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Intra day trading - Stock market trading - Motilal oswal

Equity & Options INVEST IN EQUITY & FINANCIAL DERIVATIVES Equity Investing have an advantage on merely saving money in your bank account. To invest in equity<br>

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Intra day trading - Stock market trading - Motilal oswal

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  1. How Does the Stock Market Work?

  2. Introduction: • You're not alone if the prospect of stock market trading makes you nervous. Individuals with little or no experience in stock investing are either terrified by horror stories about the average investor losing half of their portfolio value—for example, in the two bear markets that have already occurred this millennium1—or seduced by "hot tips" that promise huge profits but rarely deliver. It's no surprise, then, that the investment pendulum is considered to swing back and forth between fear and greed.

  3. KEY TAKEAWAYS • Stocks, also known as shares of a company, reflect ownership equity in the company and provide shareholders with voting rights as well as a residual claim on earnings in the form of capital gains and dividends. • Individual and institutional investors join together in stock markets to buy and sell shares in a public setting. These exchanges are now known as electronic markets. • As buyers and sellers submit orders, supply and demand in the market determine share prices. To promote an orderly and fair market, specialists or market makers often maintain order flow and bid-ask spreads.

  4. What is a Stock Exchange? • Stock exchanges are secondary markets where existing stockholders can sell their shares to potential buyers. It's vital to remember that organisations listed on stock exchanges don't buy and sell their own stock on a regular basis (businesses may engage in stock buybacks8 or issue additional shares9, but these aren't day-to-day operations and typically take place outside of an exchange's framework). So, when you buy stock on the stock market, you're not buying it from the company; instead, you're buying it from another shareholder. When you sell your stock, you don't sell it back to the company; instead, you sell it to another investor.

  5. Impact of Online Trading? • The internet has had a huge impact on stock market trading. It has made securities more accessible and practical for the average person. Individuals in India can now readily trade in the stock market via internet trading.Since the introduction of Internet trading, mutual funds have grown in popularity. • Individuals can now immediately access mutual funds and other assets from a huge online pool of alternatives. Investors can now trade more aggressively and speculatively, enhancing their profit potential.

  6. Happy Trading!

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