Stock market agent india basics

By: Dominat On: 24.06.2017

Are you a US Person? Company News NAV Site Search. What returns can I expect from my investments in equity shares? What are the risks? Whom should I contact for my Stock Market related transactions?

Am I required to sign any agreement with the broker or sub-broker? What should I do when I want to open an account with a DP? How long does it take to receive my money for a sale transaction and my shares for a buy transaction? What happens if I could not make the payment of money or deliver shares on the pay-in day?

What happens if I do not get my money or share on the due date? What are the additional charges other than brokerage that can be levied on the investor?

What are the various kinds of accounts that I need to trade via Internet with Geojit? What are the tax implications of investing in Indian equities? Online share trading is the process of buying and selling of shares through the internet on the secondary market with a view to profiting from the difference in the buying price and selling price.

The share price of a stock is determined by the demand and supply of a particular share. Online share trading enjoys various advantages such as accessibility, security, convenience in tracking portfolio etc over traditional branch trading. An equity share represents the form of ownership. The holder of such a share is a member of the company and has voting rights. A good scrip picked up at the right time could fetch fairly good returns else the return may be meager or it may even turn negative, i.

In short, if the investment in fixed income category instruments is secured and risk-free to a large extent, investment in equities and related fields could be termed as risky. Dividend is the part of profit distributed by the company among its investors. It is usually declared as a percentage of the paid-up value or face value of the share.

A Share issued by companies to their shareholders free of cost by capitalization of accumulated reserves from the profits earned in the earlier years. A Bond is a promissory note issued by a company or government to its lenders. A Bond is evidence of debt on which the issuing company usually promises to pay the bondholder a specified amount of interest at intervals over a specified length of time, and to repay the original loan on the expiration date.

A bond investor lends money to the issuer and in exchange, the issuer promises to repay the loan amount on a specified maturity date.

It is a Bond issued by a company bearing a fixed rate of interest usually payable half-yearly on specific dates and principal amount repayable on a particular date on redemption of the debentures.

A Stock Exchange is a place where the buyer and seller meet to trade in shares in an organized manner. There are at present 25 recognized stock exchanges in the country that are governed by the Securities Contact Regulation Act, To be able to buy or sell shares in the stock markets a client would need to be registered with a stock broker like Geojit who holds membership in stock exchanges and who is registered with SEBI.

There are several types of orders that you can dictate to a broker. The most common type, which is a regular buy or sell order, is called a market order. Another type of order is a limit order wherein you ask the broker to trade only if the price reaches a specific level.

In a stop order , you tell the broker to sell your shares if the price drops to a certain level to prevent significant loss because if it drops to that level it is likely to drop further and your losses are likely to increase. Trading can be done via the phone or by coming in person to the office of Geojit or through any other facility provided by Geojit like Internet trading.

When the market goes up it is called a bullish trend and when the market goes down it is called a bearish trend. When you act upon a stock and buy into it, you are taking a position. A position is an amount of money committed to an investment in anticipation of favorable price movements. There are two kinds of positions: When you buy long, that means you are anticipating an upward movement in the price, and that is how you profit.

People usually buy stocks at prices expecting to sell them later at higher prices and hence make profits. Short positions are the tricky ones. When you buy short, you are anticipating a fall in the price and the fall is the source of your profits.

The shares will be sold and when the price falls they will be repurchased and given back and the difference is the where the investor profits. Of course, the investor who borrowed the shares carries the risk of not having the price move as anticipated, in which case he may lose money in repurchasing the stocks.

An index is a stock-market indicator created as a statistical measure of the performance of an entire market or segment of a market based on a sample of securities from the market. An index is thus a means to evaluate the overall performance of a market or of a segment of the market. An index measures aggregate market movements. Apart from being a general market indicator, indices are used as a benchmark to evaluate individual portfolio performance.

Professional money managers will always try to outperform the market, i.

Buying shares for the first time?

We have 2 renowned indices viz. As the name suggests, it is a premier index on Bombay Stock Exchange BSE. Nifty comprises of 50 large-cap companies on the National Stock Exchange NSE. The market watch, i. The client can also put a limit price order which would sit in the order book till it reaches a price time priority when the trade can be executed.

Contract Note is a confirmation of trades done on a particular day on behalf of the client. It establishes a legally enforceable relationship between the client and Geojit with respect to the settlement of the trades.

