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STOCKEXCHANGE EASY WAY TO EARN MONEY, EASY WAY TO LOOSE MONEY Bonaz capital
WHAT IS STOCK EXCHANGE? WHAT IS STOCK EXCHANGE? Definition of Stock Exchange : The securities regulation act of 1956 defined stock exchange as “an association , organization , or a individual which is established for for the purpose of assisting , regulating , and controlling business in buying ,selling and dealing in securities.” Meaning : This comes under treasury sector ,which provides service to stock brokers & traders to trade stocks ,bonds and securities. Stock exchanges helps the companies to raise their fund. Therefore the companies needs to list themselves in the Stock Exchange and the shares will be issued which is known as equity or a ordinary share and these shareholders are the real owners of the company the Board Of Directors of the Company are elected out of these Equity Shareholders only.
FEATURES OF STOCK EXCHANGE FEATURES OF STOCK EXCHANGE ✓ ✓ ✓ It is an organized market It is a securities market It is an important constituent of capital market i.e., market for long- term finance It is a voluntary association of persons desirous of dealing in securities Stock exchange is a voluntary association, its membership is not open to everybody In a stock exchange, only the members can deal in i.e., buy & sell securities The members of a stock exchange can buy and sell securities either as brokers for & on behalf of their clients The dealings in a stock exchange are under certain accepted code of conduct i.e., rules and regulations ✓ ✓ ✓ ✓ ✓
IMPORTANT FUNCTION OF STOCK EXCHANGE IMPORTANT FUNCTION OF STOCK EXCHANGE ✓ Provide central and convenient meeting places for sellers and buyer of securities Increase the marketability and liquidity of securities Contribute to stability of prices of securities Equalization of price of securities Smoothen price movement Help the investors to know the worth of their holdings Promote the habit of saving and investment Help capital formation Help companies and government to raise funds from the investors Provide forecasting service ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
HISTORY OF STOCK EXCHANGE The stock exchange was established by “East India company” in 18thcentury . In India it was established in 1850 with 22 stock brokers opposite to town hall Bombay .This stock exchange is known as oldest stock exchange of Asia.
Initial members who are still running their business in stock exchange are ✓D.S.Prabhudas &company ✓Jamnadas Morarjee ✓Champak lal Devidas ✓Brymohan Laxminarayan
BROKER AND JOBBER ✓BROKER: He is one acts as a intermidiary on behalf of others. A broker in a stock exchange ,is a commission agent who transacts business in securities on behalf of non members. ✓JOBBER: He is not allowed to deal with the public directly .He deals with brokers who are engaged with the investors . Thus, the securities is bought by the jobber from members and sells to members who are operating on the stock exchange as broker.
DIFFERENCES BETWEEN A JOBBER AND A BROKER DIFFERENCES BETWEEN A JOBBER AND A BROKER JOBBER JOBBER BROKER BROKER ✓ A jobber is an independent dealer in securities, purchasing or selling securities on his own account A jobber deals only with the brokers ,does not deal with the general public A jobber earns profit from his operations i.e., buying and selling activities Each jobber specializes in certain group of securities ✓ A broker deals with the jobber on behalf of his clients. in other words, a broker is a middleman between a jobber and clients A broker is merely an agent, buying or selling securities on behalf of his clients ✓ A broker gets only commission for his dealings ✓ The broker deals in all types of securities ✓ ✓ ✓ ✓
SPECULATION AND SPECULATOR ✓SPECULATION : It is the transaction of members to buy or sell securities on stock exchange with a view to make profits to anticipated raise or fall in price of securities. ✓SPECULATOR : The dealer in stock exchange who indulge in speculation are called speculator . They do not take delivery of securities purchased or sold by them , but only pay or rescue the difference between the purchase price and sale price . The different types of speculators are ❖BULL ❖BEAR ❖STAG ❖LAME DUCK
❖BULL {TEJIWALA} He is speculator who expects the future raise in price of securities he buys the securities to sell them at future date at the higher price. He is called as bull because his activities resembles as a bull , as the bull tends to throw its victims up in the air through its horns. In simple the bull speculator tries to raise the price of securities by placing a big purchase orders.
❖BEAR {MANDIWALA} He is speculator who expects future fall in prices , he does an agreement to sell securities at future date at the present market rate . He is called as bear because his altitude resembles with bear , as the bear tends to stamp its victims down to earth through its paws . In simple the bear speculator forces of prices of securities to fall through his activities.
❖STAG {DEER} He operates in new issue of market . He is just like a bull speculator . He applies large number of shares in the issue market only by paying , application money , allotment money. He is not a genuine investor because , he sells the alloted securities at the premium and makes profit. In simple he is cautious in his dealings . He creates an artificial rise in prices of new shares and makes profits.
❖LAME DUCK He is speculator when the bear operator finds it difficult to deliver the securities to the consumer on a particular day as agreed upon , he struggles as a lame duck in fullfilling his commitment . This happens when the prices do not fall as expected by the bear and the other party is not willing to postpone the settlement to the next period.
