LEARN

TRADING IN 5
DAYS
Table of Content
DEMAT ACCOUNT................................................................................................................. 6
Importance of Demat Account............................................................................................................ 6
Types of demat account...................................................................................................................... 6
Demat account Meaning and Features............................................................................................. 7
Demat Account Benefits...................................................................................................................... 7
Documents required for opening a demat account......................................................................... 9
Proof of Identity (POI):......................................................................................................................... 9
List of documents admissible as Proof of Identity:.......................................................................... 9
List of documents admissible as Proof of Address:.........................................................................9
Demat Account Opening Procedures.............................................................................................. 11
Charges for Opening a Demat Account.......................................................................................... 12
How much time it takes to open a Demat Account?......................................................................12
Important Terminology to Understand............................................................................................. 12
Demat Account Charges:.................................................................................................................. 13
Function of the Depository Participant............................................................................................ 13
Evolution of Demat Account..............................................................................................................14

HOW TO USE A DEMAT ACCOUNT?................................................................................................ 14

Dematerialize Securities....................................................................................................................14
Re-materialize Securities.................................................................................................................. 15
Nomination Facility............................................................................................................................. 15
Investing.............................................................................................................................................. 15
Tracking and Monitoring.................................................................................................................... 15
Statements.......................................................................................................................................... 15
Corporate Benefits............................................................................................................................. 15
Modifications....................................................................................................................................... 15
Power of Attorney............................................................................................................................... 15
Transmission....................................................................................................................................... 15

OTHER IMPORTANT TERMINOLOGIES...........................................................................................16

Transfer, Closure, cum Waiver (TCW)............................................................................................ 16
Depository Concepts......................................................................................................................... 16
Securities’ Dematerialization............................................................................................................ 16
Dematerialization Credit....................................................................................................................16
Transmission cum Demat................................................................................................................. 16
Transposition cum Demat................................................................................................................. 16
Re-materialization.............................................................................................................................. 16
Freezing and De-freezing................................................................................................................. 16
Closure................................................................................................................................................ 16

TRADING ACCOUNT.......................................................................17
What is a Trading Account................................................................................................................ 17
Importance of Trading Account........................................................................................................ 17
Types of Trading Account................................................................................................................. 17
Features & Benefits........................................................................................................................... 17
Features and Benefits of Trading Account:.................................................................................... 18
 Benefits of a Trading account...........................................................................................................18
Selecting the Best Trading account in India...................................................................................19
Procedures to Open a Trading Account online.............................................................................. 19
Documents required.......................................................................................................................... 19
Due diligence and rate structure......................................................................................................19
Enquiries pertaining to opening an online trading account.......................................................... 20
Submitting an application..................................................................................................................20
Application acknowledgment............................................................................................................20
Linking of trading and demat accounts........................................................................................... 20
How to Place a Buy Order................................................................................................................ 20
Selling Shares.................................................................................................................................... 20
Open a Trading account....................................................................................................................21

DIFFERENCE BETWEEN TRADING ACCOUNT AND DEMAT ACCOUNT.................................21

Nature.................................................................................................................................................. 21
Differentiated function....................................................................................................................... 21
Role in the trading process...............................................................................................................21
Charges incurred by the investor.....................................................................................................21
Prerequisites for opening of an account......................................................................................... 22

NRE, NRO, NRI TRADING ACCOUNT IN INDIA.............................................................................. 22

NRI Trading Account..........................................................................................................................22
Types of Accounts..............................................................................................................................22
Bank Branch....................................................................................................................................... 22
Application Form................................................................................................................................ 22
Documents..........................................................................................................................................22
Making Payments for Purchases..................................................................................................... 23
Remittance of Sales Proceeds.........................................................................................................23
Transfer of Shares............................................................................................................................. 23

WHY YOU NEED A TRADING ACCOUNT.........................................................................................23

What You Can do with a Trading Account...................................................................................... 23
Opening A Trading Account with Angel Broking............................................................................ 23
How Much Money You Can Save.................................................................................................... 23
How Much Time You Can Save....................................................................................................... 24

ONLINE SHARE TRADING.............................................................26

Online Share Trading for Beginners................................................................................................26
Instruments Traded in Indian Share Markets.................................................................................26

WHAT IS ONLINE TRADING & HOW TO DO IT...............................................................................26

What is Online Trading......................................................................................................................26
How to Trade Online..........................................................................................................................26

ONLINE SHARE TRADING TOOLS & PLATFORMS.......................................................................27

Platforms for Online Trading.............................................................................................................27
Tools for Online Share Trading........................................................................................................ 27

HOW TO START YOUR ONLINE TRADING PORTFOLIO............................................................. 28

Steps to Trade Online........................................................................................................................28
Understand the Trading Platform.....................................................................................................28
Start Trading....................................................................................................................................... 29
ONLINE VS. OFFLINE SHARE TRADING ........................................................................................29
Steps for Internet Trading................................................................................................................. 29
Differences between Online and Offline Trading Accounts..........................................................29

ONLINE STOCK TRADING TIPS FOR THE INDIAN SHARE MARKET....................................... 30

Things to Know Before Online Share Trading............................................................................... 30
How to do Online Trading................................................................................................................. 30
Tips to Choose Reliable Online Stock Trading Broking Firm.......................................................31
Tips for Online Stock Trading........................................................................................................... 31

INTRADAY TRADING.......................................................................32
How to Go About Intraday Trading.................................................................................................. 32
Basic Rules of Intraday Trading.......................................................................................................32
Intraday Trading Tips......................................................................................................................... 32
Intraday Trading indicators............................................................................................................... 32
How to make profit in intraday trading............................................................................................ 32
Intraday Time Analysis...................................................................................................................... 32
How to Choose Stocks for Intraday Trading.................................................................................. 33
Choose Two or Three Liquid Shares...............................................................................................33
Determine Entry and Target Prices................................................................................................. 33
Utilizing Stop Loss for Lower Impact...............................................................................................33
Book Your Profits when Target is Reached.................................................................................... 33
Avoid being an Investor.....................................................................................................................33
Research your Wish list thoroughly.................................................................................................33
Don’t Move against the Market........................................................................................................ 33
Rules for Intraday Trading................................................................................................................ 34
Basic Rules for Intraday Trading......................................................................................................34
Intraday Trading indicators............................................................................................................... 34
How to make profit in intraday trading............................................................................................ 34
Intraday Time Analysis...................................................................................................................... 35
How to Choose Stocks for Intraday Trading.................................................................................. 35

INTRADAY TRADING GUIDE FOR BEGINNERS............................................................................ 35

Enter and Exit intraday trading at an Ideal Time........................................................................... 35
Choose stocks for intraday trading..................................................................................................35
Best day trading strategies for beginners.......................................................................................35
Pick the intraday market direction................................................................................................... 36

HOW TO CHOOSE STOCKS FOR INTRADAY TRADING..............................................................36

Tips to Choose the Right Intraday Trading Stocks........................................................................ 36

HOW TO MAKE PROFIT IN INTRADAY TRADING..........................................................................37

How to Make Profits in Intraday Trading......................................................................................... 37

INTRADAY TRADING INDICATORS...................................................................................................38

Information Offered by Intraday Trading Indicators.......................................................................38
Useful Intraday Trading Indicators...................................................................................................38
Decoding the Intraday Trading Indicators.......................................................................................38
INTRADAY TRADING TIME ANALYSIS............................................................................................. 39
Intraday Trading Charts..................................................................................................................... 39

TIPS ON HOW TO PICK STOCKS FOR INTRADAY TRADING.................................................... 40

How to pick stocks for intraday trading:.......................................................................................... 40
Stocks of the day................................................................................................................................40
Week’s movement............................................................................................................................. 40
Resistance level................................................................................................................................. 40
Trading.................................................................................................................................................40
Top gainers and losers...................................................................................................................... 40

SHARE MARKET.............................................................................. 41
Share Market Basics......................................................................................................................... 41
Types of Share Market...................................................................................................................... 41
Financial Products Traded on the Stock Market............................................................................42
Why People Invest in Share Market................................................................................................42
What is a stock exchange?...............................................................................................................43
How much is the minimum amount for investing in share market?............................................ 43
How is the market qualified as bull or bear?.................................................................................. 43
Rolling Settlements............................................................................................................................43
Stock Exchange Board of India (SEBI)...........................................................................................43
Investing in Shares............................................................................................................................ 43

HOW DOES STOCK MARKET WORK?............................................................................................ 44

Working of the Stock Market............................................................................................................ 44
Steps to Invest in the Indian Stock Market.....................................................................................44

THE BENEFITS OF INVESTING IN STOCKS.................................................................................. 45

Benefits of Investing in Stocks..........................................................................................................45

THINGS TO KNOW ABOUT INDIA'S STOCK MARKET .................................................................46

Trading Mechanism........................................................................................................................... 46
Trading Hours and Settlement......................................................................................................... 46
Market Indices.................................................................................................................................... 46
Market Regulator................................................................................................................................46

HOW TO INVEST IN THE STOCK MARKET.....................................................................................46

STOCK MARKET GUIDES FOR BEGINNERS................................................................................ 47

SHARE MARKET INVESTMENT GUIDES........................................................................................ 48

Participants in the Stock Market...................................................................................................... 48
Order Processing............................................................................................................................... 48

HOW TO TRADE IN INDIAN SHARE MARKET................................................................................49

The Process of Trading..................................................................................................................... 49
Share Market Basics......................................................................................................................... 49
How to Trade in Share Market......................................................................................................... 49
How Much You Should Invest.......................................................................................................... 49
What Should You Base Your Decisions on?.................................................................................. 50
Know Your Rights...............................................................................................................................50
WHY DO PEOPLE BUY SHARES?.................................................................................................... 50
Wealth creation.................................................................................................................................. 50
Opportunities to own..........................................................................................................................50
Portfolio diversity................................................................................................................................50
Minimizing loss................................................................................................................................... 50
Easily accessible money...................................................................................................................50
Combating risks..................................................................................................................................51
Added benefit of dividends............................................................................................................... 51

EQUITY?............................................................................................. 51
Understanding an Equity...................................................................................................................51
Trading in Equity................................................................................................................................ 51
Benefits of Investing in Equity.......................................................................................................... 51
Equity for a Shareholder................................................................................................................... 52
Equity investment returns................................................................................................................. 52
Types of Equity Market......................................................................................................................52
Equity Market Procedures................................................................................................................ 52

WHAT ARE EQUITY DERIVATIVES? ................................................................................................ 53

Equity as assets................................................................................................................................. 53
Derivatives.......................................................................................................................................... 53
Benefits of derivatives....................................................................................................................... 53
Types of derivative contracts............................................................................................................53

IMPORTANT FACTS TO KNOW ABOUT DIVIDENDS.....................................................................54

Important Facts to Know about Dividends......................................................................................54
Types of Dividends............................................................................................................................ 54
Dates to Remember.......................................................................................................................... 54
Benefits of Dividends.........................................................................................................................54

STOCK MARKET BASIC GLOSSARY .............................................................................................. 55

RISK MANAGEMENT IN STOCK MARKET...................................................................................... 56

Risk Management Strategies............................................................................................................56

INVESTMENT OPPORTUNITIES IN INDIAN STOCK MARKET....................................................57

Why do People Invest in Share Market?........................................................................................ 57
Know the Best Investment Opportunities in Shares..................................................................... 57
Earn Profits by Investing in the Share Market............................................................................... 57

HOW YOUNG INVESTORS CAN MANAGE PORTFOLIO?........................................................... 58

Begin Early..........................................................................................................................................58
Diversify...............................................................................................................................................58
Minimum Cost.....................................................................................................................................58
Discipline............................................................................................................................................. 58
Asset Allocation.................................................................................................................................. 58
 DAY - 1
DEMAT ACCOUNT
A demat account is used for holding securities in the electronic format, after they are purchased or dematerialized. It is
provided by two depositories – NSDL and CDSL respectively. Read more about the working, functions, and use of demat
account here.

Importance of Demat Account

A demat account is the best and most secured way of holding securities. It eliminates the risk of theft, forgery, loss and
damage of physical certificates. A demat account ensures immediate transfers of securities. Once the trade is approved,
the shares and securities are automatically transferred to your account. Automatic credit of shares can take place in the
event of a bonus received, company merger, consolidation, etc. You can trade on the go, from anywhere—through your
smart-phone or desktop. Hence, the need to visit the stock market to make transactions is eliminated. You enjoy the benefit
of reduced transaction costs as there is no stamp duty involved with the transfer of shares.

Types of demat account

Demat account helps you, as an investor, to hold shares and securities in an electronic form, instead of taking physical
possession of share certificates. There are two types of demat accounts—Repatriable demat account and Non-repatriable
demat account. Repatriable funds are deposited in a separate bank account known as the Non-Resident External Account
(NRE account). Repatriable funds are those funds which can be transferred abroad. The investments made from these
funds are maintained in a Repatriable Demat account. On the other hand, non-repatriable funds (amounts which cannot be
taken abroad) are deposited in a different bank account known as the NRO account. Investments made from these funds
are deposited in the Non-repatriable demat account. Money can easily be transferred from an NRE to an NRO account.
However, once the transfer is made, the repatriability is lost and thus cannot be transferred back to NRE account.

Demat account Meaning and Features

 Share Transfers: Investors can transfer their holdings through a delivery instruction slip (DIS) or receipt instruction slip
(RIS) for buying or selling shares. These slips allow users to provide all the details that are required for executing a
transaction smoothly.
 Dematerialization & Rematerialization of Securities: Demat account holders can provide instructions to their
depository participant (DP) to convert physical certificates into electronic form. Alternatively, electronic securities can also
be reconverted to physical form, if required.
 Pledging Holdings for Availing Loans: Several lenders provide loans against securities that are held in the demat
account of the borrowers. These holdings are used as collateral to provide loans to the account holders.
 Freezing Demat accounts: Demat account holders can freeze their accounts for a certain period, if required. This
option can be beneficial if one wants to prevent unexpected debit or credit into one’s demat account. The freezing option
is also available for a specific quantity of securities held in the account.
 Different Accessing Options: Demat accounts are electronic, which means these can be accessed using multiple
modes. These accounts can be accessed through the Internet using a computer, smart phone, or other smart devices.
 SPEED E-Facility: The National Securities Depository Limited (NSDL) allows users to send instruction slips
electronically instead of physically submitting the slip to the DP. This makes the procedure more convenient and less
time-consuming.
 Corporate Benefits & Actions: If the companies offer dividends, refunds, or interest to their investors, these benefits
are automatically available to the demat account holders. In addition, corporate actions like bonus issues, right shares, or
stock split are automatically updated in the demat account of all the shareholders.

Demat Account Benefits

The main benefit of a demat account is safety. Long-term investments can be safely and securely maintained over the
Internet. It eliminates the risk of holding shares and bonds in the physical form. The chances of forgery, duplication and loss
of share certificates are nil. Another important benefit of a demat account is convenience. You can trade online anywhere,
anytime through their online account. Opening an account significantly reduces brokerage charges, as stamp duty does not
have to be paid. The dematerization system also allows investors to buy, sell and trade without paperwork and delays. In
short, it helps in quick transfers, no lot size requirements to make transactions, reduced transaction costs, and is easy and
convenient.

 Lower Risks: Physical securities are risky due to thefts, loss, or damage. In addition, bad deliveries or fake securities
pose further risks. These risks are completely eliminated with the opening of a demat account, which provides holders
the option to hold all their investments in an electronic form.

