Working of a stock market. To learn more about how you can earn on the stock market, one has to understand how it works. When the buy order of the shares is communicated to the broker he routes the order through his system to the exchange. The order stays in the queue exchange's systems and gets executed when the order logs on to the system within buy limit that has been specified. The shares purchased will be sent to the purchaser by the broker either in physical or demat format.

The Bombay Stock Exchange BSE and the National Stock Exchange of India Ltd NSE are the two primary exchanges in India. In addition, there are 22 Regional Stock Exchanges. However, the BSE and NSE have established themselves as the two leading exchanges and account for about 80 per cent of the equity volume traded in India. The NSE and BSE are equal in size in terms of daily traded volume.

The average daily turnover at the exchanges has increased from Rs crore in to Rs 1, crore in and further to Rs 2, crore in April - August NSE has around shares listed with a total market capitalization of around Rs 9,21, crore Rs bln.

The BSE has over stocks listed and has a market capitalization of around Rs 9,68, crore Rs bln. Most key stocks are traded on both the exchanges and hence the investor could buy them on either exchange. Both exchanges have a different settlement cycle, which allows investors to shift their positions on the bourses. The primary index of BSE is BSE Sensex comprising 30 stocks. The BSE Sensex is the older and more widely followed index. Both these indices are calculated on the basis of market capitalization and contain the heavily traded shares from key sectors.

The markets are closed on Saturdays and Sundays. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT BSE On Line Trading and NEAT National Exchange Automated Trading System.

It facilitates more efficient processing, automatic order matching, faster execution of trades and transparency. The scrips traded on the BSE have been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent those, which are in the carry forward system Badla.

The 'F' group represents the debt market fixed income securities segment. The 'Z' group scrips are the blacklisted companies. The key regulator governing Stock Exchanges, Brokers, Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India SEBI Ltd.

In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. Typically trades taking place on Monday are settled on Wednesday, Tuesday's trades settled on Thursday and so on. Suppose you have sold some shares on NSE and are trying to figure out that if you can use the money to buy shares on NSE in a different settlement cycle or say on BSE.

To simplify things for ICICI Direct customers, we have introduced the concept of Buying Limit BL. Buying Limit simply tells the customer what is his limit for a given settlement for the desired exchange.

Your Buying Limit is Rs 50, Assume that you sell shares worth Rs 1,00, on the NSE on Monday. The BL therefore for the NSE at that point of time goes upto Rs 1,50, This means you can buy shares upto Rs 1,50, on NSE or BSE.

If you buy shares worth Rs 75, on Tuesday on NSE your BL will naturally reduce to Rs 75, Hence your BL is simply the amount set aside by you from your bank account and the amount realized from the sale of any shares you have made less any purchases you have made.

Your BL of Rs 50, which is the amount set aside by you from your Bank account for purchase is available for BSE and NSE.

As you have made the sale of shares on NSE for Rs. The amount from sale of shares in NSE will also be available for purchase on BSE. ICICI Direct makes it very easy for its customers to know their BL on the click of a mouse.

You just have to specify the Exchange and settlement cycle and on a click of your mouse, the BL will be known to you. Dematerialization in short called as 'demat is the process by which an investor can get physical certificates converted into electronic form maintained in an account with the Depository Participant. The investors can dematerialize only those share certificates that are already registered in their name and belong to the list of securities admitted for dematerialization at the depositories.

The organization responsible to maintain investor's securities in the electronic form is called the depository. In other words, a depository can therefore be conceived of as a "Bank" for securities. In India there are two such organizations viz.

The depository concept is similar to the Banking system with the exception that banks handle funds whereas a depository handles securities of the investors. An investor wishing to utilize the services offered by a depository has to open an account with the depository through a Depository Participant. The market intermediary through whom the depository services can be availed by the investors is called a Depository Participant DP.

As per SEBI regulations, DP could be organizations involved in the business of providing financial services like banks, brokers, custodians and financial institutions. This system of using the existing distribution channel mainly constituting DPs helps the depository to reach a wide cross section of investors spread across a large geographical area at a minimum cost.

The admission of the DPs involve a detailed evaluation by the depository of their capability to meet with the strict service standards and a further evaluation and approval from SEBI. Realizing the potential, all the custodians in India and a number of banks, financial institutions and major brokers have already joined as DPs to provide services in a number of cities.

Advantages of a depository services: Trading in demat segment completely eliminates the risk of bad deliveries. In case of transfer of electronic shares, you save 0. Lower interest charge for loans taken against demat shares as compared to the interest for loan against physical shares.

RBI has increased the limit of loans availed against dematerialized securities as collateral to Rs 20 lakh per borrower as against Rs 10 lakh per borrower in case of loans against physical securities.

Fill up the account opening form, which is available with the DP. Sign the DP-client agreement, which defines the rights and duties of the DP and the person wishing to open the account. Receive your client account number client ID. This client id along with your DP id gives you a unique identification in the depository system. Fill up a dematerialization request form, which is available with your DP. Submit your share certificates along with the form; write "surrendered for demat" on the face of the certificate before submitting it for demat Receive credit for the dematerialized shares into your account within 15 days.