Largest stock exchanges IN THE WORLD IN THE WORLD ✓ LONDON STOCK EXCHANGE ✓ NEW YORK STOCK EXCHANGE ✓ SHANHAI STOCK EXCHANGE ✓ AUSTRALIA STOCK EXCHANGE ✓ TOKYO STOCK EXCHANGE ✓ HONG KONG STOCK EXCHANGE ✓ TORONTO STOCK EXCHANGE ✓ DEUTSCHE BORSE ✓ BM&F BOVESPA ✓ NASDAQ OMX STOCK EXCHANGE IN INDIA IN INDIA ✓ NATIONAL STOCK EXCHANGE ✓ BOMBAY STOCK EXCHANGE ✓ CALCUTTA STOCK EXCHANGE ✓ COCHIN STOCK EXCHANGE ✓ MULTI COMMODITY EXCHANGE ✓ DERIVATIVES EXCHANGE ✓ OTC EXCHANGE ✓ PUNE STOCK EXCHANGE ✓ INTERCONNECTS EXCHANGE
LONDON STOCK EXCHANGE It was the first stock exchange established by east India company in 18thcentury in London. The top gainer of LONDON STOCK EXCHANGE is “Blue chip shares”.
BOMBAY STOCK EXCHANGE It is oldest and first stock exchange of India established in the year 1875. First it was started under baniyan tree opposite to town hall of Bombay over 22 stock brokers. The top gainer in BSE is 100 companies in that GMR infra is first
NATIONAL STOCK NATIONAL STOCK EXCHANGE OF INDIA(NSE EXCHANGE OF INDIA(NSE OR NSEI OR NSEI) The NSE of India is the leading stock exchange of India, covering 370 cities and towns in the country. It was established in1994 as a TAX company. It was established by 21 leading financial institutions and banks like the IDBI,ICICI,IFCI,LIC,SBI,etc. Features of NSEI ✓Nation wide coverage i.e., investors from all over country ✓Ringless i.e., it has no ring or trading floor ✓Screen-based trading i.e., trading in this stock exchange is done electronically. ✓Transparency,i.e.,the use of computer screen for trading makes the dealings in securities transparent. ✓Professionalization in trading, i.e., it brings professionalism in its functions
THE- -COUNTER EXCHANGE COUNTER EXCHANGE OF INDIA(OTCEI OF INDIA(OTCEI) The OTCEI is a national,ringless and computerized stock exchange. It was established in october,1990.it started its operation in september,1992. OVER OVER- -THE Features of OTCEI 1. 2. It is a nation-wide stock exchange. Its operational areas cover entire India. It is a ringless stock exchange. The trading ring(i.e., trading place)commonly found in a traditional stock exchange is not found in the OTCEI. It is a computerized stock exchange Advantages of OTCEI It helps the investors to have easy and direct access to the stock exchange It helps investors to get fair prices for their securities It provide safety to the investors To provide computerized trading system To provide investors a convenient,effcient and transparent mode of investment 3. 1. 2. 3. 4. 5.
SECURITIES AND EXCHANGE BOARD OF INDIA(SEBI) The SEBI was constituted on 12thApril,1988 under a resolution of the Government of India. On 31st january,1992,it was made a statutory body by the Securities and Exchange board of India Act,1992. The Companies (Amendment) Act,2000 has given certain powers to SEBI as regards the issues and transfer of securities and non-payment of dividend Function Of SEBI ✓Regulating the business in stock exchange and any other securities markets. ✓Promoting and regulating self-regulatory organization. ✓Registering and regulating the work of collective investment scheme,incluing mutual funds. ✓Prohibiting fraudulent and unfair trade practices relating to securities market. ✓Promoting education, and training of intermediaries of securities market
Power of SEBI ✓Power to approve the bye-laws of stock exchange ✓Power to inspect the books of accounts ✓Power to grant license to any person for the purpose of dealing in certain areas. ✓Power to delegate powers exercisable by it. ✓Power to try directly the foliation of certain provision of the company Act
How to see the value of shares in stock exchange SENSEX is an indicator to checkout in BSE NIFTY is an indicator to checkout in NSE
Latest news of BSE and NSE Most profitable company in BSE is GMR Infra Most profitable company in NSE will be RELIANCE and ICICI During last three months nearly only 26% of profit is earned by our stock exchanges the working hours will be From 9:30 to 3:30 from Monday to Friday
The Daily graph of the companies will be showed in following manner
How stock exchanges get money They get their money by listing fees paid by the corporation to have their company traded
HOW TO DEAL AND INVEST IN STOCK EXCHANGE In order to deal with a securities one as to have an account called Demat a/c or Trading a/c. It is just like a bank account. Same procedure of opening the bank account is followed to open the a/c. But all the banks does not give this facility of opening the account , only few banks provide this facility. After demat a/c or Trading a/s is opened then the securities is bought and sold. The banks which gives facility of demat a/c in India is ✓ ICICI Bank ✓ Citi Bank ✓ Bank of Baroda
HAPPY INVESTMENT WITH LOTS OF PROFITS END ************
