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Securities and Exchange Board of India (SEBI)

The Securities and Exchange Board of India declares in their mission statement that their job is to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Basically, this translates into the Securities and Exchange Board of India maintaining the interests of investors and investment opportunities in order for them to remain fair, transparent and fiscal responsibility on the part of traders and companies alike. It is important for the board that overlooks the management of the Securities and Exchange Board of India remain free from any conflicts of interest and remains impartial in their decision making process. This protects both traders and companies from any undue liability thrust upon them from the board members allegiance to any specific individual or company.

SEBI The Security and Exchange Board of India was created by the government of India to help regulate share trading practices and ensure that individuals and companies who exchange securities are covered by laws that protect them. It also promotes fair trading practices within the industry and investigates claims made that are related to share trading and securities investment. It is also responsible for enforcing penalties imposed and pushing legislation that supports reform in the share trading and securities industry.

Since its inception in 1992 the Securities and Exchange Board of India has ensure that the industry has been protected by illegal investment and insider trading. It has ensured that the stock markets that operate within India provide their clientele with a transparent method of overlooking and undertaking business transactions for the benefit of individuals and companies. It is also responsible for ensuring trade is conducted fairly and in a mutually beneficial faction for both parties who undertake a securities based transaction. It is the first line and the last line in regards to the protection of those involved with securities exchange transactions in India.

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National Stock Exchange (NSE)

National Stock Exchange The National Stock Exchange (of India) is believed to be the biggest stock exchange in India – in relevance to the volume of trades and its daily turnover. It is situated in Mumbai, India. The National Stock exchange is owned by an array of financial institutions. Despite this; it is a commercial entity unto itself. It is considered the third biggest stock exchange in the world and often believed to be the second fastest growing stock exchange in the world due to its large volume of trades. It is one of two major stock exchanges in India. Whilst it is not as old as the Bombay Stock Exchange, it rivals it and even surpasses it in terms of how many trades it does.

The National Stock Exchange has been the source of many innovations in the field of electronic stock exchange methodologies. It has also been responsible for offering certain equity bonuses to its traders and partners. Because of its close ties to the finance sector in India it enjoys a large amount of industry trust and interest from international investors. This is no small feat considering the National Stock Exchange has only been incorporated for less than twenty years. It was incorporated in 1992 and it wasn’t until 1993 that it was recognised as a stock exchange. They did not have a business plan until after the stock exchange was actually recognised as what it was.

The National Stock Exchange is responsible for ensuring that stocks, bonds and financial equity can be traded in a transparent way. It is also responsible (along with the Bombay Stock Exchange) for the vast majority of share transactions in India as they apply nationally and internationally. It offers electronic share trading systems that were established in the year 2000 and enjoys a broad range of customers that stretch globally.

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Intraday Share Trading

Intraday Share Trading Intraday trading is a share trading methodology that is centred on buying a share and selling it in the same day (akin to day trading). There is much more too it and it can be quite complicated ground. If you are new to the share trading scene you may want to consider starting out with an easier method of trading such as the delivery based method of stock trading. Essentially, an intraday trader will do their best to leverage what they can borrow on their securities by loaning the shares then selling them on for a profit. You are normally required to have an account with the brokerage or trade specialist you are registered through and a certain amount of capital in the account before being allowed to use this method of trading.

As a rule, you can’t keep the full amount you are entitled to loan any longer than the full day. You can keep approximately fifty percent of your initial investment tied up by the loan. This gives you a little room to strategise in the event the shares that you have borrowed on have not reached the potential you first expected them to reach during the day (in fact it is dangerous territory because you may have lost money on the initial loan if the shares drop any lower in price). You can sell fifty percent of those tied up by the loan and hope that the shares gain a few points overnight. It can be pretty risky. However, with the right risk management techniques it can pay off quickly and relatively risk free.

Whilst this form of trading is not really recommended to people who are new to the industry – it is worth learning all you can about before you attempt using the stock market. It is nice to know your options when you start becoming proficient at other methods of stock trading.

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Initial Public Offer (IPO)

When a company wishes to put itself up for public trading it will start by setting a price and putting itself up for share trading with an initial public offer. An initial public offer can be a pretty big gamble on the part of the investor. It is difficult to determine whether the company will lose points off of the price it has set in its initial public offer. The future of the stock itself is uncertain because there is no history to gauge how well the stock will perform. Because many companies are going through a period of transition when putting their company on the stock exchange it is hard to say whether or not the transition will result in increased profitability for the company (meaning stocks are likely to go up) or whether it will grind the company into the ground.

Initial Public Offer A good way to gauge whether the company whom you wish to invest in is likely to remain profitable and become a good investment is to check their track record. If the company is well established with many customers then you can probably be assured that the company is likely to remain profitable in the long term. However, if the company has become profitable from a passing trend that may soon fall out of fashion (i.e. the company that created the shoe known as ‘crocs’) then you should not invest in them. It is important to do some research after a company has released their initial public offer and their intention to become a publicly listed.

