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

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