 Easy Holding: Maintaining physical certificates is a tedious job. Moreover, keeping a track on their performance is an
added responsibility. Demat account holders can make it more convenient to hold and track of all their investments
through a single account.

 Odd Lots: With physical certificates, buying and selling were possible only in the specified quantities. The convenience
of dealing with odd lots or single security was also not available. Demat accounts eliminate this issue.

 Reduced Costs: Physical certificates involved several additional costs, such as stamp duty, handling charges, and other
such expenses. These extra expenses are completely eliminated with demat accounts.

 It allows you to conveniently manage your shares and transactions from anywhere
 Stamp duty is not levied on your electronic securities
 When you open demat account, it provides the convenience of working without paper
 It involves nominal brokerage fees
Opening a demat account is a prerequisite to enter the world of stock markets. Let us share the multiple benefits it offers.
You will first need to understand what a demat account is, its features and benefits.

Dematerialization Guarantees Convenience

 Demat account opening allows for uninterrupted management of share transactions as it functions electronically. It rules
out the need to be physically present to settle transactions

 Access to a demat account can be gained conveniently through a smart phone or computer.

Merging your Bank Account and Demat Account

 One of the benefits of a demat account is that it can be linked to your bank account
 This helps in facilitating easy transfer of funds electronically
Nomination Facility
 Providing a nominee is one of the key features of holding a demat account. This facility proves beneficial in the event of
an emergency

 Including a nominee will allow him/her to operate the account in your absence.

Safeguard Transactions
 Securities are credited and transferred by electronic means. Hence, the risks associated with paper securities, such as
fraudulence and theft, are averted.

 Conversion of securities into electronic equities deems you the legal owner of your shares. Succeeding which,
certificates need not be transferred to the company's registrar.

Demat Excludes the Need for Paper

 Handling your share trading online through a demat account, fore-fends the need to use paper. This proves effective for
companies reducing administrative hassles while also adhering to environmental norms by cutting down on its use.

Loan Approval
Existing securities like bonds and debentures can be used to procure a loan. Loan approval in a demat account is similar to
that in a bank.

Reduction in Transaction Costs

There is a marked decrease in transaction costs as the depository ensures that entitlements are directly credited to your
account.

Documents required for opening a demat

account
Proof of Identity (POI):
List of documents admissible as Proof of Identity:
 PAN card with photograph. This is a mandatory requirement for all applicants except those who are specifically exempt
from obtaining PAN (listed in Section D).

 Unique Identification Number (UID) (Aadhaar) / Passport / Voter ID card / driving license.
 Identity card/ document with applicant's Photo, issued by any of the following: Central/State Government and its
Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public
Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc.,
to their Members; and Credit cards/Debit cards issued by Banks.
Proof of Address (POA):
List of documents admissible as Proof of Address:
(*Documents having an expiry date should be valid on the date of submission.)
 Passport/Voters Identity Card/Ration Card/Registered Lease or Sale Agreement of Residence/Driving License/Flat
Maintenance bill/Insurance Copy.

 Utility bills like Telephone Bill (only land line), Electricity bill or Gas bill - Not more than 3 months old.
 Bank Account Statement/Passbook - Not more than 3 months old.
 Self-declaration by High Court and Supreme Court judges, giving the new address in respect of their own accounts.
 Proof of address issued by any of the following: Bank Managers of Scheduled Commercial Banks/Scheduled
Co-Operative Bank/Multinational Foreign Banks / Gazetted Officer / Notary public/Elected representatives to the
Legislative Assembly / Parliament / Documents issued by any Govt. or Statutory Authority.

 Identity card/document with address, issued by any of the following: Central/State Government and its Departments,
Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions,
Colleges affiliated to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members.

 For FII/sub account, Power of Attorney given by FII/sub-account to the Custodians (which are duly notarized and/or
apostille) that gives the registered address should be taken.

 The proof of address in the name of the spouse may be accepted.

Exemptions/clarifications to PAN
(*Sufficient documentary evidence in support of such claims to be collected)
 In case of transactions undertaken on behalf of Central Government and/or State Government and by officials appointed
by Courts e.g. Official liquidator, Court receiver etc.

 Investors residing in the state of Sikkim.

 UN entities/multilateral agencies exempt from paying taxes/filing tax returns in India.
 SIP of Mutual Funds up to Rs. 50,000/- p.a.
 In case of institutional clients, namely, FIIs, MFs, VCFs, FVCIs, Scheduled Commercial Banks, Multilateral and Bilateral
Development Financial Institutions, State Industrial Development Corporations, Insurance Companies registered with
IRDA and Public Financial Institution as defined under section 4A of the Companies Act, 1956, Custodians shall verify the
PAN card details with the original PAN card and provide duly certified copies of such verified PAN details to the
intermediary.

Information to be provided on Demat Account Opening Form:

 Name/s of account holder/s: All the names on the demat account opening form should be exactly the same as those on
the physical certificates to ensure seamless dematerialization of securities

 Mailing and communication address: The applicant’s address must be supported by a copy of one of the above-listed
documents. Non-resident applicants will have to provide address proof for both themselves as well as the constituted
attorney

 Guardian details for minor accounts: Guardians are only eligible to open a demat account in the name of a minor
applicant. He or she must sign the application form and provide his or her details along with the minor
 Bank account details: All bank details, such as name of bank, branch, MICR, and IFSC code must be provided at the
time of opening the demat account

 Nomination declaration: Beneficial owner/s can nominate another person to allow automatic transfer of all holdings on
the death of the account holder/s.

While only photocopies of the following documents are necessary for submission, originals will be need for verification
purposes.

Important Points and Guidelines while Opening a Demat Account:

 Self-attested copy of PAN card is mandatory for all clients.
 Copies of all the documents submitted by the applicant should be self-attested and accompanied by originals for
verification. In case the original of any document is not produced for verification, then the copies should be properly
attested by entities authorized for attesting the documents, as per the below mentioned list.

 If any proof of identity or address is in a foreign language, then translation into English is required.
 Name & address of the applicant mentioned on the KYC form, should match with the documentary proof submitted.
 If correspondence & permanent address are different, then proofs for both have to be submitted.
 Sole proprietor must make the application in his individual name & capacity.
 For non-residents and foreign nationals, (allowed to trade subject to RBI and FEMA guidelines), copy of passport / PIO
Card / OCI Card and overseas address proof is mandatory.

 For foreign entities, CIN is optional; and in the absence of DIN no. for the directors, their passport copy should be given.
 In case of Merchant Navy NRI's, Mariner's declaration or certified copy of CDC (Continuous Discharge Certificate) is to
be submitted.

 For opening an account with Depository participant or Mutual Fund for a minor, photocopy of the School Leaving
Certificate/Mark sheet issued by Higher Secondary Board/Passport of Minor/Birth Certificate must be provided.

 Politically Exposed Persons (PEP) are defined as individuals who are or have been entrusted with prominent public
functions in a foreign country, e.g., Heads of States or of Governments, senior politicians, senior
Government/judicial/military officers, senior executives of state owned corporations, important political party officials, etc.

Some of the basic documents that are mandatory for the creation of a demat account include:

 A duly filled Account Opening form

 Address proof
 Identity proof
 Passport-size photographs
To know more about the documents required to open a DEMAT account with Angel Broking, click here. Once the
documents are verified, you will get a unique ID number called the client ID, which helps the DP to assist you and safeguard
your securities.

There is no restriction on the number of depository accounts one can hold.

Demat Account Opening Procedures
1. Select a Depository Participant (DP) you would like to open your account with; this entity will serve as the intermediary
between you and the depository. DPs can be banks, brokers or online investment platforms.

Angel broking has been providing this service since 1987, and is registered with the Central Depository Services Limited
(CDSL), as well as being a member of BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).

2. Submit the form given to you for opening an account, the KYC form, passport size photographs, your PAN card
(Permanent Account Number), and other photocopied documents.

At this point or soon after, you will be given the option to name a person as your nominee. They will be assigned with the
responsibility of your shares if something were to happen to you. The choice of one’s nominee can be changed, if need
be in the future, by refilling the same form.

3. The KYC form also has the Depository Participant-Investor agreement which comprises the terms of agreement, rules
and regulations, and charges you will incur whilst holding a demat account. This form also includes the rights of the
investor and duties of the DP.

4. An In-Person Verification may be carried out by a person from your DP’s firm to ensure that the details provided by you in
the form are authentic.

5. Once your application has been processed and your DP has facilitated the opening of your account, he/she will give you
a Beneficiary Owner Identity (BOID) – a unique account number – that you can use during future transactions and to
access your account.

You need to open a Trading account along with the Demat account so that you can immediately begin buying and selling
shares.

Opening a demat account is the beginning of a hassle-free investing experience that involves neither the storage risks of
paper certificates nor the time consuming nature of offline trading.

Charges for Opening a Demat Account

The cost of opening a demat account at Angel Broking is nil. The annual maintenance charge is as per the account type.
Angel broking has various account types—Angel Classic, Angel Preferred, Angel Premier and Angel Elite.

a) The Angel Classic account is from a beginner's point of view. An investor has to pay Rs. 10,000 in the beginning, which
will be used by the investor for trading. The brokerage charge for online equity trading is 0.32% and offline equity trading
is 0.40%. Similarly, the brokerage cost for equity intraday trade/futures is 0.032% for online trading and 0.04% for offline
trading.

b) In an Angel Preferred account, an investor has to pay a minimum amount of Rs. 25,000. Brokerage cost is 0.224% for
online and 0.280% for offline trade in equity.

c) In an Angel Premier account, customers pay a low brokerage of0.176% through online equity delivery and 0.0176% for
intraday trading. The initial starting amount is high IE. Rs. 50,000 to Rs. 99,999.

d) Investors investing in Angel Elite account pay the least brokerage as their initial amount is high, i.e. 1 lakh and above.
How much time it takes to open a Demat Account?
With Angel Broking, it takes just 1 hour to open a demat account. You can actually start trading within the duration of an
hour. At the same time, the processing time might vary a bit depending on the verification of details provided in the Account
Opening form.
Details on the Account Opening form have to be verified by the depository participant (DP). Once the application is
processed, you will receive a welcome kit with details of the account number and password. You can access your account
using these details and begin trading in the stock market. Such an account can be opened with no minimum balance as well
as no balance of shares. Remember, you cannot trade in the stock market without a demat account.

Important Terminology to Understand

 Electronic certificate: Three important requisites while dealing in investments include bank account, demat account,
and trading account. When one purchases shares in a company, one’s ownership is marked through a certificate. This
is now available in an electronic format, which is seen as demat credit.

 Central Depository (CD): A central agency known as the central depository maintains all information related to demat
accounts opened with DPs across the country. These include the Central Depository Services Limited (CDSL) and
National Services Depository Limited (NSDL).

 Depository Participants: Several brokerage firms, banks, and other financial institutions offer demat accounts to
clients. The DPs are intermediaries between the CD and account holders.

 Transaction Identification: A trading account is as important as a demat account to deal in electronic securities.
Every account is provided with a unique identification number that is used for all transactions.

 Portfolio Holding: An investor can check all of his or her holdings through the demat account. This includes equity
holdings, government securities, bonds, exchange-traded funds, and mutual funds. When he or she purchases one of
these investment products, it is reflected as a demat credit. Sale transactions are debited from the demat account.

 No Minimum Balance Requirement: Unlike a bank savings account, demat accounts do not have any norms for
maintenance of minimum balance. The regulators do not prescribe any regulations that require maintaining a certain
number of securities in the demat account.

As it is now clear how useful demat accounts are, it is time to open on and reap the benefits.

Demat Account Charges:

Although, no charges are levied at the time of opening a demat account, there are certain charges applicable for its
operations. All these charges and fees are transparent and communicated to the account holders.

 No fees at the time of opening a demat account. All other charges are payable per month. It is important for the users to
bear in mind that any delay in the payment of these monthly charges may result in the freezing of their accounts. All
information related to these is available in the agreement signed at the time of opening a demat account.

 Users also need to bear in mind that the demat account charges are subject to changes as per the company’s discretion
under the provisions of the National Services Depository Limited.

 The values of various transactions would be as per the rates provided by the central depository or the actual value,
whichever is higher.
 Service tax and other statutory fees are levied as per prevailing rates.
 Annual maintenance charges will be applicable as per current guidelines.
 In the case of no transactions, the DP may not send quarterly transaction statements to the clients. For such demat
accounts, there will be no levy of the annual maintenance fees.

 Sole or first holders can opt for the Basic Services Demat account (BSDA) if the value of the security holdings does not
exceed INR 2 lakhs. If the BSDA is re-converted to a regular account (non-BSDA), all the applicable charges of such
accounts are levied.

 Dematerialization and re-materialization fees as per prescribed rates are applicable.

 Re-materialization or redemption of mutual fund holdings held in the demat account levy charges.
 Pledge charges, if securities held in the demat account are pledged in favor of the DP or another party, are applicable.

Evolution of Demat Account

Why dematerialization was needed?
 Handling of paperwork related to shares in physical format often led to errors and unforeseen mishaps in the past.
 Tracking records and share documents with respect to transfer and upkeep transactions was difficult
 The authorities in charge of updating these documents could not keep up with the increasing volume of share papers,
which, if left unchecked, could cripple the financial base of the Indian share market and related businesses.

A depository is responsible for the securities of a shareholder in the electronic form. These securities could be in the form of
bonds, government securities and mutual fund units, which are held by a registered Depository Participant (DP)

Currently, there are two depositories registered with SEBI.

 National Securities Depository Limited (NSDL)
 Central Depository Services (India) Limited (CDSL)
A DP is the agent of the depository providing depository services to traders and investors.

Process of dematerialization
 Dematerialization is started with opening a demat account. For demat account opening,you need to shortlist a Depository
Participant (DP) that offers Demat services. Learn about how to open a demat account.

 To convert the physical shares into electronic/demat form, A Dematerialization Request Form (DRF), which is available
with the Depository Participant (DP), has to be filled in and deposited along with share certificates. On each share
certificate, 'Surrendered for Dematerialization' needs to be mentioned.

 The DP needs to process this request along with the share certificates to the company and simultaneously to registrars
and transfer agents through the depository

 Once the request is approved, the share certificates in the physical form will be destroyed and a confirmation of
dematerialization will be sent to the depository
 The depository will then confirm the dematerialization of shares to the DP. Once this is done, a credit in the holding of
shares will reflect in the investor's account electronically.

 This cycle takes about 15 to 30 days after the submission of dematerialization request.

HOW TO USE A DEMAT ACCOUNT?

Opening a demat account has several benefits. Some of these include reduced paperwork, lower transaction settlement
time, cost savings, and safely holding all investments in one place.
Let us discuss, demat account meaning and using it to make the most of this account:

Dematerialize Securities
Historically, investments were held in a physical form, which was risky due to loss, theft, or damage. These have now been
eliminated as all physical certificates can be converted electronic forms, which are held in the demat account.

Re-materialize Securities
If the demat holdings need to be re-converted into the physical form, individuals can easily re-materialize their securities. A
re-materialization request form (RRF) must be submitted to the concerned depository participant (DP) for such
re-conversion.

Nomination Facility
Individual investors can identify any other person as nominee at the time of opening demat account. This ensures that in
the case of the death of the account holder, all the holdings in the demat account are transferred in favor of the nominee,
thus avoiding a long, cumbersome procedure.

