Start Buy/Sell(Trading)

Trading System

1. Open Outcry
   • Traders gather physically and bid
2. Online Trading
   • Trade Electronically, physical present not required

Types of Orders (Buy or Sell)

• Limit
  • Investor bargains and does not offer to Buy/Sell at current Market price
• Market
  • Investor buys/sells at the current Market price
• StopLoss order
  • SL
  • SLM
• Bracket Order(BO)
• Cover Order(CO)
• After Market Order(AMO)
• MIS – Margin Intraday Square off
  • Intraday
• CNC – Cash and Carry
  • Delivery
• Validity
  • Day
    • Whole day
  • IOC Order (Immediate or Cancel)
    • It is an order where the Trader wants to immediately executes his Buy/Sell order
    • If not executed immediately the order will get cancel
• GTD (Good till Day) order
  • This order is valid till the end of the Trading Day on which it is placed
• GTC (Good till canceled) order
  • This order remains in the system till it is executed
• GTT (Good Till Triggered) Order

Two types of Book Maintain by Broker

• Order Book
  • After placing an order, it appears here
• Trade book
  • After an order is Executed, it appears here

Market Bullish/Bearish

• Bullish –> Long on Market –> Up –> Green
• Bearish –> Short on Market –> Down –> Red

Short Sell (Earn in Falling Market)

• It’s a Trade where a Trader Sell first and Buy later
• Trader Bearish about the Market
• Cover your position before Market Ends (sq off the position) -> else Penalty
• Should be Intra Day

Share Auction

• If a person does MIS BUY/SELL and does not sq off his position by the End of the day
• then his share is Auction
• Broker participate in auction market (3.30 - 4.00) on behave of their client
• NOTE:
  • Any LOSS Gain –> owed by Seller
  • Any PROFIT Gain –> transferred to IEPF(Investor Education and Protection Fund)
  • Maximum auction can be 20%

StopLoss (SL)

• It is an order placed by a buyer at a price lower than his Buying Price
• Use SL to limit your losses
• Types:
  • StopLoss Market (SLM)
  • StopLoss Limit (SLL)
• StopLoss Market
  • Better for most Volatile Market
  • You will get Slippage —> Difference b/w TP and Sq. off Price
  • Trade will Sq off either below or above Trigged price(TP) whichever is the Market Price(MP)
  • Here TP and SLP will mostly same for Regular Market
  • BUT it may have Slippage in Volatile Market
• StopLoss Limit
  • A bit danger, If it hit Trigged price(TP) but passed over SLL price then Trade may not get executed
• SL is not necessary for Investment but necessary for Intraday

Circuit Filter/Breakers

• Known as
  • Upper Circuit and
    • All Buyers, No/few Sellers
  • Lower Circuit
    • All Sellers, No/few Buyers
• Those Circuit can be of –> 2%, 5%, 10%, 20%, 40% based on Category of share
• Circuit is decided by –> NSE, BSE
• Circuit is calculated on Last Day closing price
• Refresh Circuit
  • Normaly in 6 months
  • OverNight -> If very bad news occurs, To limit Investors LOSS.
  • Eg: From 20% to 10%

No Circuit filter(Exceptions)

• Circuit Filter is not applicable if
  1. Stock listed in Future & Options (F&O)
  2. First day of listing in Secondary Market
• Eg: YesBank, Satyam,

Market-Wide Circuit Braker

• The Exchange has implemented index-based market-wide circuit breakers with effect from July 02, 2001
• 10%, 15%, 20%
• Lower circuit:
  • May 17, 2004 – Due to NDA govt fall
  • May 22, 2006 –
  • Oct 17, 2007 –
  • Jan 22, 2008 –
• Upper circuit
  • May 18, 2009 – Due to UPA re-elected

Reference

• Circuit Breakers: NSE