Market Timing

Stock Market timings : Pre open trade from 09:00 ~ 09:15 hours | Market Opens at: 09:15 hours and Closes at: 03:30 hours

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TODAY'S POST


Basic Knowledge about Indian Stock Market



What is equity trading?


It is simply buying and selling of equities. However, unlike other commodities, equities are not traded everywhere, and are traded only in special market places called exchanges.





 

         What is an exchange?

An exchange is a mechanism through which buyers and sellers of equities are brought together. These days, this is largely electronic and done with computers. Investors cannot, however, participate directly in the exchange and can participate only through members of the exchange, popularly referred to as brokers.
  

How does the exchange works?

An exchange has per-specified timings. During that time, all the members of the exchange link up to a central computer through their remote terminals. The members then place bids to buy equities, or make offers to sell equities. Other members who can match the bid or the offer confirm their acceptance, and the transaction is completed. Members of stock exchanges place bids and offers on behalf of their clients, who are the investors.




      Why are brokers required?

Investing in equities is quite risky. The broker is a professional, who knows the risk and can advise the investor accordingly. Secondly, an exchange will become an unwieldy mechanism if the entire universe of investors were to go and start making bids and offers. Reducing the number of individuals is a way of keeping control. Third, equity trading can also be abused. To prevent these abuses, exchanges as well as the Government has a number of regulations in place. Restricting activity to the members of the exchange will enable the regulations to be followed, preventing abuse of the system.



How are shares traded?


Like in any other buying or selling, once the broker confirms the trade, if you are buying the share, you pay the broker the value of the shares and take delivery of the shares. If you are selling the shares, you hand over the equities to the broker and the broker will pay you for your shares.



When settlement does happen?

Each exchange has its own settlement period within which the entire process of delivery and purchase should be completed. Typically, the process is completed in a week to ten days time.



         What is an index?

An index is an indicator of how the stock market is doing on the whole. An index comprises a basket of stocks. The collective value of these stocks on a given date is taken and given a score of 100. From that day onwards, the value of these stocks is tracked and its score relative to 100 is computed.


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