Investing
Investors can invest in different financial products using a single demat account. These instruments include bonds, mutual
funds, exchange-traded funds, shares, and government securities. Investments in initial public offerings and systematic
investment plans are also possible through a demat account.

Tracking and Monitoring

Historically, tracking and monitoring all your investments under different asset classes was tedious and difficult. With a
demat account, monitoring and tracking all investments is convenient because all details are available at single location.
This allows the investor to determine the profit and loss he or she is making, which can help him/her make the right
investment decisions.

Statements
Account holders can receive periodic statements showing their current holdings. They can choose physical statements
mailed to their registered address or electronic statements through email.

Corporate Benefits
Receiving refunds, dividends, and interest payments is easier through a demat account because it is directly linked to the
bank savings accounts. This makes it quicker and simpler for companies to transfer funds to all their shareholders, which
also helps reduce related expenses.
Modifications
If the investor changes his or her address, bank or signature, he or she need not communicate such modifications to all the
companies where he or she has invested. Providing these changes to the depository participant for updates ensures the
information is made available to all the concerned companies.

Power of Attorney
When required, account holders can provide a power of attorney (POA) to another person. This POA allows the person to
operate the account on his or her behalf.

Transmission
All the investor’s holdings in the demat account can be transferred to the nominee, survivor, or legal heir, in case of the
investor’s demise through a transmission form.

Further information on what is demat account is and how to open demat account is available with Angel Broking.

OTHER IMPORTANT TERMINOLOGIES

Having understood the meaning of Demat account, let’s now look at certain few important terms related to demat account:

Transfer, Closure, cum Waiver (TCW)

Individuals can transfer their holdings from an existing demat account to another institution without any additional charge. If
they opt for this choice, the beneficiary owners’ (BO) accounts at both the transferor depository participant (DP) and
transferee DP are identical. If they wish to transfer a joint demat account, they will have to open the new one in the same
names.

Depository Concepts
A depository is a centralized location where all electronic securities are held. India has two such depositories, namely the
Central Depository Services Limited (CDSL) and the National Securities Depository Limited (NSDL). Under the
Depositories Act, individuals can avail these services through one of the DPs.

Securities’ Dematerialization
In this process, physical certificates are converted to electronic securities. All transactions are now executed electronically,
which makes it mandatory for investors to follow suit.

Dematerialization Credit
On receipt of the DRF and physical securities, the Registrar or Company processes the request. On successful completion,
an equal number of electronic securities is credited to the holders’ demat accounts. If the request is rejected, investors need
to contact the DP and seek assistance for the re-submission of a fresh DRF.

Transmission cum Demat

If the investment is held in a joint name of a deceased investor, surviving holder/s must submit the certificates, the death
certificate, and the Transmission cum Demat form to the DP. The names of all surviving holder/s must match the details on
the demat account.

Transposition cum Demat

If the names on the demat account do not match the names on the physical certificates, a Transposition cum Demat form
must be submitted to the DP to convert these into an electronic form.
Re-materialization
The electronic holdings are reconverted to physical certificates by submitting the Re-mat Request Form (RRF). The RRF
must be signed by all holders, verified by the DP and then submitted to the Company or Registrar.

Freezing and De-freezing

Demat account holders can freeze their accounts by submitting a request to the DP. To de-freeze the accounts, holders
must submit a request in the appropriate format as required by the DP.

Closure
A request form signed by all holders must be submitted. All holdings in the account must be transferred prior to closing the
demat account. In the case of pending dematerialization requests or corporate actions demat account, closure is not
possible.

With an understanding of the various concepts and the process of how a demat account works, users can start financial
planning through equity investing.
 DAY - 2
TRADING ACCOUNT
Similar to a bank account, a trading account acts as a common platform to sell or purchase securities. Securities are
purchased through a trading account, held in a Demat account, and payments are done through the linked bank account.
Prior to online trading, stockbrokers had the responsibility to buy and sell orders on their client’s behalf. Thanks to online
trading services, investors may now buy and sell orders at their own will, either online or by placing a phone call. The
client's instructions automatically get directed to the exchange through the individual’s stockbroker.
In order to buy and sell stocks, it is mandatory to have a trading and a demat account. A trading account is provided by a
stockbroker, and it allows a user to buy or sell securities. The trading account is linked to the bank account that provides the
necessary liquid cash to buy/sell securities.
Investors are allowed to have multiple accounts, based on their trading strategies. Multiple accounts may include a margin
account, an account for retirement savings, a buy-and-hold account for long-term stocks, and a day trading account
amongst others.

What is a Trading Account

 It acts as an interface between the investors’ bank and demat accounts
 Shares purchased through this account are credited to one’s demat account
 Sold shares are debited from the demat account and sales proceeds are credited to the bank account
 There is no restriction on the number of demat accounts that an individual can avail.

Importance of Trading Account

An online trading account helps you trade financial instruments through the internet. You can execute buy/sell orders at the
click of a mouse. It is easy to set up, and offers telephonic and online access. It contains a wealth of information about your
trading details. Hence, you can make financially sound decisions to increase profitability. Such an account provides
information on gross profit and loss. It also increases the speed of the execution and settlement of trade orders. You can
also make as many or as few trades as you desire. Moreover, the cost of online trading is lower compared to traditional
physical trading.

Types of Trading Account

There are many types of online accounts available for the purpose of trading securities, stock, gold, ETF’s, currencies, etc.
These include Online Forex Trading account, Online Commodities Trading account, Online Currency Trading account,
Online Equity Trading account and Online Derivatives Trading account. A Forex account is one which holds deposits in one
or more currencies for the purpose of speculation of movement in the foreign exchange market. The commodities market is
similar to that of a stock market, except that goods are traded instead of stocks. An online equity account allows you to
invest in IPOs, equity, mutual funds and currency derivative instruments. Derivative accounts help make profits by betting
on the future value of an underlying asset like currencies, stocks, exchange rates, etc.
Features & Benefits
Besides, the speed of transactions increases as everything can be done instantaneously. In a traditional set-up, one had to
contact his stockbroker, who would then negotiate the price with the trader and place the order. This would often result in
transaction delays. Online trading eliminates such issues. You can also monitor your stock as and when you wish, analyze
research reports, read finance news and trade even when you are on the go.

Features and Benefits of Trading Account:

 Buy or sell shares either on the phone or online
 Expert recommendations allow investors to access the best performers in various categories
 Regular market updates and free news alerts on successfully opening an online trading account
 Using the margin investing option, investors can increase their exposure on various shares
 A high-speed trading platform allows trading in the stock markets in real time without any delays to maximize profits
 gives you greater control to trust your own intuitions and take risks with your investments.
 You can have multiple accounts based on your trading strategies. Some may have a trading account for buying and
selling long-term stocks, retirement savings, margin accounts, etc. It enables you to set your own personal trading limits
and buy/sell orders as per your convenience.

 Orders can be placed during after-market hours using special facilities

 Expert research advice can be availed from an experienced team of analysts
 Easy to manage your stock portfolios without middlemen/brokers.
 It is easy to set up and offers telephonic and online access. An investor does not need to carry physical transactions in
order to buy/sell securities.

 It shows the relation between gross profit and sale. This helps to measure an investor’s profitability position.
 It also reflects the ratio between costs of goods sold and gross profits
 Investors are allowed to buy/sell stocks, gold ETF, Forex, ETFs, and Derivatives using a trading account.

Benefits of a Trading account

 Single Accessibility: By opting for the best trading account in India, investors can procure accessibility to all the stock
exchanges across the country through a single platform. Some of these exchanges include the Bombay Stock Exchange
(BSE), the National Stock Exchange (NSE), Multi Commodity Exchange (MCX), and the National Commodity and
Derivatives Exchange (NCDEX).

 Flexibility: Account holders can access their online trading accounts from anywhere, at any point in time. With browser
and application-based trading platforms, trading accounts can be accessed through a computer, laptop, smart phones,
tablets, and other smart devices.

 Seamless Transactions: The advanced technology ensures clients receive seamless transactional capabilities. The
entire process of transfer of funds and equities is completed without any hiccups. This provides clients the ability to invest
and save with convenience and ease, using a secure trading platform.

 Access to Reliable Research: To succeed in equity and other investing, having access to reliable research reports
prepared by experienced and knowledgeable professionals is extremely helpful. Such reports are often supplied by the
 service providers, which makes it easier to make informed investment decisions. This can significantly increase the
possibility of earning higher profits through investments.

 Personalization and Alerts: Customers can access personalized customer support from trained executives in case they
are facing any technical issues with their trading accounts. Moreover, clients can set personal alerts through messaging
or emails, which means they do not miss out on their buy and sell targets.

 Multiple Media: Placing orders through the online account is beneficial in streamlining the entire process. The different
ways of accessing the account allow investors to trade during market hours as well after-market hours, if the need so
arises.

Selecting the Best Trading account in India

 Based on the transaction frequency, a reliable platform that provides cost efficient and affordable service charges should
be considered

 A service provider that offers a complete and comprehensive solution to meet various needs for trading on the equity
markets should be chosen

 Consider long-term requirements beforehand, because most transactions, such as transfer from one demat account, are
chargeable

 The best trading account in India will provide advanced technology platforms to provide access anytime, anywhere.
Moreover, there will be almost no downtime, which could restrict trading capabilities

 Working with a service provider that offers reliable and efficient services is crucial to ensure that one can trade without
any trouble. In addition, the customer servicing executives of the chosen service provider must be trained and able to
provide quick and effective solutions to any issues that may crop up

Procedures to Open a Trading Account online

 The first step involved in opening a trading account is selecting a SEBI-registered stockbroker. A broker with a valid
registration number that is issued by SEBI is necessary to open a DEMAT accounts. Angel Broking offers Demat and
Trading account to eager traders, to know more about how to open trading account with Angel Broking, Click here.

 In order to open a trading account, an individual has to submit a ‘Client Registration Form’ and other documents as
prescribed by SEBI - the regulator for the securities market in India. An Account Opening form and Know Your Client
(KYC) documents must be submitted along with the investor’s identity and address proofs.

 The details will then be verified through a phone call or an in-house visit
 After verification, the account will be processed and the investor will receive his account details

Documents required
The basic documents required for opening a trading account are:

 Account Opening form

 Photo ID proof: PAN card / Voter's ID / Passport / Driving license / Aadhaar card
 Address proof: Telephone bill / Electricity bill / Bank statement / Ration card/ Passport / Voter's ID / Registered lease or
sale agreement / Driving license

Due diligence and rate structure

 Before opening an account with a stockbroking company, consider the services it offers as well as its pricing structure.
You may be expected to pay a processing fee at the start.

 Certain broking companies offer discounts depending on the trade activity and its frequency. This is an added advantage.
If your chosen broking account has this feature then you may stand to benefit from this.

 Established stockbroking companies will have dedicated websites and forums to interact with customers. Extract the
contact details from the website to get further details into the process.

Inquiries pertaining to opening an online trading account

 Inquiry about the procedure may be facilitated through contact with a company representative, who will provide you
accurate details and resolve doubts

 Companies often provide the comfort of having the documentation completed at your home. In this case, the
representative will bring along the Account Opening and the Know Your Client (KYC) forms.

Submitting an application
 In addition to submitting the duly filled Account Opening Form, you will be expected to furnish documents that establish
your identity and address

 On completion of this step, a verification process will be conducted either through a phone call or representative visit

Application acknowledgment
 Necessary documentation and verification will be followed by giving you access to your account
 The company will provide trading details using which you may participate in market operations
 The unique trading ID is necessary for trading in stocks

Linking of trading and demat accounts

 A trading account is different from a demat account. While the latter only retains shares and securities, the former
facilitates their sale and purchase

 Shares purchased through a trading account may be deposited into the demat account. Existing shares may also be
withdrawn from a demat account and sold through a trading account.

 To avoid the process of verification each time, it is recommended that you link your trading account to your demat
account. This may also simplify trading.
 After the order has been sanctioned, shares are either removed from or deposited to your demat account.
By registering with Angel Broking, you may avail of one of the best trading accounts in India.

How to Place a Buy Order

 Login to the trading account and place the order to buy the shares through one of the stock markets
 The transaction is processed by the selected exchange and is based on the price and other factors. The transaction is
then completed

 At the time of settlement, shares are directly credited into the demat account linked to the trading account

Selling Shares
 Select the shares and quantity to sell from the stock holdings
 Place the order on the selected stock exchange
 Transaction is processed by the equity exchange
 Shares are directly debited from the linked demat account

Open a Trading account

 Select a firm or broker
 Make a comparison on the service offerings and brokerage charges
 Contact the selected service provider
 Submit application form and related documents (proof of address and identity)
 Undergo the verification procedure
 Avail the trading account details
 Start transacting
Online share trading makes investing in different financial products convenient and easy. It provides a single platform to
meet all of the investors’ requirements.

DIFFERENCE BETWEEN TRADING ACCOUNT

AND DEMAT ACCOUNT
With share certificates becoming obsolete, having a trading and demat account has become a necessity if one wishes to
trade shares in the Indian Stock market. Using these two accounts, investors can buy and sell shares as per their
convenience.
Nature
Shares that are bought and sold are stored in dematerialized accounts, or demat accounts as they are better known.
A trading account, on the other hand, serves as an intermediary between your bank and demat account. It takes the shares
held in the demat account and sells them in the stock market.
Thus, while a demat account resembles your savings account, that is, a storage facility; a trading account is your current
account for stock market purchases.

Differentiated function
A demat account is a facility that retains financial instruments such as shares and securities. It can also be used for the
re-materialization, that is, the conversion from electronic to physical form, of securities. The very act of buying and selling is
done with a trading account.

If you wish to trade only futures and options and currency, you need only a trading account. However, if it is stocks you wish
to trade, you will require both trading and demat accounts.

Role in the trading process

When you buy a share using your trading account, money is transferred out of your bank account and the share is
transferred into your demat account. When you sell a share, the share is taken out of your demat account, sold in the stock
market and the money obtained from the sale is transferred into your bank account.

Charges incurred by the investor

There is no legal limit on the number of demat or trading accounts a person can hold using one PAN card. You can hold
more than one demat or trading account with the same or different Depository Participant or broker respectively.

If you wish to possess more than one demat account, you will incur an Annual Maintenance Charge (AMC) for every
account, irrespective of whether you actually make use of each. Along with this, you will also have to bear the cost of
custodian and transaction fees. Apart from the initial cost of opening a trading account, you will incur no extra charges if you
have more than one trading account.

Prerequisites for opening of an account

In order to open a demat account, documents such as your voter’s ID and PAN card must be furnished. In contrast, to open
a trading account, possession of a demat account is the only prerequisite.

Within the comfort of one’s home, trading and demat accounts ensure safe and convenient share trading.

NRE, NRO, NRI TRADING ACCOUNT IN INDIA

Non-Resident Indians (NRI) are allowed to purchase stocks and convertible debentures of a domestic organization through
stock exchanges. Such investments can be made under the Portfolio Investment NRI Scheme (PINS) either on repatriation
or non-repatriation basis.

NRI Trading Account

The guidelines of the Reserve Bank of India (RBI) mandate NRIs to open a trading account with a designated institution
authorized by the RBI. They must avail either a Non-Resident Ordinary (NRO) or Non-Resident External (NRE) account to
route the various investments.
Types of Accounts
 PINS Account: This account allows the buying and selling of equities through the Indian stock exchanges. This can be
further classified as NRE and NRO PINS accounts. NRE PINS allows transactions where the funds can be repatriated to
foreign countries. On the other hand, NRO PINS account does not allow fund repatriation for executed transactions.