Procedure of opening a demat account: Opening a depository account is as simple as opening a bank account.

Margin Trading or Intraday Trading

You can open us treasury granted exemption for forex swaps depository account with any DP convenient to you by following these steps: There is no restriction on the number of depository accounts you can open.

However, if your existing physical shares are in joint names, be sure to open the account in the same order of names before you submit your share certificates for demat Procedure to dematerialize your share certificates: In case of directly purchasing dematerialized shares from the broker, instruct your broker to purchase the dematerialized shares from the stock exchanges linked to the depositories. Once the order is executed, you have to instruct your DP to receive securities from your broker's clearing account.

60 second binary options free demo queen have to ensure that your broker also gives a matching instruction to his DP to transfer the shares purchased on your behalf into your depository account.

Stocks traded under demat: Securities and Exchange Board of India SEBI has already specified for settlement only in the blacklist forex amf form in for particular effective forex pivot point trading. Investors interested in these stocks receive shares only caller id iphone 4s not showing demat form without any instruction to your cardiff metropolitan university internationalisation strategy. While SEBI has instructed the institutional investors to sell scripts only in the demat form.

The shares by non institutional investors can be sold in both physical and demat form. As there is a mix of both form of stocks, it is possible if you have purchased a stock in this category, you may get delivery of both physical and demat shares. Opening of a demat account through ICICI Direct: Opening an e-Invest account with ICICI Direct, will enable you to automatically open a demat account with ICICI, one of the largest DP in India, thereby avoiding the hassles of finding an efficient DP.

Since the shares to be bought or sold through ICICI Membuat ea robot forex will be only in the demat form, it will avoid the hassles of instructing the broker to buy shares only in demat form.

Adding to this, you will not face problems like checking whether your broker has transferred the shares from his clearing account to your demat account. If you etrade options trading requirements not have shares and you sell them it is known as going short on a stock.

Generally a trader will go short if he expects the how to sell intraday shares in icicidirect to decline. In a rolling settlement cycle you will have to cover by end of the day on which you had gone short.

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Normally to buy and sell shares, you need to have the money to pay for your purchase and shares in your demat account to deliver for your sale. In case the price during the course of the settlement cycle moves in your favor risen in case forex brokers oil purchase done earlier and fallen in case of a sale done earlier you will make a profit and you receive the payment from the exchange.

In case the price movement is adverse, you will make a loss and you will have to make the payment to the exchange. Margins are thus collected to safeguard against any adverse price movement. Margins are quoted as a percentage of the value of the transaction. Buying and selling on margin in India is quite different than what is referred to in US markets. There is no borrowing of money or shares by your caller id iphone 4s not showing to make sure that the settlement takes place as per SE schedule.

As the trade is squared off before the settlement cycle is over, there is no need to borrow money or shares.

Suppose you have Rs 1,00, with you in your Bank account. You can use this amount to buy 10 shares of Infosys Ltd. In the normal course, you will pay basic difference between forex and stock market the shares on the settlement day to the exchange and receive 10 shares from the exchange which will get credited to your demat account.

You can now buy upto 40 shares earn rewards cash complaints Infosys Ltd.

Now as you do not have the money to take delivery of panduan pemula forex shares of Infosys Ltd. Now suppose the price of Infosys Ltd rises to Rs. In this case your profit is Rs 40, which is much higher than on the 10 shares if you had bought with the intent to take delivery. The risk is that if the price falls during the settlement cycle, you will still be forced to cover square the transaction and the loss would be adjusted against your margin amount.

You do not have shares in your demat account and you want to sell as you expect the prices of share to go down. You can sell the shares and give the margin to your broker at the applicable rate.

As you 15 min binary options not have the shares to deliver you will have to cover square your sell transaction by placing a buy order before the end of the settlement cycle.

Just like buying on margin, in case the price moves in your favor falls you will make profit.

In case price goes up, you will make loss and it will be adjusted against binary options izhevsk margin amount. There are various types of orders, which can be placed on the exchanges: The order refers to a buy or sell order with a limit price.

Suppose, you check the quote of Reliance Industries Ltd. You place a buy order for RIL with a limit price of Rs This puts a cap on your purchase price. In this case as the current price is greater than your limit price, order will remain pending and will be executed as soon as the price falls to Rs.

In case the actual price of RIL on the exchange was Rshistorical fx rates nzd usd order will be executed at the best price offered on the exchange, say Rs Thus you may get an execution below your limit price but in no case will exceed the limit buy price.

Similarly for a limit sell order in no case the execution price will be below the limit sell price. Generally a market order is used by investors, who expect the price of share to move sharply and are yet keen on buying and selling the share regardless of price. Suppose, the last quote of RIL is Rs and you place a roaring twenties stock market crash 1929 buy order.

The execution will be at the best offer price on the exchange, which could be above Rs or below Rs The risk is that the execution price could be substantially different from the last quote you saw. Please refer to Important Fact for Online Investors.

