Saturday, February 21, 2009

Basics of the stock market

There are three modes of buying or selling of stocks.

Margin: These are intraday trading of shares. You can either buy the shares first and then sell the same amount of shares or vice versa. This means that at any point of time if the stock market is not flat (no movement) you can earn money if you make the correct decision.

In case you only buy the stock during the normal working hours and dont sell the stock or vice versa then the stock broker would trade the same in the last half hour of trading on your behalf, since you have taken the stock saying you would dispose the stock at the end of the same day.

You can also change the mode of buying the stock from margin to delivery after you buy the shares before the end of the day. This is called conversion to delivery.

The facility of selling the stock first and then buying the same is called short selling. i.e. selling when you are short of those shares.

Delivery: This is the normal mode of trading. Delivery means the share will be bought and converted to demat form. You can sell the share after you get the share in its demat form. Although for the aquiring the share in the demat form takes about 2 days. During this time if you want to sell it then you have use ATST option. On the same day or after you get the share in the demat form you can use delivery to sell it.

ATST / BTST (Aquire/Buy today sell tomorrow): As mentioned earlier actually getting the shares takes 2 days. If you want to sell the share before you get the share in the demat form then you can use this option.

The broker charges for intraday (Margin) would be very less while compared to delivery.

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Market Quotes

Learning about stocks

Key terms

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