what you need to know for trading in stock market

7/31/2019 What You Need to Know for Trading in Stock Market

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ABHISHEK GHOSH

SMMEEIIT ROPAR



OUTLINE

The Stock Market

Online Trade / DEMAT accountGOLD investment

How Broker’s make money



THE STOCK MARKET

• The stock market is a public entity for thetrading of company stocks at an agreed

price.• Participants in the stock market range

from small individual stock investors tolarge fund traders, who can be basedanywhere in the world. Their orders

usually end up with a professional at astock exchange, who executes the orderof buying or selling.



• Now days the trading process is

computerized and can be performedonline through the internet.

• Actual trades are based on an auctionmarket model where a potential buyer bidsa specific price for a stock and a potential

seller asks a specific price for the stock.When the bid and ask prices match, a sale

takes place, on a first-come-first-servedbasis if there are multiple bidders oraskers at a given price.



Cumulatively the stock market works to

develop the overall economy just the wayany market should.

• This is in accordance with the fifth andsixth principles of economics which state

that market trade can make everyonebetter off.



// after all who doesn’t wants tomake some quick bucks through stockmarket investment //



WANT TO GET STARTED?

1. Get a PAN card

Permanent Account Number (PAN) is unique alphanumericcombination issued to all juristic entities identifiable under theIndian Income Tax Act 1961. It is issued by the Indian Income TaxDepartment under the auspices of the Central Board for DirectTaxes (CBDT) and is almost equivalent to a national identificationnumber. It also serves as an important ID proof.

Possession of a PAN card is mandatoryfor opening a DEMAT account.



2. Open a DEMAT account

The term Demat refers to a dematerialised account forindividuals to trade in listed stocks required for investorsby The Securities Exchange Board of India. In a demat

account, shares and securities are held electronicallyinstead of the investor taking physical possession ofcertificates.

Funds can also be transferred from one demat accountto other. The investor can also rematerialise his assetsas per his needs.

Apply in : Sbi, icici, hdfc, etc.



3. Open an online trading account

This account is required for trading in the stock market.

In India this can be done through companies like-

motilaloswal, indiabulls, sharekhan



After setting up all this, now is the time toinvest. Let’s look at one of the foremostchoice of new investors……



"Gold is the proven, quality, long-term wealth store during a slide into deep crisis - the one which everyone else comes to in

a bit of a panic.

Even if, to begin with, the early buyers are buying gold purely to protect their wealth they still tend to multiply their money,

because they are subconsciously anticipating future demand. The best investments do this."



• Since everyone shows interest in gold for a

backup, the demand never drops and thewhole production of the world is not able to

meet the demand. Thus, prices remainsteady over a considerable time period.

• Gold has been used since ancient times asa tool of trade due to it’s scarcity which

ensures a steady real value.



Gold reserves are also of high economic importance tothe nations of the world.

As Joe Foster, portfolio manager of the New York-basedVan Eck International Gold Fund, explained inSeptember 2010:

“The currencies of all the major countries, including ours,are under severe pressure because of massive

government deficits. The more money that is pumpedinto these economies – the printing of money basically – then the less valuable the currencies become.”

If the return on bonds, equities and realestate is not adequately compensating for risk and

inflation then the demand for gold and other alternativeinvestments such as commodities increases.



Why GOLD?

• Demand from New Gold Investment

Markets (Asia)• Mining output fails to meet gold

investment demand.

• Gold investment vs. falling dollar.

• When inflation looms, gold investment

shines.• Gold Investment: An antidote to complex

debt defaults.



Investment vehicles:

BarscoinsExchange-traded products (ETPs)

Certificates (issued by banks)Accountsinvestment in gold mining companies.

*The whole of the gold in the world ever mined can

be represented by a cube with an edge length of20.2 meters (66 ft).



How Brokers make money?

A broker is a party that arranges

transactions between a buyer and a seller,and gets a commission when the deal isexecuted.

BUT IS THAT ALL……



The broker also makes money through anotherstrategy:

• Frequent dealings in stock markets provide him a soundknowledge of market behaviour and he can anticipatechanges in stock values.

• He may encourage you to buy a large quantity of aparticular stock that is about to loose it’s value. Once youplace your order, instead of buying the shares he will just

notify you that the shares are brought.• As soon as the market value of the share drops, he willuse this information to create panic and warn aboutfurther degradation in the share value. This tactic if

performed aptly will force you to sell the shares.• Now, the broker simply pays you the current degraded

amount of the shares which were never brought and

enjoys the value difference himself.



The size of the world stock market wasestimated at about $36.6 trillion at the start

of October 2008.

So, get started now.

Happy stock trading!!

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DISCLAIMER

Stock market investments are risky. They

don't provide fixed returns and pastperformance doesn't guarantee futureresults. All securities investments entailthe risk of great and sudden financial loss.Returns vary and you may have a gain or

loss when you sell your securities.

THANKS FOR LISTENING!!!

what you need to know for trading in stock market

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