#Stock-Market  #Basic-of-SM  #Finance 

Terms Used in Stock Market(SM)

Stock Opening

  • Gap up opening
    • Shares opened higher than prev days closing
  • Gap down opening
    • Shares opened lower than prev days closing
  • Unch (Unchanged)
    • Share price remains unchange

Members

  • Brokers are called members of the Stock exchange
  • Investors can trade in the Secondary Market only through members of the stock market

Investors

  • Investor can only buy/sell through those Brokers
  • Types:
    • RII (Retail individual investors)
      • Individual which apply for less than Rs 2 lakh shares in IPO
    • HNI (High networth individuals)
      • Individual which apply for more than Rs 2 lakh shares in IPO
    • DII (Domestic institutional investors)
      • Eg: Bank, MF, LIC
    • FII/FPI
      • Foreign portfolio/institutional investors

Clearing House

  • NSCCL
    • National Securities Clearing Corporation Ltd
    • For NSE
  • ICCL
    • Indian Clearing Corporation Limited
    • For BSE
  • Metropolitan Clear
    • MSE

Regulator

  • SEBI –> Securities and Exchange Board of India
  • Same role as RBI in Banks
  • 1992
  • Regulates
    • Buyback
    • Takeover
    • Public issue, Right issue
    • Foreign portfolio invesors
    • MF
    • Broker registration
    • Prohibits fraud and unfair trade practice

Depositories

  • Convert physical shares to DeMAT format by Depositories
  • Your Shares are kept here in Electronic form
  • Will get Monthly depositories statement
    • On Email, which is registered in DeMAT account
    • Of all financial investment in Securities Market linked to PAN
      • MF, Stocks but not insurance
  • Two Depositories
    • National Securities Depository Ltd (NSDL)
    • Central Depositories Service(India) Ltd (CDSL)

Depositories Participent(DP)

  • Broker are called DP
  • Discount Brokers
    • Zerodha, Upstox
  • Full service Broker
    • Hdfc sec

Market Segments

  • 9.00 am to 9.15 am
    • Pre opening market session
    • To absorb volatility in the market
  • 9.15 am to 3.30 pm
    • Market Hours
  • 3.30 pm to 4.00 pm
    • For Brokers
  • 4.00 pm to 9.00 am
    • AMO (After market orders)
  • Mahurat Traading
    • Once in a Year on Laxmi puja(Diwali) in Evening
  • IPO get listed at 10 AM

Promoters

  • Person who starts the company

Types of company wrt promotors

  • Pvt.ltd –> Pub.ltd –> Listed Company
  • More than 500/200 Share holders -> need to turn from Pvt to Pub
  • Need very more Share holders -> Release IPO (List the company)

Face Value

  • Original price of the shares at which the Promoters have bought the shares
  • Share price at starting `when it was Pvt. Ltd
  • Is always in multiple of 1
  • Eg: Rs 10 Per Equity Share (Dmart)

TopLine, Bottomline Growth

  • TopLine : Turnover –> total sales
  • Bottomline: Profit after Tax –> Sales - Expense

Stock split

  • Increase liquidity
  • Due to the high price of current stock buy/sell of stock will be very less
  • So company can lower the price by reducing FACE VALUE and split the share
  • Eg:
    • Previous: FV - 2rs, Total no of shares - 25k, price/share: 5000, Total Rs - 5000 * 25
    • Now: FV - 1rs, Total no of shares - 50k, price/share: 2500, Total Rs - 2500 * 50

Share Certificate

  • De-Materialize (e-Share certificate)
  • Materialize (Physical Share certificate)

Contract Notes

  • It is like a Receipt issued by the Broker to the investor
  • It gives various details
  • Mandatory to issued by Broker within 24 hrs through E-mail, SMS

T+2 Settlement

  • It is a system where the transaction is settled after 2 working date from the Trade date
  • In INDIA –> settlement is done in T+2 working days
  • Old
    • T+30 -> T+2 (1996 DeMAT act)

Bonus

  • These are free Shares issued by the company to the Investors.
  • Related to Split, Share increases and price decreases as above ‘stock split’
  • Bonus Ratio
    • If a bonus is 1:2 then 1 free share for every 2 shares held
  • Announcement/Declaration date (08-05-2018)
    • Announcement of split or bonus
  • Ex-date (21-06-2018)
    • Two days before the record date
    • Date on which shares start trading at a revised price
  • Record date (23-06-2018)
    • The date on which you must have shares in Demat account

When getting Bonus?

  • Good Profit
  • So Reserve also increase
  • They may used the Reserve in below ways
    • Dividend
    • Expansion
    • Bonus Share
    • Buy back
  • Taxation on Splited share (Eg- 1:1 i.e. share at 1000 got inio 500 each)
    • 1st share
      • CP - 1000
      • SP - will be present price
      • Wheather LTCG/STCG: Sell date - Bought date
    • 2nd share
      • CP - 0
      • SP - will be present price
      • Wheather LTCG/STCG: Sell date - Split date

Gyan

  1. Can you have the majority of shareholdings in a company?
    • No, Can’t hold more than 5% shares of a company
    • Need to give disclosure to the company

Reference