1. What is the difference between Stock and Share?
A stock and a share are essentially one and the same. They both represent a part of the capital of a joint stock company. In India it was always called shares whereas in the US they have been referred to as stocks. They essentially mean the same thing.
2. What Instruments Are Traded In The Stock Markets?
The stock market trades equity shares of various listed companies. In addition, the markets also trade other instruments like index futures, index options, stock futures, stock options, VIX futures etc. Both equity and derivative products are traded in stock markets.
3. Where Do I Find Stock Related Information?
There are various sources for finding stock related information like the newspaper, websites, company annual reports etc. Brokerage houses like Tradebulls also provide a plethora of rich stock market content and analytics on the website itself.
4. What Are The Factors That Determine The Price Of The Stock
Price of the stock is normally determined by growth prospects and the profitability of the company. Normally, based on the attractiveness of the stock a P/E ratio is assigned by the market. Stock prices also depend on demand and supply as well as news flows.
5. How Would You Choose Stock For Your Portfolio?
You choose stock by screening the stocks in the market on profitability, risk, valuations etc. Such analytics are available on the Tradebulls website for traders to easily create a portfolio. It is always advisable to check with your RM or advisor before taking portfolio decisions.
6. From Where Do I Buy Stocks?
You can buy stock from the exchange platform provided by your broker. You can either buy stock offline at the branch or by phone or even online on the internet. A much simpler way to buy stocks these days is by downloading the broke app on your mobile phone.
7. When Is The Best Time To Buy/Sell Share And Maximize Profit?
There is nothing like a best time to buy the share because it depends on your trading / investment perspective. Traders must buy when the downside risk is the lowest and investors must buy when the upside potential is highest.
8. What Are Some Of The Orders I Can Place?
As a trader in the market, you can place market orders or limit orders. In a limit order you define a price and the order will only be executed at better than that price. Market orders work better in trending markets while limit orders are better in volatile markets. Then there are also Immediate or Cancel (IOC) orders which are used less frequently. Orders can also be Good-till-Day, Good-till-Date or Good-till-Cancelled.
9. What Happens In Case My Shares Are Short Sold?
Short selling is when you have sold the shares without having delivery in your demat account. If you have short sold shares then you can cover it back the same day. But if you don’t cover by end of day, you need to give delivery. If you are unable to give delivery then the stock goes into auction and the losses via bidding get debited to your account.
10. Can I Trade When Markets Are Shut?
Today most brokers do allow you to place orders when the markets are closed for the convenience of office goers. However, the actual trade will be in a queue and will actually get executed only when trading resumes the next trading day.
11. What Are The Various Types Of The Risks Once I Start Trading?
As a trader, you are faced with a variety of risks. For example, there is the market risk and the price risk. Then there is the risk of news flows. There is also risk that is specific to the company or the industry in which the company operates. Above all, there is the liquidity risk at any point of time in the market.
12. What Is Equity And Why You Should Invest In It?
Investment in equity is nothing but investing in shares and stocks. You become part owner of the company you are investing in. When you invest in equities, you participate in the growth of the company and hence over longer periods of time, equity creates wealth in the best possible way for investors.
13. Where Do I Find Stock-Related Information?
You can rely on a variety of sources for stock related information. You can refer to the pink pages of ET, BS etc. You can also get prices from websites like money control with all news flows. Above all, you also get most of the stock information from your brokers’ trading platform itself along with call to action.
14. What Does The SEBI Do?
Securities & Exchange Board of India (SEBI) is the chief regulator of the capital markets in India. SEBI regulates exchanges, brokers, investment bankers, investors, sub brokers, analysts, distributors, rating agencies, listed companies etc. SEBI ensures that there is no disruption with market integrity and the interests of retail investors are protected.
15. What Are Advances And Declines?
One of the popular metrics for understanding the tone of the market is the Advance/Decline or the A/D ratio. It measures the number of shares that advanced and divides by the number of shares that declined. It gives an idea of whether the market movement is well spread out or concentrated to a few stocks only.