Stock Trading

AN INTRODUCTION TO STOCK TRADING

04/07/2023 An Introduction to Stock Trading - Pradeep Tewani

A Few Important TermsShare

Primary Market

Secondary Market

Stock Market

D-Mat

D-Mat Account


Why do we do Share Trading?• Dual Benefits, Better Returnsi)

• Highly Liquid, Extremely Flexibleii)

• Become an Owneriii)

• Keeps you updated with the latest news in corporate worldiv)


Types of InvestorsInstitutional Investors• Foreign Institutional Investors (FIIs)• Domestic Institutional Investors (DIIs)

High Networth Individuals (HNI)

Retail Investors

04/07/2023An Introduction to Stock Trading - Pradeep Tewani


Market IndicesNIFTY SENSEX

Acronym for National Fifty

Benchmark Index of National Stock Exchange

A collection of 50 top companies listed on NSE

Acronym for Sensitive Index

Benchmark Index of Bombay Stock Exchange

A collection of 30 top companies listed on BSE

Other Indices: Nifty Midcap 50, Bank Nifty, etc in NSE and MIDCAP, SMLCAP, BSE 500, etc in BSE


Flow of Transaction

Sell BuyProfit


Short SellingA method useful for Traders


How do I Start Trading?Find out a Stock BrokerOpen a D-Mat and Trading AccountDeposit money (initial margin) in the trading

accountStart trading in your account


How do I choose a Broker?Zero – in on a few good Broking FirmsGo through their cost structure and benefits

they offerIf possible, find out about their existing

clientsWho are their bankers?Analyze the brokers’ past performanceFind out if they offer research and advisory

servicesTry to negotiate on various chargesSee how well learned are the employeesFinally, chose the broker who’s offer is most

beneficial

What do I need to open a D-Mat Account?


i)

•Pan Card

ii)

•Address Proof

iii)

•Bank Account with Cheque Book

iv)

•Passport Size Photos

v)

•& Lots of Autographs

How to Trade?


Call-n-Trade

• Broker calls you to update and advice

• Can place order over the phone

Trade Online

• Use online software or Website

• Stay updated real time

Visiting the Broker

• Visit the broker and sit in front of the terminal

• Good only if you’ve ample time


Factors Affecting Investment Decisions

i)

•Risk Bearing Capacity

ii)

•Diversification

iii)

•Total Return – Income & Growth

iv)

•Time Frame

v)

•Fundamentals of the Company

vi)

•Sometimes, only Intuition

Precautions to be taken while Investing / Trading?

χ Never trust you broker’s advice blindlyχ Never allow your broker to trade without

permissionχ If opting for online trading, learn the

software wellχ Check your contract notes regularlyχ Ask your broker for online back officeχ Be extra careful while “Short Selling”



Career Options in Stock Broking

Dealer

Back Office Executive

Relationship Manager

Business Development Officer

Research Analyst

Manager

Owner of a Stock

Broking Firm


Other Avenues for Investment

Mutual Funds

Unit Linked Insurance Plans

Derivatives Trading

Commodities Trading


Some Study MaterialWebsites of Various Stock broking FirmsNSE Website (www.nseindia.com)BSE Website (www.bseindia.com)NCFM Certification Courses (available on

NSE’s Website)Various Business MagazinesVarious books written by experienced

investors and traders

http://www.nseindia.com/

http://www.nseindia.com/


?ANY QUESTIONS!

Economy & Finance

Stock Trading