 NON-PINS Account: This kind of account is used for investing in Initial Public Offerings (IPO) or investments made in
mutual funds and as residents. This is, again, classified as NRE and NRO Non-PINS account. Transactions made
through NRE can be repatriated, while NRO transactions cannot be repatriated. Moreover, the NRO Non-PINS accounts
allow trading in futures and options.
A PINS account works similarly to an NRE account. Even when NRIs have an NRE account, a separate PINS account is
mandatory for trading in equities. It is important for users to remember that an NRI can maintain only one PINS account at
any point in time.

Bank Branch
PINS accounts can be opened only at the designated branches of dealers that are authorized by the RBI under the PINS.
The addresses are available on the websites of the various authorized dealers.

Application Form
To avail the PINS account, users need to fill and submit an application form to the designated branch of an authorized
dealer. Moreover, while submitting the application, clients must provide all details relating to any transactions done in the
primary markets. A PINS demat account form must also be submitted along with the application form.

Documents
While opening an online trading account, the NRI customers need to submit a copy of their passport, employment visa or
work permit (as applicable), and their address proof. In addition, a PINS permission letter from the authorized dealer, PAN
card, photographs, and proof of depository and bank accounts are required to be submitted along with the application form.

Making Payments for Purchases

With the knowledge on what is a trading account, NRIs must also understand how payments for their investment purchases
must be made. Payments for investments made on a repatriation basis is completed through an inward remittance through
regular bank channels or through funds maintained in the NRE account. If the purchases are on non-repatriation basis, the
payment can be made through funds retained in the NRO account.

Remittance of Sales Proceeds

Shares sold under repatriation basis can be credited to the NRE or NRO accounts of the investors. On the other hand,
funds received for the sale of securities on non-repatriation basis can be credited only to the NRO accounts of the investors.

Transfer of Shares
All shares purchased through NRI trading accounts can be sold only in Indian equity markets. Any arrangements under
private sale or gift are not allowed by the RBI guidelines.

With RBI allowing equity investing for NRIs, institutions are offering different products to meet the increased demand. The
flexibility offered by these various trading accounts ensures NRIs can find one that suits their requirements to invest in the
Indian stock markets.
 WHY YOU NEED A TRADING ACCOUNT
A trading account helps you trade financial instruments like equity, stock, currencies, Forex, commodities, etc. Nowadays,
trading accounts are held by investors online. It helps you conduct buy/sell transactions at a click of the mouse. A trading
account also contains a wealth of information about your trading details. Hence, you can make financially sound decisions
to increase profitability. Such an account provides information on gross profit and loss. It also increases the speed of the
execution and settlement of trade orders. You can also make as many or as few trades as you desire. Moreover, the cost of
online trading is lower as compared to traditional physical trading. A trading account is easy to set up and offers telephonic
and online access.

What You Can do with a Trading Account

An online trading account enables you to transact anywhere and anytime. You can place buy and sell orders without the
assistance of a broker. You don’t have to rely on your broker to make transactions. You can also have multiple accounts
based on your trading strategies, such as a margin account, retirement account, commodities account, etc. With the help of
an online trading account, you can monitor your investments in real-time through the online interface. You can log in to your
account through your phone or computer. You can also analyze research reports, real-time stock quotes and trending
stocks, and build your financial future on this wealth of knowledge.

Opening A Trading Account with Angel Broking

Opening an online trading account with Angel Broking gives you the privilege to enjoy ‘Angel benefits’. You will also get
updates on profit-making on the basis of price fluctuations and market news, even at night. The 1987-founded financial
company assures easy trading in liquid markets. Opening an online trading account at Angel Broking assures efficient
money management and lower brokerage fees. Intraday traders can create short position in the cash segment if they have
a bearish view on the stock. This stock-broking and wealth management company also provides free access to multiple
online trading products. Be rest assured that you will get a dedicated customer service representative at your disposal for
advice or help.

How Much Money You Can Save

According to the latest update, Angel Broking is offering lifetime free demat accounts and free trading apps. A 20% discount
is offered on online trades with leverage of up to 40 times. Demat account opening fees is nil. In order to open demat
account with Angel Broking, you can visit their site www.angebroking.com and fill up the Account Opening form. You
can open a demat account and trading account for trading in securities, stock, gold, ETF's, currencies, etc. Angel Broking
offers the following products for trade—online Forex Trading account, Online Commodities Trading account, Online
Currency Trading account, Online Equity Trading account and Online Derivatives Trading account. Through these accounts,
you can trade online at your own convenience either through the web or your smart phone. You can execute buy/sell orders
at the click of a mouse.

How Much Time You Can Save

The time taken to open an online trading account depends on the processing time. Usually, it takes a week to receive your
online trading details. You need to fill an Account Opening form at the desired bank/broker. Along with the duly filled form,
you have to submit the required Know Your Customer (KYC) documents. These include identity proof, address proof and
recent passport-size photographs. The broker will conduct a verification process either by a telephonic call or by an
in-person house visit to confirm the details provided on the Account Opening form. The trading account will be activated
only if all the information provided is correct. The applicant then receives a client kit which contains login details like ID and
password, customer care details, etc. Once you’ve received you user ID and password, you can login through your account.
Remember to change your password for security reasons.
Angel Broking does not does not charge any fee for opening an online trading account.
FAQs - Trading Account
Why should I open a trading account with Angel Broking?
Angel Broking offers the best financial services with respect to trading accounts. The charges for opening a trading account
are nil. It also provides expert trading tips so that you can make profitable investment decisions. Angel Broking offers
convenient trading on smart-phones and web through the Angel Swift and Angel Lite apps. You can make transactions on
your phone and tablets through Angel Swift. Angel Lite is the mobile browser-based trading tool. Through an Angel Broking
trading account, you can trade various products, including commodity trading, equity trading, derivatives trading, currency
and Forex trading, life insurance and mutual funds.

Am I eligible to open a trading account?

Any individual can open a trading account as long as he has an identity proof and an address proof. These documents are
necessary while opening a trading and a demat account. You can provide your voter’s ID, PAN card, driver's license,
passport or bills as identity proof. As proof of address, ration card, driving license, bank passbook, voter’s ID, electricity bill,
telephone bill, etc. can be submitted. You should also have a savings account as it is needed to transfer/receive money
when you buy/sell shares through your trading account. It is advisable to open a trading account once you are well versed
with the fundamentals of trading.

How can I open an online trading account?

The first step to open an online trading account in selecting a broker or a firm. Make sure that the broker/firm is registered
with the Securities & Exchange Board of India (SEBI). Select the best service provider based on its reputation, service
provided, security, brokerage fees and consultancy services. Once you’ve finalized the broker, fill the Account Opening
form either online or collect it from the branch. Along with the duly filled form, submit the required KYC documents, such as
your identity proof and address proof. Post verification of the application, you will receive your trading account details. You
can then make online transactions and manage your stock portfolios as per your convenience.

How long does it take to open an online trading account?

The time taken to open an online trading account depends on the processing time. With Angel Broking, it takes just 1 hour
to open a demat account. You can actually start trading within the duration of an hour. At the same time, the processing
time might vary a bit depending on the verification of details provided in the Account Opening form.

Sometimes, applicants may face issues during the application; e.g. some may enter a different address in their Account
Opening Form and their address proof may have a different address. In such cases, the verification process make take
longer than expected, thus causing a delay in the opening of the account. Once, the verification of documents is done, a
welcome kit is dispatched to you with your trading details.

How many bank and depository accounts can I link to a trading account?
You can link as many trading accounts as you have to a demat account, provided that your stockbroker has the Power of
Attorney (PoA) for that demat account. It is necessary for the stockbroker to have PoA, as shares can then be pulled from
the client’s account. When you purchase shares, you have the option of sending the shares to the same demat account
through multiple trading accounts. However, while selling, you can do so with one trading account (the account for which
the PoA is mapped with demat).

There are not many advantages of opening multiple trading accounts, except that brokerage charges are less. Instead, you
have to keep track of multiple accounts, access your accounts through multiple platforms, and check multiple P&L
statements, which may not be feasible.
 ONLINE SHARE TRADING
Online share trading involves buying and selling of stocks through online platform. Using the online share trading account,
you may buy or share stocks, mutual funds, bonds, and other securities easily, without the need of intermediate broker or
agent.

Online Share Trading for Beginners

Share trading can be profitable if investors know the fundamentals of trade. The best way for a beginner to succeed in the
share market is research. Research the best stockbroker who charges a low commission and yet provides the best services
in terms of user-friendly interface, customer service, etc. Also, research your stock picks before placing a buy/sell order.
Look at a company’s EPS, financial statements like P&L accounts, profit margins, future growth plans, etc. before investing
in their shares. In the beginning, avoid highly volatile types of instruments, like futures and options. Another helpful tip while
trading in the share market is discipline. Set your desired profit and stop-loss margins. Stop trading when you’ve reached
these margins. It helps you to limit your loss as well as prevents you from being too greedy.

Instruments Traded in Indian Share Markets

Instruments ranging from equities and IPOs to derivatives are traded at the stock market. Different instruments are traded
by various online trading exchanges. The National Stock Exchange (NSE) and BSE Ltd. trades derivatives (Interest Rate
Derivatives, Equity Derivatives, Global Indices Derivatives and Currency Derivatives), capital market (mutual funds, IPOs,
traded funds, equities, stock lending and borrowing, debentures), debt market (corporate bonds, retail debt), etc. MCX
Stock Exchange Limited (MCX-SX) deals with capital markets. Multi Commodity Exchange of India Ltd (MCX) and National
Commodity & Derivatives Exchange Limited (NCDEX) offer commodities trading like gold, metals, agro-commodities,
bullion, etc.

WHAT IS ONLINE TRADING & HOW TO DO IT

Stock trading can be financially rewarding if done in the right way. Investing in the stock market involves riding the various
ups and downs of the market. Since the introduction of online trading, investing in the stock market has become simple and
convenient. Stock market trading is a great alternative, when it comes to long term wealth creation. Although, it might take a
while for you to hone your skills,

What is Online Trading

Online trading involves the trading of securities through an online platform. Online trading portals facilitate trading of various
financial instruments such as equities, mutual funds and commodities. In India, the BSE provides online trading system
known as BOLT, while the NSE trading system is known as NEAT (National Exchange For Automated Trading).

How to Trade Online

 Open Demat and Trading Account: - To begin trading online you need to open an online trading account with an online
broking firm. While opening a demat account online, ensure that the brokerage firm is reliable and works for a low
brokerage cost. Also, it is essential to choose a broker who is a registered member of all the stock exchanges and is
certified by the SEBI.

 Learn all the Stock Market Basics: - The stock market functions on the system of supply and demand. Learning to
trade begins with gaining more knowledge about the share market investment. Keeping tabs on financial news and
websites, listening to podcasts and taking up investing courses are all excellent ways to become an efficient investor.
 Practice with an Online Stock Simulator: - Online stock trading simulators are a great way to learn online trading.
Since it is a simulator, the losses you make would not affect you, hence you can learn trade without any fear.

 Form a Plan: - While you trade, it is very important to think through your investment strategies. Decide in advance how
much you are willing to invest in a particular company and set limits on the amount of loss you are willing to bear.

If you bear all these point in mind online trading could probably be an easy and profitable task for you. Practice is the key to
successful online trading. Stock trading is a long-term investment and requires patience and perseverance.

It involves buying and selling of securities such as stocks, bonds, and other related financial instruments online. For this
purpose, you will require a demat account and a trading account. A demat account acts as the common repository to store
the purchased units of stocks whereas the trading account acts as the platform to buy and sell share. A bank account is
linked to the trading account to facilitate funding of trade.

ONLINE SHARE TRADING TOOLS & PLATFORMS

The best online trading accounts provide much more than the convenience of trading. These accounts include various tools
and platforms to provide users access from anywhere, making the entire procedure versatile.

Platforms for Online Trading

 Website: Users can access their online trading account through the service provider site. Using the log-in name and
password, traders can procure access to all the different services offered by the service provider. Most service providers
offer access to the trading accounts through smart phones and other devices, such as tablets and IPad. Some of the
service providers offer specially designed websites for account-holders who use slow Internet connections.

 Dealer-Assisted Trading: Experienced and qualified dealers will assist the account-holders to oversee their online
share trading and provide guidance on making the right financial decisions. Moreover, users can call the dealers and
complete trades on the phone. The dealers answer customer queries and offer the right financial advice to help users
grow their capital and meet various financial goals and objectives.

 Call and Trade: If the users do not have access to their computers, they can call to place their trades. The
account-holders can place any number of orders and can deal in any segment, including cash, derivatives, and initial
public offerings. Contrary to belief, the call and trade platform is completely secured because users have to pass through
several levels of verification ensuring no frauds can occur.

All the above platforms provide convenience and flexibility to the online stock trading account-holders. Moreover, it makes
the entire procedure significantly less cumbersome and greatly reduces the need for completing the necessary paperwork
related to stock market trading.

Tools for Online Share Trading

 Portfolio Tracker: Using the trading account, users can easily track the performance of their entire investment portfolio
at a single location. They can stay abreast of the market movements and can place alerts to receive timely notifications,
enabling accurate decision-making. In addition, account-holders receive automatic updates on each transaction. The
portfolio tracker allows the users to analyze their holdings and determine the realized and unrealized gains. They are also
able to maintain the ledger, contract notes, and other things related to stock market investing.

 Research Reports: Availing an online trading account with a reliable service provider gives access to excellent research
and analysis undertaken by experienced and trained professionals. Users can also learn about market statistics, such as
 top losers and gainers, daily highs and lows, and buyers and sellers to make their investment decisions. The wide
amount of research provides account-holders all the knowledge they need to trade on the stock markets.

 Tracking: The online stock trading account allows the users to manage their accounts in an efficient manner. They can
not only track their portfolio performance, but also track the order status, trade book, and net positions. The
account-holders can keep an eye on all their investments in one place, which makes it convenient and efficient.

 Stay Informed: Users can stay informed on market trends and occurrences through the live updates offered by the
service providers. In addition, they can set alerts and receive reminders through emails and SMS about their preferred
investments to make the appropriate decisions.

Because every customer has unique needs, the service providers offer different platforms and tools to enhance their online
trading experiences. Each account-holder can avail these services as per his preference and requirements.

HOW TO START YOUR ONLINE TRADING

PORTFOLIO
Online trading is a technically advanced platform allowing investors to trade using the Internet. The orders are routed
through trading members (broking companies).

Steps to Trade Online

 Firstly, investors must identify trading members that provide online stock trading services and register with them:
 Most medium- and large-sized broking companies provide such facilities
 Details of these companies can be availed through the National Stock Exchange website
 Check references of various trading members and select a company with a good reputation
 Opting for a broking company that provides multiple services on a single platform will be beneficial
 While making the choice, users must consider the level of technical support available, in case of any difficulties
 Submit Know-Your-Customer documents that include proof of address and identity along with member-client agreement that
outlines the various terms and conditions for online share trading

 On receiving the log-in name and password details, traders can commence trading; it is advisable to modify the default
password to avoid any hacking risks.

Understand the Trading Platform

Every trading member offers a demo to help new traders understand the entire procedure of online trading, various tools
that are available, and other related things. It is recommended for beginners to go through this demo to comprehend the
world of online share trading.

