX gives the top 30 stock index. Debts, currency, and mutual funds are used in trading.
3. SEBI– SEBI is the Securities and Exchange Board of India, founded on 12 April 1992. This is the statutory regulatory body that is responsible for regulating and investigate the Indian capital market in a systematic manner. This also helps to grow, promote and develop the capital markets of India. SEBI headquarter is in Mumbai.
- SEBI has the power of regulating and approving the by-laws of the stock exchange.
- SEBI became empowered to inspect the books and records of financial intermediaries (stock exchange, commercial bank, stockbroker, investment banks, etc.)
- It could constrain companies from getting listed on any stock exchange.
- It can handle stocks broker registrations.
Case study– Scam 1992, India’s biggest stock market scam by Harshad Mehta. He used the loopholes of the banking system of India and scammed over 1000 crore. This Scam caused the law system of the stock market exchange. So, This impact causes huge loss of inverters, affected families, and impact security and 1 over lakh crore capitalization. This scam was investigated and Exposed through Ms. Suchita Dalal on 23rd April 1992 through Times of India.