Here are a few more commonly used terms of the share market.
Buy
“to buy” means to take a position – or, to buy shares – in a company.
Sell
– Conversely, means getting rid of the shares purchased
Portfolio
: is a basket of shares usually held by a person or a fund.
Bid
– A bid is what Dinesh is willing to pay for a stock.
Ask
– Ask, on the other hand, is what people selling stocks are looking to get for their shares.
Limit order
– When placing a limit order to trade in shares, Dinesh can set the exact price he is willing to pay for the stock.
Market order
– It is an order that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price. It’s also referred to as an “unrestricted order.”
Day trading
– Day Trading or Intraday Trading is speculation in securities, specifically buying and selling financial instruments within the same trading day.
Let’s introduce Dinesh, a newbie, to the most commonly used terms of the share market.
Stock:
Also referred to as share or equity, stock is the basic ownership unit of a company.
This is the market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets.
Volatility:
Volatility is the degree of variation of a trading price series over time, as measured by the standard deviation of returns. Simply put, the fluctuation of a stock or the market in general is referred to a volatility
Liquidity:
Liquidity is how easily you can buy or sell a stock & convert it into cash.
Dividend:
The part of the company’s profits, which is usually distributed to company’s shareholders, periodically.
Bull Market:
A bull market is a market condition that means stock prices are expected to rise.
Bear Market:
A bear market is one in which investors expect stock prices to fall.
Amit has a strawberry farm. In peak season, when the market has ample supply, Amit’s strawberries are less in demand & are sold at a lower price.
In off-season, Amit produces strawberries in his special nursery. At that time, there is a shortage of supply in the market. So, Amit’s strawberries are more in demand & are sold at a greater price.
Just like Amit’s strawberries, stock prices are influenced by their demand & supply flows. With rising demand, stock prices go up & with falling demand, stock prices go down.
Several factors like a company’s profit & loss, positive & negative announcements, national economic trend, etc. determine the demand and supply of a particular stock.
Anyone can become a stock trader & earn profits from the changing stock prices by partnering with Angel One.
You can now start trading in just 1 Hour
Vinod & Venkat are best friends but their habits are different.
Vinod is tech-savvy & does everything online, Venkat on the other hand, prefers traditional methods over online transactions.
Likewise, their stock trading methods are also different.
An avid trader, Vinod prefers trading online. Through his online trading account he can track the market & buy or sell stocks himself at anytime from anywhere. He also receives expert advice, research reports & live market updates through multiple trading platforms accessible via his desktop, tablet & mobile phone.
Venkat, however, prefers offline trading since it gives him the opportunity to garner first-hand advice. So, when Venkat decides to buy or sell a stock, he calls his broker, who guides Venkat on the trade with professional expertise & then places the trade on Venkat’s behalf.
Online or offline – Choose your trading preference – at Angel One. You now understand the the comparison of Online Vs Offline Trading Account
what is limit order and how is it used this is Ravi he wants to know about limit order and how it is used Ashish his friend and a seasoned investor with Angel One explains suppose the shares of Lakshmi textiles are trading at one hundred and fifty rupees per share you want to buy shares in this company but think the market price is too high so you set one hundred and twenty five rupees per share as the maximum price at which you are willing to buy if the market value of the shares dips to 125 rupees Angel One your trusted brokers will purchase the shares of Lakshmi textiles for you similarly if you hold shares of Lakshmi textiles you can set an amount say 175 rupees as the minimum price at which you will sell your shares as soon as the market value of the shares increases to 175 rupees or higher your broker will sell your shares if the market value remains below 175 rupees he will continue to hold these shares limit orders, therefore, help you control the price at which you buy and sell stock Ravi now understands what limit order is and how to use it.
Ajay is a successful IT professional. This year, with his performance bonus, he wants to start investing in stocks but is not sure, how to go about it…
Here’s a 3-step to buy your first stock
Choose the stock wisely
Research and obtain expert advice about the companies that seem promising to you. Then zero in on the most preferred company.
Don’t try to time the market
History proves, a well chosen stock, with time, will pay back. So, anytime is the right time to enter the market.
Make the actual purchase
When you’ve zeroed in on the stock, make the actual investment by buying at least one share. Only when you begin the journey will you develop the confidence.
With these easy steps, Ajay is now ready to buy his first stock with Angel One as his trusted partner.
Open a Demat & Trading in 1 hour.
Meet Arvind. Arvind has been thinking of investing in the stock market & needs some solid insights.
So, here are 5 golden rules of equity investment:
Rule#1
Avoid the herd mentality. Don’t let the decision of others influence you. Seek advice from established market experts & make your own informed decision.
Rule#2
Stay away from speculators. No one actually knows, the exact time to buy low or sell high.
Rule#3
Diversify your portfolio by spreading your investment. This will weaken any risk of loss.
Rule#4
Invest long-term & don’t let emotions like fear and greed cloud your judgment.
Rule#5
Be a disciplined investor. Invest a fixed amount of money at regular intervals & monitor your investments periodically.
Good Read: Stock Market Investment guide
With these insights, Arvind is ready to create wealth in the stock market with Angel One as his trusted partner.
Mohan has investments in real estate, gold & fixed deposits. However, experts often advise him to invest in equity. Let’s see why:
Equity requires low investment:
Unlike Fixed Deposit, Gold & Real estate, you can enter the equity market with a much smaller capital.
Equity offers higher returns:
It is historically proven that Equity offers better returns in comparison to FD, Gold & Real-estate.
Returns on Equity beat inflation & are completely tax-free.
Equity offers high liquidity
Equity can be bought & sold very easily & converted to cash pretty fast.
Equity is the best performing asset class
Equity increases your wealth faster over a long time due to compounding effect, capital appreciation & dividend income.
For example if in 1993, Mohan would have invested Rs.10,000/- in FD & Infosys Shares, today, they would be worth Rs.66,500/- & Rs.1.25Cr respectively.
Make your own online share market investment plan & Benefit from these advantages by investing in equity with Angel One.