Users can also take advantage of the information available on the website of the trading members. In addition, they can
read the frequently-asked questions to gain a further understanding on how to trade using the Internet. If the users still have
any queries, they can take help from the customer executives. Most of the trading members offer short-term training
modules to help clients understand more about stock markets and investing.
Start Trading
An important point to remember is that to start online stock trading, having a demat account is mandatory. Choosing
the trading account and demat accounts with the same service provider makes it more convenient for the users to keep
track of all their investments.

Investing in the stock market is not a game and has several inherent risks. Knowing some basics before beginning to invest
in real-time can be beneficial.

 Investors are advised to start with small amounts that they can afford to lose, in case the market is not favorable to them;
it is better to avoid investing by selling assets or borrowing

 Traders, especially beginners, must avoid timing the market; more people invest as the price increases and as people
start selling for booking profits, the price falls quickly. It is generally seen that investors make the mistake of selling the
stock as soon as the price begins to decline, which must be avoided

 Before one starts online trading, gaining some knowledge of technical and fundamental analysis will be beneficial and
helps traders understand oscillators, averages, patterns, and trend lines to make informed decisions

 Most of the trading members offer research reports and analyst recommendations, which can be beneficial in making
good investing decisions.

Traders must observe the market trends without taking too many risks and develop their own strategies. Constantly
modifying these to meet the changes and retesting these will help earn profits in the stock market. It is important to avoid
losing confidence in case traders incur losses on their trades.

ONLINE VS OFFLINE SHARE TRADING

An online trading account is linked to a bank account and a depository participant (DP). Some of the trading members
provide three-in-one accounts. These include the demat account, bank account and the trading account, all of which are
availed through the same agency. This is beneficial because users can transfer money for purchases and redeem sale
proceeds on selling investments held in your portfolio easily.

Steps for Internet Trading

 Gain an understanding on how to place orders, modify, and cancel these
 Acquire knowledge on verifying ledger balance, availing information on the transactions and learning how to use the
trading software

 Understanding how to transfer funds from and to the trading account.

An offline trading account is generally opened with a broking agency. Orders are either placed by physically visiting the
service provider or through the telephone. Generally, this option is used by high net-worth individuals and traders who
require quick and professional execution of large trades. It is beneficial to choose a broking service provider that is good at
executing large orders and that proactively shares valuable information with the clients. Moreover, working with a broking
agency with several years of market experience will be advantageous.

Differences between Online and Offline Trading Accounts

 Trading: With an online share trading account, the users can place their own orders. On the other hand, an offline
account means that users need to avail the services of a broker to place orders. Instructions are specifically given to the
 brokers in an offline trade, which creates dependence on the broking agency. Such dependence is non-existent when
you choose to trade through an online account.

 Convenience: An online stock-trading account is a good option for people who have an Internet connection and track
their orders from the convenience and comfort of their homes or offices. In case users are not able to access stock
broking sites or do not have access to an Internet connection, placing orders on the phone with their brokers is more
advisable.

 Fraud: Because online share trading provides users complete control over the transactions, the risk of potential frauds
is eliminated. There are certain instances when the brokers execute trades on behalf of their clients without receiving
permission, which can cause significant losses to the users who choose offline trading.

 Expertise and Knowledge: When users opt for an online stock trading account, they may get carried away. Without
doing proper research and understanding more about how the stock market works, they may buy or sell shares, which
can result in huge losses. This is avoidable with offline trading because the brokers have several years of experience and
knowledge, which can be beneficial for users as they receive accurate guidance through the broking service providers.
Fortunately, most of the agencies that offer online trading services offer access to research reports and other technical
and fundamental analyses to assist account-holders to gain a deeper understanding to make the right investment
decisions.

ONLINE STOCK TRADING TIPS FOR THE INDIAN

SHARE MARKET
Share trading is about buying and selling shares in the stock exchange. Online trading is when shares are traded using a
computer and Internet connection with demat account and trading account. Investors who wish to trade on their own often
opt for this kind of trading facility.

Things to Know Before Online Share Trading

 Awareness of the Stock Market: It is crucial for users to have awareness on the working of the stock exchanges and
trading. In addition, traders must be well-versed and comfortable in using the online trading platform and the various
tools that are offered by service providers to maximize the potential.

 Stay Abreast of Changes in the Market Conditions: Being updated on news related to the stock markets, companies, and
the economy is important. It is common for stock markets to react to any kind of news, and being updated will be
beneficial in helping you make the appropriate investment decisions.

 Study the Broking Agency Site: Most of the renowned online stock trading agencies offer research reports and other
beneficial information for their users. Account-holders are advised to take the time to study these various resources to
gain knowledge and thus benefit from stock market investing.

How to do Online Trading

 Trading Account: Choose one of the several broking firms to avail an online account that allows you to trade on the stock
markets.

 Computer and Internet Connectivity: Most people today have a computer and an Internet connection. Both these things
are necessary to start trading online.
 Log-in and Start: Using the user-name and password, users can log in to their accounts and commence trading. Going
through the demonstration and seeking clarifications from the executive before placing real orders will be beneficial and
can save users from possibly expensive mistakes.

Tips to Choose Reliable Online Stock Trading Broking Firm

 Broking Charges: Most people prefer working with agencies that charge the lowest brokerage. However, their services
may not be reliable and the trading platform may not be up to the mark. Checking the trading platform and considering
the fees while making the choice is advisable.

 Ease of Use Before creating the account, checking the demo, and understanding the trading platform and the ease of its
use is important. Traders will maximize their benefits by choosing software programs that are comfortable for them to use
and easy to understand.

 Research Services: Opting for an agency that provides free research and analysis by experienced and trained
professionals will help you make better profits through stock market investing.

Tips for Online Stock Trading

 Stock traders (especially beginners) must invest only a small amount of capital that they can afford to lose
 Studying the basics of the stock market and online trading is important
 Gaining some insight to technical and fundamental analysis to choose the right stocks for investing is advisable
 Traders must limit their interests to a few sectors, and staying updated about all the occurrences in these is beneficial
 Using various tools, such as portfolio tracking, alerts and reminders, and other related resources will help traders make
the right investment decisions.

Online trading provides convenience and several other benefits. However, before commencing the use of these trading
platforms, doing the research is crucial.
 DAY - 3
INTRADAY TRADING
Intraday trading involves buying and selling of stocks within the same trading day. Here stocks are purchased, not with an
intention to invest, but for the purpose of earning profits by harnessing the movement of stock indices. Thus, the
fluctuations in the prices of the stocks are harnessed to earn profits from the trading of stocks.
An online trading account is used for the purpose of intraday trading. While doing intraday trading, you need to specify that
the orders are specific to intraday trading. As the orders are squared off before the end of the trading day, it is also called as
Day Trading.

How to Go About Intraday Trading

It is important to understand the fundamentals of intraday trading in order to make consistent profits. A good tip is to trade
with the current market trend. If the market is falling, sell first and buy later, and vice versa. Make an intraday trade plan and
stick to the plan. Set your desired profit and stop-loss limit. Do not be greedy. Instead, book your profits at regular intervals.
Maintain stop-loss levels. It helps you to limit your loss if the market does not perform. Also, choose highly liquid shares and
trade in a small number of shares at a time, if you are not a seasoned trader.

Basic Rules of Intraday Trading

An unexpected movement can wipe all your investment in a few minutes. Hence, it is important to keep in mind the basic
rules while carrying out intraday trading. Do not trade in the first hour as the opening range is established during that time.
The fluctuations of this range can help to identify the intraday trend. Move with the market trend as it allows potential for a
greater profit if the trend continues. Another basic rule is to fix entry price and target levels. Set a stop-loss limit so that your
losses will be curtailed if the share drops. Also, withdraw if your desired profits are met. Stick to your plan and carry trade in
a disciplined manner.

Intraday Trading Tips

Intraday trading is riskier than investing in the regular stock market. It is important, especially for beginners, to understand
the basics of such trading to avoid losses. Individuals are advised to invest only the amount they can afford to lose without
facing financial difficulties. A few intraday trading tips will help you learn the art of trading.

Intraday Trading indicators

When it comes to booking profits in intraday trading, you will require to do a lot of research. For the same purpose, you
need to follow certain indicators. Often intraday tips are believed to be the Holy Grail; this, however, is not entirely
accurate. Intraday trading indicators are beneficial tools when used with a comprehensive strategy to maximize returns.

How to make profit in intraday trading

Intraday traders always face inherent risks that exist in the stock markets. Price volatility and daily volume are a couple of
factors that play an important role in the stocks picked for daily trading. Traders must not risk over two per cent of their total
trading capital on a single trade to ensure the right risk management. So here are a few tips shared to make profit in
intraday trading.
Intraday Time Analysis
When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on
a one-day interval. These charts are a popular intraday trading technique and help illustrate the movement of the prices
between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can
be used. Know about some of the most commonly used chart.

How to Choose Stocks for Intraday Trading

To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make
profits because they fail to select appropriate stocks to trade during the day. Choosing the right stocks to book profits is an
art that you will learn with experience. For beginners, here get some tips to choose stocks for intraday trading.

Choose Two or Three Liquid Shares

Intraday trading involves squaring open positions before the end of the trading session. This is why it is recommended to
choose two or three large-cap shares that are highly liquid. Investing in mid-size or small-caps can result in the investor
having to hold these shares because of low trading volumes.

Determine Entry and Target Prices

Before placing the buy order, you must determine your entry level and target price. It is common for a person’s psychology
to change after purchasing the shares. As a result, you may sell even if the price sees a nominal increase. Due to this, you
may lose the opportunity to take advantage of higher gains because of the price increase.

Utilizing Stop Loss for Lower Impact

Stop loss is a trigger that is used to automatically sell the shares if the price falls below a specified limit. This is beneficial in
limiting the potential loss for investors due to the fall in the stock prices. For investors who have used short-selling, stop loss
reduces loss in case the price rises beyond their expectations. This strategy ensures emotions are eliminated from your
decision.

Book Your Profits when Target is Reached

Most day traders suffer from fear or greed. It is important for investors to not only cut their losses, but also to book their
profits once the target price is reached. In case the individual thinks the stock has a further possibility of rising in price, the
stop loss trigger must be readjusted to match this expectation.

Avoid being an Investor

Intraday trading, as well as investing, requires individuals to purchase shares. However, factors for both these strategies
are distinct. One kind adopts fundamentals while the other considers the technical details. It is common for day traders to
take delivery of shares in case the target price is not met. He or she then waits for the price to recover to earn back his or
her money. This is not recommended because the stock may not be worthy of investing, as it was purchased only for a
shorter duration.

Research your Wish list thoroughly

Investors are advised to include eight to 10 shares in their wishlists and research these in depth. Knowing about corporate
events, such as mergers, bonus dates, stock splits, dividend payments, etc., along with their technical levels is important.
Using the Internet for finding resistance and support levels will also be beneficial.

Don’t Move against the Market

Even experienced professionals with advanced tools are not able to predict market movements. There are times when all
technical factors depict a bull market; however, there may still be a decline. These factors are only indicative and do not
provide any guarantees. If the market moves against your expectations, it is important to exit your position to avoid huge
losses.
Stock returns can be huge; however earning smaller gains by adhering to these intraday trading tips should be satisfactory.
Intraday trading provides higher leverage, which effectively provides decent returns in one day. Being content is crucial to
succeeding as a day trader.

Rules for Intraday Trading

Most traders, especially beginners, lose money in intraday trading because of the high volatility of the stock markets.
Generally, losses occur due to fear or greed because, while investment is not risky, the lack of knowledge is.

Basic Rules for Intraday Trading

 Timing the Market: Experts often recommend individuals avoid trading during the first hour, once the markets open.
Taking positions between noon and 1pm can increase the possibility of earning profits.

 Plan Investment Strategy and Stick to it: Every time users initiate a trade, it is important for them to have a clear plan
of how to do intraday trading. Determining the entry and exit prices before initiating the trade is crucial. One of the most
important intraday trading tips is to use the stop loss trigger to reduce the potential loss on your position. Moreover, once
the stock achieves the target price, users are advised to close their position, and not be greedy and expect higher profits.

 Exiting the Position under Unfavorable Conditions: For trades that provide profits and price-give reversal (price
expected to show reverse trends), it is prudent to book the profits and exit open position. In addition, if the conditions are
not favorable to the position, it is advisable to immediately exit and not await the stop-loss trigger to be activated. This will
help traders reduce their losses.

 Invest Small Amounts that Won’t Pinch: It is not uncommon for beginners to get carried away once they make some
profits during day trading. However, markets are volatile and predicting the trends is not easy even for seasoned
professionals. In such situations, beginners can easily lose all their investments. This is why an important intraday tip is to
invest smaller sums that a user can afford to lose. This will ensure individuals do not face financial difficulties in case the
markets do not favor them.

 Research and Choose Liquid Stocks: Before commencing intraday trading, it is recommended to understand the
basics of the stock market, and the fundamental and technical analyses. There is plenty of research available on the
Internet and taking the time to read it will be advantageous. Moreover, there are hundreds of stocks that are traded on the
equity markets and traders must trade only two or three liquid stocks. Liquid stocks are those shares that have high
volumes in the intraday market. This allows traders to exit open positions before the end of the trading sessions.

 Always Close All Open Positions: Some traders may get tempted to take delivery of their positions in case their targets
are not achieved. This is one of the biggest errors and it is crucial to close all open positions even if traders have to book
a loss.

 Spend Time: Day trading is not for professionals who are employed in a full-time job. Traders must be able to monitor the
market movements throughout the market session (from opening bell until its closing) to enable them to make the right
calls as required.

Intraday Trading indicators

When it comes to booking profits in intraday trading, you will require to do a lot of research. For the same purpose, you
need to follow certain indicators. Often intraday tips are believed to be the Holy Grail; this, however, is not entirely accurate.
Trading indicators are beneficial tools when used with a comprehensive strategy to maximize returns.
How to make profit in intraday trading
Intraday traders always face inherent risks that exist in the stock markets. Price volatility and daily volume are a couple of
factors that play an important role in the stocks picked for daily trading. Traders must not risk over two per cent of their total
trading capital on a single trade to ensure the right risk management. So here are a few tips shared to make profit in
intraday trading.

Intraday Time Analysis

When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on
a one-day interval. These charts are a popular intraday trading technique and help illustrate the movement of the prices
between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can
be used. Below are some of the most commonly used charts while intraday trading on the Indian stock market. Know more
about intraday trading time analysis.

How to Choose Stocks for Intraday Trading

To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make
profits because they fail to select appropriate stocks to trade

Day trading, if not managed properly, can have drastic results on the financial well-being of users. The temptation of
earning huge profits in a short period of time can entice traders. However, with incomplete understanding and knowledge,
intraday trading can be harmful.

INTRADAY TRADING GUIDE FOR BEGINNERS

Intraday means ‘within the day’. Hence, intraday trading refers to trading stocks and ETFs during regular trading hours
within the day. You can sell shares seconds, minutes or hours after he has bought the shares. Intraday trading works on the
concept of price movement. You buy shares when the price is low and sell them when the price rises, thus creating a
difference, which is the money earned. Traders use real-time charts to identify the intraday price movement. The greatest
benefit of intraday trading is the low brokerage cost. The brokerage cost, however, depends on the choice of the broker.