Whilst it might be risky to invest in a company after they have released their initial public offer – if the company is something that is likely to have long term profitability it might be worth buying a few shares. Think of Google. If you bought shared whilst they made their initial public offering you would be sitting on shares that have increased their value by one hundred fold by now.

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Delivery Based Share Trading

Delivery Based Share TradingDelivery based share trading is the best way to become accustomed to using the stock exchange in order to create profit. It involves buying shares and selling them only when the shares are received into the buyers dematerialised account (demat account). A demat account is required by Indian law (issued and regulated by the Securities Exchange Board of India) for Indian investors who wish to trade on the stock and securities market. A demat account is an electronic account which records ownership of any shares owned by the investor. It takes the place of a paper based account that is generally given as a set of certificates to denote ownership of a specific number of shares from a specific company.

Delivery based share trading differs from day trading in that you must have a record of ownership regarding the shares before being able to sell them. This is why it is an excellent starting point for investors who are new to share trading. It gives the buyer a chance to think about when and why they should sell their shares. Although the transfer of ownership of shares is almost instantaneous it gives the buyer a little more room for error. It is also a cheaper option if the buyer uses a demat account because they do not have to pay a stamp duty on the transfer of any shares they purchase (an advantage of the instant electronic methodology of share trading).

Because the delivery based share trading system will only allow you to sell shares you have verified as belonging to you, it can greatly reduce theft, fraud and poor decisions. Because the investment is sent directly to the buyers account, the speed at which you want to sell your shares is not a lot more time consuming than the methods that a regular day trading system works.

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Online Share Trading

Online Share TradingShare trading has moved on to the online platform and there are several brokerages that give you the option of trading online. There are several online share trading web sites that allow you to create an account and trade in stocks as well as various other securities. Some of the web sites that offer you trade online are given below.

ICICI Direct is an online portal that allows you to trade on the internet. On the internet site www.icicidirect.com you can log on, create an account and begin trading. This online brokerage provides a lot of help to all investors and traders. It keeps updating the changes in the National Stock exchange as well as the Bombay Stock exchange. These fluctuations in the Sensex are depicted in a graphical pattern so as to make it simpler for the viewers to understand.

The latest news, events and happenings on the business front are updated on the web site and hence investors can go through them before they go about trading. The live market news is also provided on the site.

Online Share TradingAngel broking: The online brokerage provides online share trading while also offering free stock broking tips as well as news which may impact the market or the stocks. At the end of the day, after the closure of the market, the top gainers of the Bombay stock exchange as well as the national stock exchange are listed and so are the biggest losers that are listed. The most active stocks by value are also listed on the share trading web site. The web site for angel broking is http://www.angelbroking.com/.

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Share Trading Account

Share Trading AccountIn order to begin share trading you need to first have an account for the same. Thus you will have to open a demat account or a share trading account to begin share trading. The demat account can be opened up by the brokerage that you are going to use as they will guide you and help you in the entire share trading account opening procedure. But before you begin trading you need to have a PAN card as the PAN card number will be necessary to open a share trading account. If you do not have a PAN card you need not worry you can apply and get a PAN card. After filling up the application form it normally takes about 10-14 days for the PAN card application to get processed after which you get your PAN card no. You can visit the following web site in order to get your PAN card issued https://tin.tin.nsdl.com/pan/index.html

Once your share trading account is open you can trade in any trading instrument that you want to provided it is listed. Only the person on whose name the share trading account is can trade through it or if it is a joint account or there are other authorized members who have been allowed to use the count then they could use your share trading account. Having a Share Trading Accountshare trading account is necessary for share trading ro you could trade through any of your family members share trading accounts if you have the permission to do so. But since opening a share trading account does not take too long it is advisable to get one made in your name.

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Day Trading

Day TradingDay trading has emerged as a new form of trading amongst share traders. As the name suggests day trading refers to the trading of shares with in a trading day. A trading day refers to the time period for which the trading window or the market is open during the day which in India is generally from 9.55am to 3.55pm.

The traders who practise day trading are called day traders. The common practise followed by retail investors and traders is to buy their preferred stocks at low prices and then sell them off when they think that the share price has increased and they are making substantial profits. But the problem here is that you can never be sure of how the market is going to behave and hence day traders are able to minimise their risks. The principle that the day traders follow is to exit the market before the market closes. In this manner they are able to minimise their risks and stay away from the market turbulations.

Day TradingBut sometimes day trading can be risky but can provide high returns. Some day traders often borrow money in order to trade and they are referred to as margin traders. Day traders may use any of the following strategies in order to make profits. From trend following, contrarian investing, range trading, scalping as well as rebate trading. Some people make millions every year just by day trading and not investing. And some people have a normal income just through day trading. If you have a good knowledge of the stock market then you could take the role of a day trades in order to make good profits in the market.

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