How the stock market works in India?
What is Stock Market
Ways to learn stock market trading in 2020-
Today,I will talk about stock market and its stock market instruments and how does stock market works?You awareness will increase about stock market knowledge for investment .Firstly we should know,What is stock market?How to calculate stock market brokerage?What is stock market index?Most of question in investor mind,when they goes for investment in stock market.
Table of content-
a.)What is Financial Market ?b.)What is Stock Market?
c.)What is Nifty and Sensex?
d.)How to calculate brokerage?
e.)What is price condition?
f.)What is bullish and bearish market?
e.)What is dividend?
f.)factor effective to share price.
g.)What is next?
Q.1)What is Financial Market ?
Ans.Financial Market is market where people trade of assets such as equity ,bond ,currency and derivatives.
Q.2)What is a Stock Market?
Ans.Stock Market is place where share buy or sell.Many larger
companies have their share listed in stock exchange.
Two exchange available in India-
1)Bombay Stock Exchange
2)National Stock Exchange
1)Bombay Stock Exhange-Bse stock exchange established in 1875.This is first stock exchange in country.
2)National Stock Exchange-Nse stock exchange established in 1992.
Q.3)What is Nifty and Sensex?
Ans.Sensex and Nifty are index .Its represent to market fluctuation.
Nifty-Its represent the 50 Indian company.
Sensex-Its represent to Bombay Stock Exchange
Q.4)How to calculate stock brokerage on purchased of delivery stock?Ans.Suppose that any person buy 100 shares of any company purchased at the rate of 100 Rs and his brokerages is 0.30 % .So what he will pay brokerage?
Method for calculation = Share price x Share quantity
= 100 x 100
= 10000 Rs (Turn Over)
hence brokerage will be =10000 x 0.30%
= 30 Rs.
Then he will pay 30 Rs for purchased of 100 shares of company @ 100 rs.
But he will pay also some levies and taxes with brokerage on delivery purchased.
Charges for buying and selling stock in India
brokerage + stamp duty + STT + Sebi transaction charges + GST charges.
1) Stamp duty 0.01 % on 10000 Rs ( Turn Over)
2) Securities transaction tax 0.1 % on 10000 Rs(Turn Over)
3) Sebi transaction charges 0.00325 % On 10000 Rs (Turn Over)
4) GST charges 18 % on Sebi transaction charge value.
These all types charges will be apply,when person will sell shares.
Q.5)How to calculate stock brokerage in intraday side?
Ans.Suppose that person a buy 100 share of any company at rate of 100 Rs and his brokerage is 0.03 % in intraday,So what will be brokerage?
Brokerage Calculation= share quantity x share price
=100 x 100
=10000 Rs (Turn Over)
then brokerage will be = 10000 x 0.03 %
= 3 Rs
Then he will pay 3 Rs for 100 shares of 100 Rs in intraday mode.
But he will pay also some levies and taxes with brokerage on intraday trade.
brokerage + stamp duty + STT + Sebi transaction charges + GST charges.
Q.6)Types of orders in stock market
a.)Limit Order- Its an order to buy or sell a share at specified price of share.
b.)Marker Order-A marker order to buy or sell a share at price available in the current market.
c.)Stop loss Order-A Stop loss order is an order to buy or sell a share goes up or dropped down below a trigger price.
Q.7)What is Bearish meaning?
Ans.Bearish meaning,when market is going up and share price is increasing according market index.
Q.8)What is Bullish meaning?
Ans.Bullish meaning,when market is going down and share price is decreasing according market index.
Factor effective to share price-
1)When you have more buyer than seller for particular company shares,shares price usually rise these shares are in demand.
2)When you have more sellers than buyers for a particular company shares,shares price usually fall because there are more share available.
Q.8)What is Stock Dividend?
Ans.Stock Dividend Definition-Share holder may receive cash flow (dividends) if company boards of director declare that company has performed well and has enough profit to distribute to its shareholders.
Famous Securities investors-
Learning about great investor forum the past provides perspective inspiration and appreciation for the game which is stock market Great investor Warren Buffet or George Soros etc.
Naturally,Searching with google search is another great way to educational material to read.
Q.9)How to Buy shares from different platform?
Ans.Now to place an order as follow-
a)Web Trading Software
b)Terminal Software
c)Mobile trading
d)Call your broker and place the order
Q.10)What is next?
a)How to calculate stock market returns?
b)What is CAGR?
c)What is your Trading style?
d)What is Bonus shares?
e)What is Right issue shares?
a.)How to calculate stock returns?
Ans.Stock Calculator-The return on stock is measured by finding out dividend yield and earning yield as actual yield.
Formula for Dividend yield= Dividend Received/Price of share in the beginning of the period
Another way of finding out return in stock is by finding out earning yield
Formula for Earning yield =Earning or share/Price of share
Example= A stock that is selling for Rs 40 and 4 rs annually or short term profit that an E/P ratio of -
Earning Yield=Earning /Price of share
=4/46
=0.086
=8.69 %
That mean received profit 8.69 % per share.
b.)What is CAGR definition?
Ans.CAGR full form is "Compound Annual Growth Rate"is a business and investing term for the geometric progression ratio the provide a constant rate of return for specific time.Divide the value of a investment at end of the period by its value of its beginning of period.
c.)What is your trading style?
Ans.Trading are two type-
1.)Intraday trading-Intraday trading included with intraday votality and stressful ,need maximum time sit front of computer screen.
2.)Delivery trading/Positional trading-Its included with weekly ,monthly or long term frame line or capture trends in the market.Its less stressful and require minimal screen time.Its trading is game of patience.
d.)What is Bonus share?
Ans.)Bonus share-Bonus share are share distributed by company to its current share holder as fully paid share free of charge.Bonus share give positive sign to the market that the company is committed toward long term growth story.
e.)What is Right issue share ?
Ans.)Right issue are offered to existing share holder in proportion to their existing holding.Right can be bought with at a discounted price with in a stipulated time period.Hope you understand this article,if there is any question related to this article, then you can ask and comment.
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