Enter and Exit intraday trading at an Ideal Time

A great tip for intraday trading is to trade with the prevalent intraday trend. It allows low risk entries and potential for greater
profit if the trend continues. Such trends provide useful entry and stop-loss strategies. A day trading strategy must have
entry and exit signals, i.e. when to get into a particular position and when to withdraw. Once the system generates an entry
signal and the position is taken, the exit position has to be decided. You can exit if either of the two conditions is met—you
have achieved your desired profit or maximum loss is reached. Once the desired profit is achieved, it is advisable to exit the
trade. You must set profit and stop-loss targets before the trade and must not let impulsive behaviour get the better of you.

Choose stocks for intraday trading

The main aim of intraday trading should be to create the best stock picking strategy which preserves capital and, at the
same time, controls risk. Start by trading a single stock and learn the characteristics, trends and risks associated with the
stock. Once you’ve understood the behaviour of stocks, you will have a better understanding of the best-performing stocks.

Choose highly liquid stocks, i.e. stocks with a high average daily volume. These stocks can be bought and sold in sufficient
volumes without causing much impact on prices. Also, trade in stocks that have good correlation with major indices and
sectors. Avoid unpredictable stocks, which tend to trade in a volatile manner.
Best day trading strategies for beginners
New traders may feel discouraged with their ability to reap profits and may fail to do important things necessary to succeed
in day trading. It is important to have a day trading plan to avail of the numerous opportunities in theStock Market.
Beginners need to use trading strategies to take advantage of these opportunities. Set profit and stop-loss price targets
before you trade so as to limit your potential loss and to prevent yourself from being too greedy. Also, conduct trade in a
disciplined manner. Don’t let impulsive behavior get the better of you. Instead, stick to your day trading plan and don’t
expect to get rich in a single trade.

Pick the intraday market direction

You can pick an intraday market direction using the ‘value area’. The value area is the range where almost 70% of the
previous day’s trade took place. If the market opens below or above this value area, and remains in this area for two
consecutive half-hour periods, then the market has an 80% chance of filling the value area. This parameter helps in
gauging the market direction. Once you get used to the concept of value area and the 80% rule, trading can be profitable.

If the market opens higher than the value area, enter a short position closer to the top of the value area. Similarly, if the
market opens at a value lower than the value area, enter in a long-term position towards the bottom of the value area.

HOW TO CHOOSE STOCKS FOR INTRADAY

TRADING
To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make
profits because they fail to select appropriate stocks to trade during the day.

Tips to Choose the Right Intraday Trading Stocks

 Trade Only in Liquid Stocks: Liquidity is the most important intraday trading tip while choosing the right stocks to trade
during the day. Liquid stocks have huge trading volumes whereby larger quantities can be purchased and sold without
significantly affecting the price. Generally, lesser liquid stocks do not provide traders the opportunity to purchase and sell
larger quantities due to lack of too many buyers. Some traders may argue that illiquid stocks offer bigger opportunities
with rapid price modifications. However, statistics show that volatile stocks show bigger movements in a shorter period of
time. Thus, most of the possible gains dissipate while the downside risk still looms. Nonetheless, the liquidity of the
stocks depends on the quality of the trades placed by the traders. For example, a volume of 50,000 to 75,000 shares is
sufficient if the trade is for 50 or 100 Rs; however, if the volume is few hundreds or thousands, volume requirements
significantly become larger.

 Stay Away from Volatile Stocks: It is commonly noticed that a low daily volume of traded stocks or those where some
huge news is expected move in an unpredictable way. Sometimes, the stock may show volatility even after the
announcement of the big news. Traders are recommended to avoid intraday trading in such stocks. A few volatile stocks
are in the mid-size segment while most stocks traded in the low-cap categories like S, T, and Z are highly chaotic. In
addition to being volatile, these stocks have low daily volumes, making these illiquid.

 Trade in Good Correlation Stocks: An intraday tip for choosing the right stock is to opt for those that have higher
correlation with major sectors and indices. This means when the index or the sector sees an upward movement, the
stock price also increases. Stocks that move according to the sentiment of the group where it belongs are reliable and
often follow the expected movement of the sector. For example, strengthening of the Indian Rupee against the Dollar will
generally affect all information technology companies dependent on the US markets. A stronger rupee implies lower
earnings for the IT companies and weakening rupee will result in higher export incomes for these companies.
 Follow the Trend: One of the most important intraday trading tips is to remember that moving with the trend is always
beneficial. During a bull run on the stock market, traders must try to identify stocks that can potentially rise. On the other
hand, during the bear run, finding stocks that are likely to decline is advisable.

 Research: Undertaking quality research is one of the most vital intraday tips traders must always remember.
Unfortunately, most day traders avoid doing their research. Identifying the index and then finding sectors that are of
interest is recommended. The next step is to create a list of several stocks with these sectors. Traders need not
necessarily include sector leaders, but rather identify stocks that are liquid. Technical analysis and determining the
support and resistance levels along with studying the fundamentals of these stocks will help traders find the right stocks
to profit through day trading.

Intraday trading has inherent risks; buying and selling the stocks during the same day. Earning profits through small price
fluctuations during the few trading hours is not an easy task. Quick decisions are required, which can be made only when
traders have all the necessary information.

HOW TO MAKE PROFIT IN INTRADAY TRADING

Intraday traders always face inherent risks that exist in the stock markets. Price volatility and daily volume are a couple of
factors that play an important role in the stocks picked for daily trading. Traders must not risk over two per cent of their total
trading capital on a single trade to ensure the right risk management.

How to Make Profits in Intraday Trading

 Opening Range Breakout (ORB): This intraday trading strategy is widely used by professional traders as well as
amateurs. To maximize the potential of this strategy, combining it with the optimum use of indicators, accurate
assessment of market sentiment and stringent rules are recommended. ORB has numerous variations; some traders
may opt for trade on large breakouts from the opening range and others choose to place their trades on the opening
range breakout. The time window for the trades ranges between 30 minutes and three hours.
 Intraday Trading Tips for Indian Markets: Every stock undergoes a range within the initial 30 minutes of the start of the
trading session, which is known as the opening range. The highest and lowest prices during this period are assumed as
the resistance and support levels. It is advisable to buy when the share price moves beyond the opening range high and
sell if the price falls below the opening range low.
 Demand-Supply Imbalances: An important intraday trading tip for beginners is to look for stocks where drastic
demand-supply imbalances exist and opt for these as entry points. The financial markets follow the normal demand and
supply rules—price reduces when there is no demand for higher supplies and vice versa. Users must learn to identify
such points on the price chart through research and studying the historical movements.
 Opt for 3:1 Risk-Reward Ratio: Traders, especially beginners, must understand the appropriate risk-reward ratio.
Initially, finding stocks that provide a potential risk-reward ratio of at least 3:1 will be beneficial in earning profits inshare
market investment. This strategy will allow them to lose small while giving them the opportunity to earn big even if they
have losses on most of their trades.
 Relative Strength Index (RSI) and Average Directional Index (ADX): Combining these two intraday trading
strategiesto find buy and sell opportunities can help traders earn profits. The RSI is a technical momentum indicator
comparing recent losses and gains to determine over purchased and oversold stocks. The ADX is beneficial and is used
to determine when the prices are showing strong trends. In most scenarios, if the RSI crosses the upper limit, it is
indicative of a sell trade and vice versa. However, when you combine the RSI and ADX, intraday traders buy when the
RSI crosses the upper limit and vice versa. The ADX is used as the trend identifier to help users take their buy or sell
decisions.
Intraday trading involves same-day trade settlements. Most traders try to achieve smaller profits through their trades. The
golden intraday tip is to ride with the market trend to help make profits.

INTRADAY TRADING INDICATORS

Often intraday tips are believed to be the Holy Grail; this, however, is not entirely accurate. Trading indicators are beneficial
tools when used with a comprehensive strategy to maximize returns.

Information Offered by Intraday Trading Indicators

 The direction of the trend to determine the movement
 The lack of or existing momentum within the investment market
 Profit potential due to the volatility
 Determine the popularity through volume measurements.
Traders will benefit by bearing in mind that too much information can result in analysis paralysis. This can help them make
the right trading decisions, thus leading to higher profits.

Useful Intraday Trading Indicators

 Moving Averages: Traders often hear about daily moving averages (DMA), which is the most common and widely used
indicator. The moving average is a line on the stock chart that connects the average closing rates over a specific period.
The longer the period, the more reliable the moving average. This indicator will help you comprehend the underlying
movement of the price, as prices do not move only in one direction. Stock prices are volatile and the moving average
indicator smoothens the volatility to provide an understanding of the underlying trend of the price movement.

 Bollinger Bands: This intraday trading indicator is one step ahead of the moving average. This band comprises three
lines—the moving average, an upper limit and a lower one. All these are representative of the stock’s standard deviation,
which is nothing but the amount by which the price increases or decreases from its average. This provides traders an
understanding about the stock’s trading range.

 Momentum Oscillators: Stock prices move up and down. There are short-period cycles that are unrelated to the bullish
or bearish market trends. In such cases, it is easy for day traders to miss out on such changes, which is when the
momentum oscillator is beneficial. This indicator is depicted within a range of 0 to 100, and is advantageous when the
price has achieved a new high or low, and one wants to determine whether it will further rise or fall. In other words, the
momentum oscillator helps to understand when the market sentiments are undergoing modifications.

 Relative Strength Index (RSI): The RSI is one of the useful intraday trading tips to compare the share price’s gains and
losses. This information is then formulated in an index form, which further helps in narrowing down the RSI score ranging
between 0 and 100. This index increases with price rises and vice versa. Once the RSI increases or decreases to a
specified limit, you can modify your trading strategy.

Decoding the Intraday Trading Indicators

 Moving Averages: If short-term averages are exceeding the long-term averages, it indicates a bullish market trend.
Traders may take a buy call with specific strategies like stop loss either at the long-term moving average or retracement
support, and vice versa. This intraday tip can help traders earn decent profits through intraday trading.
 Bollinger Bands: If the stock is trading at a price below the Bollinger Band lower line, there is potential for the price to
increase in the future. Traders can choose to take a buy position. On the other hand, if the current stock price is over the
upper line, traders can sell the share.

 Momentum Oscillators: If the share price has reached a historical high, and the level of the oscillator is not the same as
the price, it is indicative of slowly decreasing demand. This also indicates the possibility of a stock price fall. And the
opposite is true for stock price rise.

 RSI: Most analysts will recommend traders to sell the stock when the RSI touches 70 and a buy recommendation when it
falls to 30. However, all stocks may not adhere to this pattern, so it is important to analyze the volatility and RSI history
before making a decision.

Using intraday trading indicators is a good risk management strategy. These indicators can assist traders is placing the
appropriate trades based on technical analysis and market sentiments.

INTRADAY TRADING TIME ANALYSIS

When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on
a one-day interval. These are beneficial for analyzing short and medium-term time periods; however, some traders may use
these for long-term analysis. The thumb rule states that usage of daily charts is used for analyzing periods exceeding six
weeks.

Intraday Trading Charts

These charts are a popular intraday trading technique and help illustrate the movement of the prices between the opening
bell and closing of the daily trading session. There are several methods in which intraday charts can be used. Below are
some of the most commonly used charts while intraday trading on the Indian stock market:

 Hourly Charts: These charts depict the price movements of a particular stock for a specific period of time. These include
detailed information within the confines of a single trading day. Each candlestick or bar is representative of the opening,
closing, high, and low of every hourly interval for the time period being analyzed. These are generally used for short-term
trades, which last from a few hours to a few days.

 15-Minute Charts: These show the opening, closing, high, and low price movements at 15-minute intervals for a
particular stock. The 15-minute charts are often used for day trades lasting from an hour to a few trading sessions.

 Intraday Five-Minute Charts: This is one of the most widely used charts by traders. It represents the price movements
of the index or stocks over a particular period of time. Every bar on the chart represents the opening, closing, high, and
low of five-minute intervals during the chosen time frame. These charts are frequently useful for quick scalps lasting from
several minutes to several hours during a trading session. This kind of chart is also used by long-term traders to identify
and select the most efficient entry and exit points while initiating trades over a longer period of time. Using the intraday
five-minute chart for long-term share market investmentcan be a beneficial intraday tip for longer period investors.

 Two-Minute Chart: This is another intraday chart that is popular among stock market traders. This type of chart often
depicts the price movement over some hours on the same trading day. Each candlestick shows the opening, closing,
high, and low at two-minute intervals during the selected period of time. These charts are most beneficial for day trades
or scalping, which can range from some minutes to several hours during one trading session.

 Tick-Trade Charts: These are line charts representing every trade that is executed on the stock market. While using
these kinds of charts, traders need to bear in mind that time is of no essence and every point on the chart represents an
actual completed trade. In case the markets are illiquid, the chart is depicted as a flat line. Highly liquid market charts
 show constantly moving ticks. The chart is beneficial while intraday trading in tracking every executed transaction with a
line across time, which moves up or down to immediately show the upward or downward movement in the stock price.
The tick charts are used by traders for scalping and to keep track of ‘out of money’ trades that need correction.

Based on the traders’ perspectives, market conditions can change, also depending on the period of time being analyzed. To
be successful, analysis of the accurate time period is important and is a vital intraday trading tip that must always be borne
in mind.

TIPS ON HOW TO PICK STOCKS FOR INTRADAY

TRADING
One of the big questions that come to every intraday trader’s mind every single day is to find the right stock for intraday
trading. After all, the key to successful trading is the right selection of stocks. There are a number of factors that should be
taken into consideration at the time of stock selection. There are so many listed shares but it isn’t necessary that they can
be chosen for intraday trading. Take a look at a few tips mentioned below which highlight on

How to pick stocks for intraday trading:

One of the main criteria while intraday trading is the volume of the stocks. The total number of shares that are traded in a
particular market at a given time reflect volume. It is mostly recommended to purchase stocks that are high in volume.

Stocks of the day

Depending on good news, a few stocks are expected to perform well. Such stocks are anticipated to move in either
direction with good volume. These shares can be used for intraday trading.

Week’s movement
Study the movement of stocks that are constantly closing in negative or positive for the previous one week. An analysis of
this movement will help you in selecting the stocks for intraday trading.

Resistance level
Some of the stocks to watch out for are those that have broken resistance levels and which move in an upward direction.
Such stocks are one of the favourite choices.

Trading
A few intraday traders involve in trading only in particular shares. This is because these traders engage in detailed study of
share movement. This is one of the main intraday strategies that are followed by traders.

Top gainers and losers

While some shares come under top gainers, others come under top losers. Such shares may provide fairly good
movements. However, keep a close watch on these them in order to begin trading.
 DAY - 4
SHARE MARKET
The Indian share market comprises NSE and BSE – both which are active. Start online share trading by referring to the
share market tips and trading techniques shared by us, and experience profits like never before.

Investments are primarily done to ensure financial security for investors. Savings are insufficient to meet future
requirements due to rising inflation. This is why investing is important. Although there are several kinds of financial
instruments available, stock investing offers the highest returns.
Thousands of companies list their shares on the Indian share markets. From these, a few similar stocks are grouped
together to form an index. The classification may be on the basis of company size, industry, market capitalization, or other
categories. The BSE Sensex includes 30 stocks and the NSE comprises 50 stocks. Others include sector indices like the
Bankex, market cap indices like the BSE Mid-cap or the BSE Small cap, and others.

