Why to Trade in Stock Market
Why Trade in Stock Market?
- You do not need a lot of money to start making money, unlike buying property and paying a monthly mortgage.
- It requires very minimal time to trade – unlike building a conventional business
- It’s ‘fast’ cash and allows for quick liquidation (You can convert it to cash easily, unlike selling a property or a business).
- It’s easy to learn how to make profit from the stock market.
But you need to have your basics clear. Unless you do….you will be wasting your time and losing money. You need to be crystal clear of each and every aspect of Investments, stock options, Stock Trading, Company, Shares, Dividend & Types of Shares, Debentures, Securities, Mutual Funds, IPO, Futures & Options, What does the Share Market consist of? Exchanges, Indices, SEBI, Analysis of Stocks – How to check on what to buy?, Trading Terms (Limit Order, Stop Loss, Put, Call, Booking Profit & Loss, Short & Long), Trading Options – Brokerage Houses etc.
Stock Market structure
- Company collects money (capital) from primary market by Initial Public Offering (IPO)
- Investors, buy those shares by paying offer price
- Company lists their name in a stock exchange, to give investors proper opportunity to buy or sell shares they own.
- A broker, like us, who is a member of stock exchange, can only buy or sell stocks on behalf of their client
- An investor who wants to liquidate his investment can do so by a broker in stock exchange
- A prospective buyer who missed the IPO can buy shares through a broker in stock exchange (if seller is available)
- Entire capital market process is highly regulated by SEBI
What Causes Stock Prices to Change?
- Supply and Demand
- Earnings and Expectations
- Sentiments and Attitudes
- Economic Indicators
- Follow the Leader (volume)
Why Invest in Stocks?
- The return on investments in the market are 3 – 4 times the annual return of inflation, savings and treasury bonds
- You can make good money in the market
- You can loose money too……
How should i Invest?
- As per your financial goals
- As per your risk tolerance capacity
- Diversify – Don’t put all your eggs in one basket!
Bulls & Bears
- Bull Market – the economy is great and stock prices are rising
- Bear Market –the economy is bad and a recession is looming
- When you buy a share of a company you become a shareholder in that company. Shares are also known as Equities. Equities have the potential to increase in value over time. It also provides your portfolio with the growth necessary to reach your long term investment goals. Research studies have proved that the equities have outperformed most other forms of investments in the long term.
- Equities are considered the most challenging and the rewarding, when compared to other investment options.
- Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment.
- However, this does not mean all equity investments would guarantee similar high returns. Equities are high risk investments.
- One needs to study them carefully before investing
Know What & Hows of Equity Market, Equity Trading.
What is an Equity Market?
An equity market is a market where different shares of Equity of a company are issued and traded, either through exchanges or over-the-counter markets by different traders or investor. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential to realize gains based on its future performance.
Securities are issued through IPO in primary market and secondary market is market where issued securities are traded on long term or short term basis. Equity market is base market where actual money in demat is replaced by share when you purchased this.
What is Equity Trading?
- In the equity market, investors bid for stocks by offering a certain price, and sellers ask for a specific price. When these two prices match, a sale occurs. Often, there are many investors bidding on the same stock. When this occurs, the first investor to place the bid is the first to get the stock. When a buyer will pay any price for the stock, he or she is buying at market value; similarly, when a seller will take any price for the stock, he or she is selling at market value.
- Trading in equity can be complex especially when you’re trying to secure your financial well-being. Avail the opportunity of trading in equity with Relitrade bouquet of services including equity trading and more. Relitrade acts as an intermediary, providing with an easy and seamless platform for equity trading in India. Our user-friendly equity trading platform is designed for user convenience.
Where can i Trade Equities?
In the past, equity traders conducted business in-person. Back in the day, you as an investor would call your order into your brokerage firm, at which point the order would flow down to the trading floor. We all remember seeing pictures of men yelling at each other to fill orders while holding small sheets of papers in their hands. There were huge blackboards with people sliding up and down the ladder updating prices with chalk.
Benefits of Equity Trading
- Offers High Return
- Beats Inflation
- Long Term Capital Gains
- Low Brokerage
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Trading and investments in Equities and Commodities are subject to market risk, there is no assurance or guarantee of the returns. Please read the Risk Disclosure Document and Do’s & Dont’s prescribed by the Exchanges carefully before investing.
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