The Contract Note would show settlement number, order number, trade number, time of trade, quantity and price of the trades, brokerage charged, etc and it would be signed by an authorised person of Geojit. Pay-in day is the day when the broker shall make payment or delivery of securities to the exchange.

Pay-out day is the day when the exchange makes payment or delivery of securities to the broker. A depository can be compared to a bank. A depository holds securities like shares, debentures, bonds, Government Securities, units etc. Besides holding securities, a depository also provides services related to transactions in securities.

There are two main depositories in India, namely, a National Securities Depository Ltd. NSDL and b Central Depository Securities Ltd. CDSL , both of which are regulated by SEBI. Geojit is a Depository Participant of NSDL and will hold your securities in electronic form. You can approach Geojit or any DP of your choice and fill up an account opening form. These trades are done through stock brokers on a stock exchange.

The same delivery instruction slip can be used either for market trade or off-market trade by ticking one of the two options.

stock market agent india basics

In case of sales, the investor would need to transfer the shares to the pool account of Geojit for the specified settlement number. The pool account number for shares sold on BSE is IN and for NSE it is IN The delivery should necessarily come from the demat account of the investor and not from any other person. Similarly Geojit would directly transfer shares bought to the account of the investor.

The payment should necessarily come from the bank account of the investor and not from any other person. Similarly Geojit would pay an Account Payee cheque in the name of the investor, which will also contain the Bank name and account number of the client. The pay-out of funds and securities to the clients by Geojit will be within 24 hours of the pay-out.

In a Rolling Settlement trades executed during the day are settled based on the net obligations for the day. Hence trades executed on a Monday are typically settled on the following Wednesday considering 2 working days from the trade day.

The securities are put up for auction by the Exchange on account of non-delivery of securities by the selling trading member to ensure that the buying trading member receives the securities due to him. The non-delivery by the trading member could arise on account of short delivery. The Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member. In case of purchase on your behalf, the member broker has the liberty to close out transactions by selling securities in case you fail to make full payment to the broker for the execution of contract before pay-in day as fixed by Stock Exchange for the concerned settlement period unless you already have an equivalent credit with the broker.

The shortages in case of sales are met through auction process and the difference in price indicated in Contract Note and price received through auction is paid by member to the Exchange which is then liable to be recovered from the client. In both the cases any loss in transactions will be deductible from the margin money paid by you.

If the shares could not be bought in the auction i. The exchange is required to resolve all complaints. However, if the complaint is not addressed by the Stock Exchanges or is unduly delayed then the complaints along with supporting documents may be forwarded to Secondary Market Department of SEBI.

Your complaint would be followed up with the exchanges for expeditious redressal. In case of a complaint against a sub-broker, for redressal the complaint may be forwarded to the concerned broker with whom the subbroker is affiliated.

The trading member can charge: Service tax as applicable. Transaction charges levied by NSE, Stamp duty and other charges directly attributable to the transaction.

The brokerage and service tax is indicated separately in the contract note. Exchange prescribes margin rules from time to time, which currently are calculated on the Value at Risk model.

stock market agent india basics

Margins are to be paid by the investor before placing the order. Three kinds of accounts are required to be able to trade on-line. Long term capital gains Long Term investments that are held for more than 12 months are termed as long term capital assets. Profit on sale of such assets is termed as long term capital gain LTCG which as per the latest Budget notification will attract nil tax.

Any person who pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client whether as a discretionary portfolio manager or otherwise the management or administration of a portfolio of securities or the funds of the client, as the case may be is a Portfolio Manager.

Geojit is a SEBI Registered Portfolio Manager Reg.

Investopedia - Sharper Insight. Smarter Investing.

INP that offers Discretionary Portfolio Management Services to Residents who can invest a minimum of Rs. Capital Market enhances capital formation in the economy and comprises of - Primary Market is a place where new offerings by Companies are made either as an Initial Public Offering IPO or Rights Issue.

Majority of trading is done in this market which comprises of equity market and debt market. SELFIE-Trading Platform SELFIE Gold Browser based,ideal for people on the move. SELFIE Platinum Virtual dealer terminal,ideal for Active traders. SELFIE Mobile state of the art mobile trading platform Online Trading Features Benefits of Online Share Trading Margin Trading Funding Research Depository Class Room.

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