Share Market Basics

Before starting to invest in stocks, learning about what the share market is and how it works will help. It is where shares
of different companies are traded. In India, there are two primary exchanges; the National Stock Exchange (NSE) and the
Bombay Stock Exchange (BSE).
Investment is a key to your safe and secured future. However, to overcome the impact of inflation, investments in plain old
financial instruments does not seem to be adequate. To get something extra out of your investments, Share market offers
the lucrative opportunity of purchase and trade of securities such as stocks and options. Angel Broking empowers every
eager investor to understand the working of the share market by providing information on stock market basics, how to trade,
types of financial instruments, and successful trading strategies that offer better returns for you to become someone more
than a regular investor.

Types of Share Market

There are two types of trading in the Indian share market - Primary Market and Secondary Market. The primary market is
the part of the capital market which deals with issuing new securities to investors. When a firm sells bonds or new stocks for
the first time to the public, it creates a primary market. The company, at this point of time, gets listed in a stock exchange
and becomes public. The primary market can take form through an Initial Public Offering (IPO). Secondary market, on the
other hand, is all the trading that takes place subsequent to primary market. At this stage, you can sell your shares to
another investor through intermediaries like a stockbroker. Simply put, the secondary market is one where investors trade
the previously issued securities without the company’s involvement. The company that issued the shares is now not a party
to any further sale between investors.

 Primary Market: This is where companies offer some part of their shares for the first time to individual and institutional
investors. Such offerings are known as the initial public offerings (IPO). This is the route adopted by private companies to
convert to public companies on the share market.

 Secondary market: After the IPO, the shares are traded on the secondary market. This allows investors to sell their
holdings at the prevailing market prices. It also provides the opportunity to other investors who may not have received
shares during the IPO.
 Online Trading on the Share Market: Orders are placed through an online trading account using a computer and
internet connection. Investors who want to trade themselves find this service beneficial.

 Offline trading on the Share Market: Using a stock broker or placing orders on the telephone is known as offline trading.
The brokers place orders on behalf of their clients and provide confirmation on the execution of these transactions.

Financial Products Traded on the Stock Market

 Shares: Investors can invest in company shares, gain ownership and enjoy some portion of the profits. These shares
form an important component of the stock market basics and are the largest product traded on the stock exchanges.

 Mutual Funds: These financial products allow investors to indirectly invest in bonds and shares. Fund houses pool
investments from several investors and invest these in different instruments. These decisions are made by trained and
experienced professionals.

 Derivatives: Prices on the stock exchanges constantly fluctuate, making it difficult to arrive at a fixed price. This is where
derivatives are beneficial and allow investors to trade on a future date at prices fixed today.

 Bonds: Companies require money to take up large projects. They raise this through the issue of bonds, and bondholders
are repaid through profits made on the project. Bonds are a kind of financial instrument where several investors lend
money to companies.

Investing is complex and investors should rely on professional analysis to avoid being surprised. Sticking to the stock
market basics, doing the research and due diligence, and regularly monitoring the portfolio will help investors make profits
through their share market investments.

Why People Invest in Share Market

Investors buy and sell shares through a share market. Investors buy shares for the specific reason of getting income.
Though investing in shares has its share of risks, it can reap good returns in the long run. Shares offer you income through
dividends. Hence, it acts as an annual income and as a reward for shareholders. The higher the profitability of the company,
the higher its dividend rate is. Purchasing stocks of a company can give investors a sense of ownership, thereby allowing
you to have a share of the profit that the company earns. Investing in shares also adds diversity to your investment portfolio.
Share trading also has a stop-loss feature - if the value of your shares falls below this stop-loss limit, it will automatically be
sold, thus saving you from unexpected losses.

What is meant by equity market?

In simple terms, an equity market is a market used for trading equity instruments. Through an equity market, shares are
traded either through stock exchange or over-the-counter markets. It offers two-way benefits to companies and investors.
Companies get an opportunity to raise required capital without incurring debt. Investors can earn profits through these
company shares. They also have a claim on the future earnings of the company.
Equity markets act as a buying and selling avenue of stocks. It is a meeting point for companies and investors. The equities
traded in the equity market can either be public stocks or private stocks, Public stocks are those stocks which are listed on a
stock exchange, like NSE or BSE. Private stocks are traded through over-the-counter market, or through dealers.
Who is a stock trader?
Simply put, a stock trader is an investor who trades stock in the financial markets with the aim of earning profits on those
investments. Stock traders may be investors as a full-time profession or can partake in the practice casually. They may be a
hedger, investor, speculator or an arbitrageur. Stock traders trade financial instruments like mutual funds, shares, equity,
pension funds, etc. In order to be a successful stock trader, you must have a profitable investment strategy in place. Some
use the buy and hold strategy, where bought stocks are held for a longer term for higher profits. Various stock traders have
different investment strategies based on their financial goals.
What is a stock exchange?
A stock exchange is a financial market where buy and sell transactions of securities takes place. These buy and sell prices
are determined by market forces like demand and supply. A stock exchange helps investors to trade through a convenient
and secured platform. The Bombay Stock Exchange (BSE) is the oldest stock exchange in India. Currently, the National
Stock Exchange (NSE) is the leading stock exchange of the country and is located in Mumbai.
You can buy and sell securities like shares, debentures, bonds, etc. through a stock exchange. It requires registration by
the Central Government. Trading securities is governed by rules and regulations of the stock exchange and SEBI
(Securities and Exchange Board of India) guidelines. SEBI is the regulator for the securities market in India.
How much is the minimum amount for investing in share market?
There is no minimum amount required for share market investment. You can buy a single share or any number of shares
you like. In order to trade in shares, you have to open a demat account with a depository participant. A trading account has
to be opened as well, with your stockbroker. You can begin trading shares once these accounts have been opened. Shares
offer you income through dividends. Hence, it acts as an annual income and as a reward for shareholders. The higher the
profitability of the company, the higher its dividend rate is.
People also buy shares to have a stake in companies which are likely to perform well, thus giving them a sense of
ownership. It also helps to create a diverse investment portfolio. Buying shares also allows easy access to your money as
you can easily buy and trade shares without having to cough up a penalty.

How is the market qualified as bull or bear?

The market is known as a bull market if stocks are rising, GDP is increasing and there are many job opportunities. During
this time, investors are of the belief that the upward trend will continue in the near future. It is characterized by high levels of
optimism and investor confidence. Bear market, on the other hand, means that stock prices are falling and the economy is
on verge of a recession. At this time, when share prices are falling, most investors sell their shares to avoid added losses. It
becomes difficult to earn stellar gains during this time unless the investor is a short seller.

Rolling Settlements
Every order that is executed on the share market must be settled. Buyers receive their shares and sellers receive the sale
proceeds. The settlement is the procedure wherein the buyers procure their shares and sellers receive their monies. The
rolling settlement is when all trades have to be settled at the end of the day. In other words, the buyer must pay for his
purchase and seller delivers the sold shares in one day on the share market. Indian share markets adopt the T+2
settlements, which means the transactions are completed on Day One and the settlement of these trades must be
completed within two working days from Day One.

Stock Exchange Board of India (SEBI)

Because the bourses have inherent risks, a market regulator is required. The SEBI is provided with this power and has the
responsibility of developing as well as regulating the markets. The basic objectives include protecting investor interest,
developing the share market, and regulating it’s working.
Investing in Shares
Investors must determine their share market investment strategy based on their personal requirements and financial
limitations. After doing research and shortlisting the potential stocks, they must monitor their movements and enter the
market at the right time. Investors can place their orders either through an online or an offline trade. Monitoring the
performance of their investments regularly to make their decisions based on market conditions and other factors is vital to
ensure they can maximize their returns through stock investing.

HOW DOES STOCK MARKET WORK?

In India, the two primary stock exchanges are the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Further, there is a primary market where companies list their shares for the first time. Secondary markets allow investors to
buy and sell shares issued during the initial public offering (IPO).

Working of the Stock Market

 Participants: The Stock Exchange Board of India (SEBI), stock exchanges, brokers, and traders/investors
The stock exchange provides a platform for trading in financial products. The companies (listing their shares), brokers,
traders, and investors must register with SEBI and the exchange (BSE, NSE, or regional exchanges) before trading.

Steps to Invest in the Indian Stock Market

 IPO: The companies file a draft offer document with the SEBI. This document comprises information about the
company—shares being diluted, price band, and other details. On approval, the company offers its shares to investors
through an IPO on the primary market.

 Distribution: The Company issues and allots shares to some or all investors who bid during the IPO. The shares are
then listed on the stock market (secondary market) to enable trading. This platform is a medium offered for the initial
investors to exit their share market investments. In addition, investors who failed to receive allotment during the IPO are
given the opportunity to buy shares on the secondary market.

 Stock Brokers: Broking agencies (registered with SEBI and the stock exchange) are intermediaries between the
investors and the Indian stock market. On receiving instructions from the clients, the brokers place their orders on the
market. On matching a buyer and seller, the trade is successfully executed. A confirmation is received from the stock
exchange and sent to both the buyer and seller.

Historically, this procedure was manual and thus time-consuming and cumbersome. However, with online trading
platforms, the entire procedure of matching buyers and sellers is done through the internet. This has reduced the
transaction time to a few minutes.

Nonetheless, there are thousands of potential investors and converging all of them in one location is impossible. Stock
exchanges and broking agencies play a crucial role in this situation.

 Order Processing: This occurs when an order is placed by brokers on behalf of their clients on the exchange where it is
processed. There are several parties involved in the entire processing. When buyers and sellers are matched, the stock
exchange sends a confirmation to both parties to avoid defaults. The executed trades are settled, which is the process
where the buyer receives the shares and sellers receive their funds. The Indian stock market adopts the T+2 settlements,
where the settlement occurs within two working days from the day of the transaction.
Investing the shares and other products must be done after investors consider their personal needs and financial goals.
Following the stock market basics and understanding how it works will help make investing profitable and prevent investors
from taking unnecessary risks.

THE BENEFITS OF INVESTING IN STOCKS

The primary objective of investing is to ensure that every person is able to meet his or her future financial objectives.
Inflationary rises make it inadequate for individuals to simply earn and save some part of their incomes. To meet the price
increases due to inflation, investments become important. The stock market is one of the oldest and most popular
investment avenues due to several benefits of investing in stocks.

Benefits of Investing in Stocks

 Higher Liquidity: In the Indian stock market, two exchanges, the Bombay Stock Exchange (BSE) and National Stock
Exchange (NSE) play important roles. Most companies trade their shares on either or both of these exchanges. This
provides higher liquidity to investors because average daily volumes are high. Therefore, if an investor wants to buy or
sell any product on the stock exchanges, this liquidity makes it easy.

 Versatility: The stock market offers different financial instruments, such as shares, bonds, mutual funds, and derivatives.
This provides investors a wide choice of products in which to invest their monies. In addition to providing investment
choices, this flexibility is beneficial in mitigating the risks inherent to stock investing by enabling diversification of
investment portfolios.

 Higher Returns in Shorter Periods of Time: Compared to other investment products like bonds and fixed deposits,
stock investing provide investors an excellent possibility of making greater returns in comparatively shorter time periods.
Adhering to the stock market basics, such as planning the trade, using stop-loss and take-profit triggers, doing the
research and due diligence, and being patient can significantly mitigate the risks inherent to stock investing and
maximize the returns on share market investments.

 Acquire Ownership and Right to Vote: Even if an investor acquires a single share in a company, he acquires a portion
of ownership in the company. This ownership, in turn, provides investors the right to vote and offer his contribution in the
strategic movement of the business. Although this may seem like an exaggeration, it is true and there are several
instances when shareholders have prevented company management from making unreasonable decisions that are
detrimental to their interests.

 Regulatory Environment and Framework: The Indian stock market is regulated by the Stock Exchange Board of India
(SEBI). The SEBI has the responsibility of regulating the stock exchanges, its development, and protecting the rights of
the investors. This means when investors invest in financial products on the stock market, their interests are
well-protected by a regulatory framework. This significantly helps in reducing risks due to fraudulent activities of
companies.

 Convenience: Technical development has influenced every aspect of modern living. The stock exchanges are also using
various technical advancements to provide greater convenience to the investors. The trades are all executed on an
electronic platform to ensure the best investment opportunities to investors in an open environment. In addition, broking
service providers offer online share trading facilities that make investing convenient, because investors can place their
orders through a computer from the comfort of their homes or offices. The demat account makes it easier for investors to
hold all the products within their investment portfolio electronically in a single location, which makes it easier to track and
monitor the performance.
Although stock investing has several benefits, investors must also be cautious while making their decisions. Understanding
the stock market basics and doing their research before investing is advisable to mitigate risks and maximize returns.

THINGS TO KNOW ABOUT INDIA'S STOCK

MARKET
The majority of trading in India is done on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). BSE
was founded in 1875 and NSE was established in 1992; however, both these stock exchanges follow the same trading
hours, mechanisms, and settlement processes.

Trading Mechanism
Trading in both these stock exchanges is conducted through an online electronic limit order book. This means that buy and
sell orders are matched through trading computers. The Indian stock market is order-driven where buyers and sellers
remain anonymous, providing greater transparency to all investors. Orders are placed through brokers, most of which now
provide online share trading services to retail investors.

Trading Hours and Settlement

The stock market adopts the T+2 settlement cycle. This means that if the trades are executed on Day 1, the buyers will
receive their shares and sellers the sales proceeds after two working days from Day 1. The stock exchanges are
operational between 9.55 AM and 15.30 PM from Monday to Friday. All deliveries must be made in an electronic form
through demat account. Each exchange has a clearing house to settle all trades and mitigate settlement risks.

Market Indices
The two most prominent Indian stock market indices include the BSE Sensex and Nifty. The Sensex is the oldest index
comprising shares of 30 companies and represents roughly 45% of the free-float market capitalization. The Nifty includes
50 companies and accounts for approximately 62% of its free-float market cap.

Market Regulator
The responsibility of developing the stock market, regulating the exchanges, and forming rules is assumed by the Stock
Exchange Board of India (SEBI). It was established in 1992 as an independent authority body. SEBI constantly lays down
rules and regulations for best market practices. The regulator is also given the right to penalize market participants in case
of any breach or fraudulent activities.

HOW TO INVEST IN THE STOCK MARKET

 Identify your Investment Requirements: Before placing the order on the stock market, investors must determine their
needs and limitations. While determining the requirements, users must consider present as well as future needs. The
same rule is applicable while determining their limitations. Investors must list their incomes and deduct all their expenses
along with debt obligations (if any) to find the investible surplus. An important factor that will determine the share market
investment strategy is the risk aversion of the investors. Individuals who do not want to assume higher risks would prefer
investing in fixed deposits and bonds. Many investors fail to consider their tax liabilities while investing. Share trading
incurs capital gains tax for shares sold within a year of their purchase and this must be considered while making the
buying and selling decisions.
 Determine the Investment Strategy: After understanding the personal profile, investors must analyze the stock market
situation to arrive at an appropriate investment strategy. Individuals must identify stocks that suit their needs. For
example, if an investor wants an additional source of income, investing in dividend paying stocks is appropriate. For
investors who want to grow their capital, choosing growth stocks is an accurate strategy.

 Enter at the Right Time: Entering the market at the right time is one of the most important share market basics often
overlooked by investors. Purchasing the identified stocks at the lowest price level will maximize the potential profits
investors can earn. On the other hand, exiting the stock when it is trading at the highest price will be beneficial.

 Execute the Trade: Traders can execute their orders either through offline or online share trading. They can place their
orders on the telephone. If an investor chooses the offline method, he must ensure the broker has understood the order
correctly to prevent any errors.

