Today, it is easy to buy stock by simply charging your phone or transferring money. You will need an internet connection, a bank account, and some money.
The stock market scenario might scare you if you’ve seen Guru, a movie in which Abhishek was the lead role. It was based on Dhirubhai Ambani’s life. It was 50-60 years ago. No physical appearance or paperwork is required now. In just 2 minutes, you can purchase stock from your computer in your living room. How? This is what I’m going to show you. How do buy stock on the stock market for the next 5-10 minutes, just be there with me.
Although buying shares online is easy, it’s not difficult. First, you must find the right stock. To find the right stock, there are some basic steps you need to do.
WHAT IS THE STOCK MARKET
Stock markets are public markets that allow for the purchase, selling, or issuing of stocks. They can trade on a stock market or over-the-counter. Stocks are also called equities. The stock market allows investors to buy and sell ownership of investable assets. A functioning stock market is essential for economic development because it allows companies to access capital quickly.
WHAT IS THE PURPOSE OF THE STOCK MARKET
Two important functions serve the stock market. The stock market serves two important purposes. First, it provides capital for companies so they can expand and fund their businesses. A company can issue one million shares of stock at $10 per share to raise $10 million in capital to expand its business. The company saves money by offering stock shares rather than borrowing capital for expansion.
The secondary purpose of the stock market is to allow investors (those who buy stocks) to participate in the profits of publicly traded companies. Stock buying can bring in two types of profits. Stocks that pay regular dividends can pay a fixed amount per stock. Investors can also make a profit by buying stock and selling it for a profit when the stock price rises above their purchase price. If an investor purchases a share of stock in a company at $10 per share and then the stock price rises to $15 per share, they can make a 50% profit by selling their shares.
BASICS OF STOCK MARKET
Now let’s understand some basics of the stock market that a person needs to understand before starting a trade in the stock market.
- WHAT IS EQUITY SHARE
Equity shares are certificates that are issued to investors who invest in a company? These certificates are issued when a company is publicly listed. People can then start stock exchange trading with their equity shares. A company’s shares become available on a stock exchange when it is publicly listed. Stock exchanges that offer equity shares are NSE and BSE. - WHAT IS A JOINT-STOCK COMPANY
After the venture capital funding has been exhausted and the company reaches a certain size it could set its sights on becoming India’s largest company. The company then goes to the public for funding. As little as 10 rupees can be bought to purchase a part of the company. If the company has invested Rs 5 crore and you have invested 10 Rupees, you will own the proportionate share of the company (2e-7) %. Every owner gets a dividend whenever the company makes a profit. - Primary and Secondary Market
There are two types of markets on the stock exchange. The primary market is where shares of companies that are newly listed can be bought directly through the stock exchange. However, the secondary market, which may allow for further trading, is larger and more profitable. You can trade in shares that have already been sold. The new owners may allow you to bid on the shares by quoting a greater amount, such as Rs. 20 for the Rs.10 shares. The offer may be accepted by any new owner and the investor can exit the investment.
DO AND DON’T OF TRADING IN THE STOCK MARKET
Here are some dos and don’ts that are necessary for someone to understand? Through this, a person can get an easy idea about what is his limit and what he can definitely do while trading in the stock market.
Dos of stock market
- Always deal with market intermediaries that are registered with SEBI/stock exchanges.
- You must ensure that all forms or documents required for registration as a Client are completed.
- Unambiguous instructions should be given to your broker/agent/depository participant.
- Always insist on contract documents from your broker. If you have any doubts about the transaction, check the Base website to verify its authenticity.
- Never settle your dues via the market intermediaries and normal banking channels
- As all investments involve risk, you should choose trading/investment strategies that are in line with your risk-bearing ability.
- Take the time to read and comprehend the Risk Disclosure Document.
- Stocks that experience a sudden rise in trading activity or price, especially low-priced stocks, should be avoided
- There is no guarantee of returns from investing in the stock market
- Important documents should be sent by reliable means (preferably registered mail) to ensure delivery
- Before you sell, ensure that you have securities in your possession.
- Keep track of all your posts, both those you have sent and those that are yet to be received.
- Indicate clearly whether you prefer to transact in Demat or physical mode.
Don’ts of stock market
- Do not deal with brokers/sub-brokers who isn’t registered or any other unregistered intermediaries.
- Do not sign any documents with an intermediary without understanding the terms and conditions.
- Investor complaints are addressed by the Exchange through arbitration and IGRC mechanisms, which are quasi-judicial. If the complaint is filed at the Regional Investor Service Center, the IGRC will consider the time taken to resolve the complaint.
- Do not rely on rumors, tips or guarantees of returns.
- Do not be misled by companies that show approvals/registrations from Government agencies. These approvals may be for another purpose and not the securities you are purchasing.
- Do not blindly follow corporate developments in media reports
- Do not copy investment decisions made by others
- Do not forgo the right to obtain all documentation of transactions from anyone you know.
- Do not be misled by promises of repayment of your investment via post-dated checks
HOW TO OPEN A DEMAT ACCOUNT AND START TRADING ONLINE
First and foremost, you need to find a good brokerage partner. You should verify reviews before you make a decision. Server crashes should not occur during peak trading hours. You should verify that the broker is able and able to receive all necessary information promptly. The broker can help you. Open a Demat Account A Trading account. The trading account allows you to buy and sell stocks in the stock exchange, while the Demat account stores your purchased shares digitally.
Before opening an account with a broker, you need to verify the brokerage fees. The broker charges a brokerage fee whenever a customer places an order on the market. The brokerage fee can be either a flat fee or a percentage.
Next, open a Demat and Trading Account with the broker. To open an account, you will need to fill out an online form. You will need to provide basic information such as your PAN number and bank details. You will need to design the document that will be sent to your registered mobile number at the end. After you apply, an account is opened and you will be sent the login credentials.
Once you have received your login credentials, log in to your account to explore the trading platform and place trades.
Within 24 hours of trades being initiated by you, the broker must release a contract notice. The contract note will include a summary of all trades made by you. It is advisable to review the contract note each day to ensure that there are no discrepancies.
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