Stock trading and share markets are the two most commonly used terms that is associated in the Financial Domain. It is the only sector which employees a million people, both in India and overseas and is responsible for the financial future for many a millions. In most countries it is the stock market that determines its currency value and economy. On a global basis (as of latest updates from reliable sources) the size of the world stock market was estimated at about $36.6 trillion US Dollars. So this just gives you an idea on the amount of money invested at any given point of time. In this article we will discuss on some important facts that one has top follow and understand while investing in stock markets.
People generally get confused with two major terms, 1) Share Market & 2) Stock Exchange. To make things clear they aren’t the same.
Share market is the platform where stock exchanges happen. A Share Market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. A Stock Exchange is a corporation or mutual organization which provides "Stock trading" facilities for stock brokers and traders, to trade stocks and other securities. Securities Traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. The KRA (Key responsibility Areas) of stock exchanges include raising capital for businesses, facilitating company growth, profit sharing & corporate governance amongst others. The oldest stock exchange: i.e “The New York Stock Exchange” originated in 1872. Since then there has been 20 legitimate registered stock exchanges all over the world.
The best way to start of is to open a broking account with a registered stock broker. With the advent of the internet,
Online Share Trading has become one of the most important features for every major stock trading/ broking firm. Online trading has helped improve consumer base. After this is taken care off sign the broker client agreement with your broker. Open an
Online Demat Account with any of the Depository participants registered with NSDL or CDSL. If your broker is also a DP, you can open the DP account with him also. Sign the relevant papers and execute agreement. Trade within your predetermined limits and financial capacity. It is always suggested to trade carefully while dealing in super derivatives. Derivative Trading as the name suggests are the financial contracts which derive their value from the underlying. The underlying may be the security or an index. Thus derivative instruments have no independent value. Currency futures are contracts where two parties agree to do a trade at a future date at the pre determined or agreed price and quantity.
Other then this the firm through which you invest in shares, stocks and bonds must assure you of proper
portfolio management services. If your investment portfolio doesn’t comprise of the correct asset or classes as per market requirements, your investment is bound to go haywire. As of today firms are also providing
Online Mutual Fund transaction. It is wise to seek the assistance of a relationship manager who would guide you through your investment strategies after conducting thorough Equity Research. Last year’s major recession worry saw many stocks crumble and major companies go defunct leaving millions unemployed. This just goes to show the economic weight that any major stock exchange holds. What really matters when you invest in Stock Markets isn’t the tenure or the amount, infact the time of investment is the most important. Hence investing with the most secured and reputed brokers do help.
