Share Trading-Basic Guide

Published: 18th January 2011
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Share trading is the process of buying or selling of shares in a stock market. Stock market is a market where companies stocks are traded by brokers from around the world on the behalf of the investors. In stock trading a lot have been changed over the years, Earlier there was a time when the trader himself have to be physically present for doing stock trading, but now with the coming up of internet age anyone can do stock trading by sitting at their own places. Now a day's most of the people have left their jobs to make Share trading as their full time profession. Stock trading can be done from any place around the globe, there is no particular place assigned for it.

The Thumb rule for doing stock trading is to buy the stock at low price and sell the stock at a higher price.Now a day's stock trading is being done mostly from margin money- the trader doesn't required to put all his money into trading, the brokers gives certain percentage of margins to each of their clients for doing margin trading.This margin may vary from client to client.Stock brokers are the professionals who are responsible for doing trading for its clients.They also act as a mediator between the buyer and seller of the stocks. Stock broker is also responsible for gathering of the information regarding the stocks, bonds, mutual funds and other financial instruments and providing this information to its clients. Stock broker charges certain commission for rendering its services.

In India, share trading is done through two stock exchanges: BSE (Bombay stock exchange) and NSE (national stock exchange).Bombay stock exchange is known as the largest stock market in Asia and NSE after its integration in 1992 became the largest stock exchange in India. Both these exchanges follow the same trading mechanism, trading hours and settlement process.There are many other stock exchanges in India but BSE & NSE accounts for most of the trading. Share trading can be riskier at times if the investor or trader invests in any of the stock without having the proper knowledge about the stock and the company.This is the reason why experts believe that market information plays a very important role in up and down movement of stocks.

Share trading can be done on daily (intraday) as well as on delivery basis.Intraday refers to a position that is opened and closed on the same day.Whereas delivery refers to a position where an investor keeps his position opens for a long time, mostly the investors takes the delivery position at a time when they are confident about the fundamentals of the stocks or have some information about the company.Share trading in India is previously done under the banyan tree, where the traders used to gather under the banyan tree in front of Mumbai's town hall, this location changes frequently as the number of brokers increases and eventually moved to Dalal Street in 1874.

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