A stop loss order allows the trading member to place an order which gets activated only when the last traded price LTP of the Share is reached or crosses a threshold price called as the trigger price.

The trigger price will be as on the price mark that you want it to be. For example, you have a sold position in Reliance Ltd booked at Rs. Later in case the market goes against you i. Then you would put a SL Buy order with a Limit Price of Rs.

You may choose to give a trigger price of Rs. The execution will then be immediate and will be at the best price between However stock movements can be so violent at times. The prices can fluctuate from the current level to over and above the SL limit price, you had quoted, at one shot i. At this moment your order will immediately be routed to the Exchange because the LTP has crossed the trigger price specified by you.

However, the trade will not be executed because of the LTP being over and above the SL limit price that you had specified. In such a case you will not be able to square your position. Again as the market falls, say if the script falls to or below, your order will be booked on the SL limit price that you have specified i. Even if the script falls from Some seller, somewhere will book a profit in this case form your buy order execution.

Hence, an investor will have to understand that one of the foremost parameters in specifying on a stop loss and a trigger price will have to be its chances of executionability as and when the situation arises.

A two rupee band width between the trigger and stop loss might be sufficient for execution for say a script like Reliance, however the same band hold near to impossible chances for a script like Infosys or Wipro. This vital parameter of volatility bands of scrips will always have to be kept in mind while using the Stop loss concept. In order to check the volatility of shares, SEBI has come with a set of rules to determine the fixed price bands for different securities within which they can move in a day.

As per Sebi directive, all securities traded at or above Rs.

Guide

All securities traded below Rs. Price band for all securities traded at or above Rs. The previous day's closing price is taken as the base price for calculating the price. As the closing price on BSE and NSE can be significantly different, this means that the circuit limit for a share on BSE and NSE can be different. In common parlance the carry-forward system is known as 'Badla', which means something in return.

Badla is the charge, which the investor pays for carrying forward his position. It is a hedge tool where an investor can take a position in a scrip without actually taking delivery of the stock.

He can carry-forward his position on the payment of small margin. In the case of short-selling the charge is termed as 'undha badla'. The CF system serves three needs of the stock market: If he wishes to short sell without owning the underlying security, the stock lender steps into the CF system and lends his stock for a charge. If he wishes to buy the share without paying the full consideration, the financier steps into the CF system and provides the finance to fund the purchase The scheme is known as "Vyaj Badla" or "Badla" financing.

For example, X has bought a stock and does not have the funds to take delivery, he can arrange a financier through the stock exchange 'badla' mechanism. The financier would make the payment at the prevailing market rate and would take delivery of the shares on X's behalf.

You will only have to pay interest on the funds you have borrowed. An investor can either take the services of a badla financier or can assume the role of a badla financier and lend either his money or securities. On every Saturday a CF system session is held at the BSE.

The scrips in which there are outstanding positions are listed along with the quantities outstanding. Depending on the demand and supply of money the CF rates are determined. If the market is over bought, there is more demand for funds and the CF rates tend to be high.

However, when the market is oversold the CF rates are low or even reverse i. The scrips that have been put in the Carry Forward list are all 'A' group scrips, which have a good dividend paying record, high liquidity, and are actively traded.

The scrips are not specified in advance because it is then difficult to get maximum return. All transactions are guaranteed by the Trade Guarantee Fund of BSE, hence, there is virtually no risk to the badla financier except for broker defaults. Even in the worst scenario, where the broker through whom you have invested money in badla financing defaults, the title of the shares would remain with you and the shares would be lying with the "Clearing house".

However, the risk of volatility of the scrip will have to be borne by the investor. Securties lending program is from the NSE. It is similar to the Badla from the BSE, only difference being the carry forward system not being allowed by the NSE. Meaning this is a where in a holder of securities or their agent lends eligible securities to borrowers in return for a fee to cover short positions.

Insider trading is illegal in India. Insider trading refers to transactions in securities of some company executed by a company insider. Although an insider might theoretically be anyone who knows material financial information about the company before it becomes public, in practice, the list of company insiders on whom newspapers print information is normally restricted to a moderate-sized list of company officers and other senior executives. Most companies warn employees about insider trading.

SEBI has strict rules in place that dictates when company insiders may execute transactions in their company's securities. All transactions that do not conform to these rules are, in general, prosecutable offenses under the relevant law.

Working of Stock Market. Indian Stock Market Overview. Concept of Buying Limits. Concept of Margin Trading. India's Unique - Badla. Working of a stock market To learn more about how you can earn on the stock market, one has to understand how it works. Concept Of Buying Limit Suppose you have sold some shares on NSE and are trying to figure out that if you can use the money to buy shares on NSE in a different settlement cycle or say on BSE.

Concept Of Margin Trading: Important facts for NRI customers: Circuit Filters And Trading Bands: Badla financing In common parlance the carry-forward system is known as 'Badla', which means something in return. Securities lending Securties lending program is from the NSE.