11-02-2013, 04:41 PM
A Journey into Stock Markets
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What not to Expect
Technical indicators
Strategies
Futures and options
What is a Stock
It’s a means to own a company.
It is a kind of security.
(The definition of ‘Securities’ as per the Securities Contracts Regulation Act (SCRA), 1956, includes instruments such as shares, bonds, scrips, stocks or
other marketable securities of similar nature in or of any incorporate company or body corporate, government securities, derivatives of securities, units of collective investment scheme, interest and rights in securities, security receipt or any other instruments so declared by the Central Government.)
Delivery Based Trading
Buying and Selling are on different days
Brokerage will be higher than intra-day
Their will be minimum delivery charges
What is short selling?
Selling something which you don’t have.
Ex: Lets consider a company RIL.
Its priced at Rs 2,500/- before opening. You know it’s going to fall that day because of some
reason. But you don’t have any shares with you of RIL.
But still you can sell the shares, this is called as short selling.
What if you don’t Short Cover?
Lets understand this with an Example.
Assume you short sold on Monday, as you haven’t short covered it, you need to deliver it on Wednesday(T + 2). But you don’t have the shares to deliver. So NSE or BSE will buy the shares on behalf of you in auction market, and deliver it to the buyer in (T + 3 days). In auction market max price is 10% higher than in normal market.