 Monitor the Portfolio: Many investors make the mistake of investing and not periodically checking their investment
portfolio. The stock exchange is dynamic and conditions are constantly changing. Tracking your investments regularly is
important to exit and entry at the right time. Studying the companies where traders have an interest is crucial to prevent,
or at least minimize, losses in case of any extreme situation. However, this does not mean making decisions with every
price rise or fall because patience is a vital characteristic for traders to profit through stock investing.

There are different kinds of stocks traded on the markets. Understanding these various shares before developing the
investment strategy to suit personal requirements is recommended.

STOCK MARKET GUIDES FOR BEGINNERS

 Understand the Entire Procedure: Every person begins with the basics when starting anything new. This rule is
applicable when investors decide to invest in the Indian stock marketas well. There is plenty of information available on
the Internet that can be used to understand the basics of the stock market, investing, and other related concepts.
Investors can also find useful information from their service providers from whom they avail demat and trading accounts.

 Learn to Choose: While investing, it is crucial to enter the market at the right time when the shares are trading at their
lowest levels. Similarly, exiting when the prices are peaking is important. Investors must also make the right choice about
the companies in which they want to invest. It is common for many investors to follow the herd mentality and follow
professional traders and analyst reports. Though this may help to gain an understanding of the workings of the market,
investors need to use their discretion before making investment decisions. An individual must understand his personal
needs and preferences while choosing the sectors and stocks. Moreover, not every company is profitable, and doing the
research and due diligence before investing will help mitigate some risks associated with stock market investing.

 Determine the Investment Amount: Investors must be prudent on how much exposure they take in various financial
products. Some of the available instruments include shares, bonds, mutual funds, and derivatives. Although
diversification is a good idea to mitigate market movement risks, investors must invest only in those products that they
understand. In addition, limiting the investment in high-risk products to amounts that they can afford to lose without facing
a financial crunch is crucial. This is an important stock market tip, which is often overlooked by investors in the hope of
making huge profits.

 Track and Review the Portfolio: It is not uncommon for investors, especially long-term investors, to invest in certain
products and then not look at these until they want to exit. This is one of the biggest errors while investing in the stock
market. The markets are dynamic and volatile; even the smallest news or event can result in huge movements to the
performance of the various products. This is why it is important for investors to regularly track the performance of their
 various investments and review it. If any news or event significantly affects their product portfolio, the necessary
modifications must be made to minimize the potential losses resulting from the share market investments.

 Learn from Errors: Professional traders with several years of experience make mistakes; so if a beginner makes
erroneous decisions, he must not be disheartened. Investing is a learning experience and making mistakes is an in-built
component. While reviewing their portfolios, investors must learn to identify their mistakes and learn from these to ensure
the errors are not repeated in the future. Gaining experience as a person continues investing in different products and
learning from his or her mistakes is the best teacher that helps him or her become a seasoned investor.

When investors stick to the stock market basics, they can sail smoothly even through difficult market conditions. They will
not only be successful, but can enjoy a secured financial future.

SHARE MARKET INVESTMENT GUIDES

To start trading, an investor requires three types of accounts. The trading account is used for buying and selling financial
products. A demat account is required to hold the investments electronically. And finally, one needs a bank account to
transfer and receive funds.

 Trading Account: Investors can open an offline or online trading account with any broking firm that is registered with the
stock exchange. The primary function of the trading account is facilitating purchase and sale of various financial products
available on the share market.

 Demat Account: Since 1996, all investments like bonds, mutual funds, and shares have been dematerialized. This
means the instruments are now available electronically. This makes it mandatory for investors to avail a demat account to
buy and sell financial products traded through the trading account.

 Bank Account: Investors can link their savings bank account with the trading account. This enables quick and efficient
transfer of funds for all trades that are successfully executed in the trading account.

Most broking companies provide a complete solution for investors and offer all the above three accounts. This makes it
easier and convenient for investors to trade in the Indian stock market.

Participants in the Stock Market

 Stock Exchanges: These are the platforms where different products like equities, bonds, derivatives, and mutual funds
are traded. All market participants have to register on these exchanges and the Stock Exchange Board of India (SEBI).

 Brokers: These service providers act as intermediaries between the stock exchanges and the investors. Before offering
broking services, they need to register with the stock exchanges. The brokers provide information about client trades to
the exchanges, which then search for a matching order.

 Traders and Investors: These are individuals or institutional entities that buy and sell various financial products
available on the stock exchanges. The traders trade in different instruments to make profits either for themselves or for
their clients. Individual investors often invest in different products to gain profits in the short and long term. Traders and
investors are advised to follow the share market basics to mitigate the inherent risks of stock investing and to maximize
the potential returns.

 SEBI: Stock investing is risky and regulation is crucial to protect the investors’ interests. SEBI is provided with this
responsibility and develops various rules and regulations to develop the stock exchanges while protecting the investors.
Order Processing
 Traders and investors place their orders through the trading account
 The broking agencies direct these to the stock exchanges
 The exchange searches in an open environment for matching counter-party offers
 The exchange confirms trades to both the buyer and seller
 The broker debits the demat account (sell order) and credits the account (purchase order)
The settlement procedure (T+2) takes place, which is when the buyers receive the shares and sellers receive their money
within two working days of the trade.

HOW TO TRADE IN INDIAN SHARE MARKET

In order to begin trading, you will require demat and trading account, both available with leading stockbrokers as Angel
Broking. A demat account will act as the common repository that allow you to store the shares you have purchased,
whereas a trading account will facilitate the actual buying and selling activities.

The Process of Trading

 When you buy a share using your trading account, money is transferred out of your bank account and the share is
transferred into your demat account

 When you sell a share, it is transferred out of your demat account into the share market. The money resulting from the
transaction will be made available in your bank account.

Share Market Basics

As an Indian investor, the two share markets that you can trade in are:

 National Stock Exchange (NSE)

 Bombay Stock Exchange (BSE)
The two depositories with which all depository participants are registered are:

 National Securities Depository Ltd (NSDL)

 Central Depository Service Ltd (CDSL).

How to Trade in Share Market

Trading is one of the methods of how to invest money in the share market. It can be defined as active form of buying and
selling of securities with an intention to make profit.

There are two types of trading:

 In intraday trading or day trading, you must square off all positions before the market closes. For the purpose of intraday
trading, you may avail of margins, which is defined as the funding provided by the broker to increase your exposure in the
stock market. It allows you to purchase/sell additional number of stocks, which would otherwise require you to invest
greater amount of funds.
 Delivery trading involves buying the stocks and holding them for more than one day, thus taking their delivery. It does not
involve the use of margins, and hence you must possess the funds for your share market investments. It is a more secure
method of investing in the Indian share market.

How Much You Should Invest

How much financial risk you can tolerate should determine how much you should invest. Your investments should not
endanger your savings. It is also important to diversify your portfolio and utilize features such as stop loss to minimize
losses.

What Should You Base Your Decisions on?

 Financial analysis: Financial analysis is used to make inferences about future share prices and overall health of a
company using company reports and non-financial information such as industry comparisons and estimates of demand
for growth of the company’s products. It is important to ask questions such as “What advantage does this firm have over
other firms?” or “Does it have a sizable market share?”

 Technical analysis: Technical analysis involves the use of a two-dimensional chart to map the historical movement of
prices. It uses historical values of share prices and volume charts to make predictions about future prices.

Using both types of analysis will allow you to make sound decisions.

Know Your Rights

Before entering into a contract with a broker, ensure that it is registered with SEBI and that its credentials support its claims.
Ensure that you receive a ‘Statement of Accounts’ for funds and securities settled every quarter, and documented proofs of
all deposits that you make.

WHY DO PEOPLE BUY SHARES?

Wealth creation
In its very essence, investing in shares is about accumulating and multiplying wealth. The most basic tip about how to
invest money in the share market that traders follow is 'buy low, sell high'.

Another share market basic for wealth creation is investing for the long term. This is because businesses go through a
lifecycle, and investors need to give their shares enough time for value creation. This is possible only if they stay invested in
a particular stock over a period of time.

Opportunities to own
Buying shares of companies implies that the investor owns a part of that company, thereby allowing him to enjoy the profit
that the company makes. The part of the company owned is equivalent to the percentage of shares that he has purchased.
As a partial owner of the company, he will be kept informed about company news and updates.

Portfolio diversity
Investing in shares adds diversity to the investment portfolio. The portfolio could now give investors several sources of
income – from real estate, stocks, interest earned from bank accounts apart from his chief source of income.
Minimizing loss
The Indian share market comprises a number of companies, enabling investors to distribute their investments rather than
committing all their resources into one. If the losses of one company lead to the depreciation of some of their shares, the
successes of the other would help balance out their losses.

Easily accessible money

The money put into some types of investments, such as fixed deposits, cannot be accessed until the investment has
matured.

In contrast, buying shares allows investors to sell them at any time, without a limit. The amount resulting from this
transaction may be easily transferred to their bank accounts.

Combating risks
The primary fear when it comes to trading in the share market is unexpected losses. This may be overcome through stop
loss, a feature that enables investors to give a mandate to their brokers about a specified price limit. If the value of their
shares falls below this limit, they will be automatically sold, thereby saving them from incurring great losses.

Added benefit of dividends

A dividend is the payment that investors receive from the overall profit that a company makes. This amount may be paid in
the form of money or more shares. It is important to invest wisely and choose a company that is trustworthy, because
paying dividends to investors is not compulsory. However, most multinational corporations and established businesses do
offer dividends, as this widens their shareholder base.
 DAY - 5
WHAT IS EQUITY?
One of the benefits of trading in the share market is that investors can become partial owners of a company. These shares,
offered by companies in return for money, are called equities. In the Indian stock market, equities are available for trading
at the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

An equity market, also known as the stock market, is a platform for trading in company shares. It is the place where buyers
and sellers meet to trade in listed companies. Listed companies are those entities that have offered some part of their
equity to public investors.

Understanding an Equity
Equity consists of funds that shareholders invest in a company plus a certain amount of profit earned by them that is
retained by the company for further growth and expansion.

Equity is a primary asset class when it comes to investing and diversifying one’s portfolio. Trading in equity needs in-depth
analysis and research of the share market, services that Angel Broking offers to all of its investors. Additionally,
derivatives allow equity to diversify beyond just shares into securities such as bonds, commodities and currencies.

Trading in Equity
Equity may be traded in the primary market, when a company makes an Initial Public Offering (IPO) and new securities may
be bought. Shares that have already been issued are bought and sold in the secondary market. Investors may also own
private equity, that is, shares of a company that is still private and not listed on the bourses. In order to trade in equities,
investors must have a demat account and trading account, and Angel Broking offers both of these.

Benefits of Investing in Equity

 Share market investments, in comparison to other types of assets, have given one of the best returns during inflation.
This enables investors to maintain their current lifestyles without cutting costs even when the prices of goods are steadily
increasing.

 Equity, while being a risky investment, offers higher returns than a savings account or a fixed deposit because the profit
that may be earned is virtually unlimited

 It is possible to minimize risks and maximize profits through the use of equity derivatives, specifically by trading in the
Options market

 Using sound share market knowledge to invest in equity is the key to building a large corpus for a future financial need,
because equity gives high returns in the long run

 Investing in the equity of reputable companies has the added benefit of dividends. Dividendsare payments that
shareholders receive from the company’s earnings. While giving them out is not compulsory, established businesses do
pay dividends to increase their shareholder base.
Equity for a Shareholder
Apart from knowing the value of equities in which one has invested, it is also important to know the value of personal share
of equity, which may be calculated by subtracting total liabilities owed from total assets owned.

Equity = value of assets – value of liabilities

Equity investment returns

Return on equity measures a company’s ability to use its investors’ funds to increase its profit and earnings. It is important
to keep track of equity returns to understand if there are long-term benefits from investing in a particular company.

Types of Equity Market

 Primary Market: Every company that proposes to go public must come out with an initial public offering (IPO). During the
IPO, the company offers a certain portion of its equity to the public. After the closing of the IPO, the shares are listed on
one of the stock exchanges, which are an important component of the stock market. The primary exchanges in India are
the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

 Secondary Market: After the listing of the IPO shares, these are traded on the secondary market. This platform offers the
initial investors an option to exit their investments. In addition, investors who failed to procure shares during the IPO can
purchase these from the secondary market. Trading in the Indian stock market is commonly done through brokers. The
brokers act as intermediaries between the stock exchanges and the investors.

Equity Market Procedures

 Trading: The stock exchanges provide an automated screen-based trading platform that is fully automated and
computerized. The platform is an open trade system where buyers and sellers can see all the trades and place their
orders to suit their personal requirements.

 Clearing and Settlement: The exchanges clear and settle all the trades that are executed during the trading day. These
exchanges operate well-defined settlement cycles without any deviations and/or deferments from the procedures. The
trades during the trading session are aggregated and positions are netted off with the objective of determining the
liabilities of the trading members. These procedures also ensure movements of the funds and shares are completed in
the right manner. The settlement cycle adopted by the exchanges operating in the Indian stock market is T+2. This
means that all securities and funds movements are completed two days after Day 1 (which is the day on which the trades
are executed). Under the T+2 cycle, buyers receive credits of the shares in their demat account, and sellers receive the
sale proceeds in the bank accounts that are linked to the trading account within two days.

 Risk Management: A widely known stock market basic is that investing in the equity market has several risks. The stock
exchanges have developed a comprehensive system for risk management. This system ensures the investors’ interests
and prevents fraudulent activities by the companies. The stock exchanges constantly upgrade the risk management
system to pre-empt market failures and stay abreast of the changing mechanisms. Some components of the risk
management system include margin requirements, pay-ins, and voluntary close-out facilities, and liquid assets.

Equity market investing can help investors meet their future financial requirements by beating the rising prices due to
inflationary pressures. Understanding the stock market basics and learning more about the market and its regulation, and
following a disciplined approach to share market investment can provide huge returns in the long run.
 WHAT ARE EQUITY DERIVATIVES?
Equity as assets
The shares you own, which are equity securities, can act as underlying assets that lend value to financial instruments called
derivatives. Assets also include bonds, commodities, and securities, and their value is dependent on price movements of
stocks in the Indian share market and profit earned by companies. The value of a share is measured through its share
price.

Derivatives
A derivative is a security in the form of an agreement signed between two or more entities to buy or sell assets in the future.
This agreement is called a contract. Investors make profits by anticipating the future value of that asset.

Benefits of derivatives
1. Risk management:
Investors trade equity derivatives in order to transfer or transform the risks associated with assets. This risk is shifted from
risk-averse individuals to those who undertake heavy risks in the share market, thus allowing the former to enhance their
safety.

2. Physical settlement:
Many investors, while retaining their shares for a long term, wish to reap the benefits of price fluctuations in the short term.
This can be achieved through physical settlement, thereby allowing you to earn money on idle shares.

3. Protection against fluctuation:

The process of hedging involves investing in related securities to reduce the risk of an adverse change in prices of an asset.
This will not only allow you to protect yourself from a fall in the prices of shares that you own but also act as a safeguard
against the rising prices of shares that you wish to buy.

4. Arbitrage trading:
Arbitrage trading involves the simultaneous selling of an asset in one share market and buying in another to profit from the
difference in price. In India, these two markets are the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
A profit is earned because the share has more value in one market and is cheaper in the other.

5. Margin trading:
While trading on a contract, you only pay a margin and not the entire amount, which could sometimes run into large
amounts. This will allow you to maintain a high outstanding, and the profit earned from accurate predictions results in an
exponentially high growth.

Types of derivative contracts

 Futures are contracts that state that an investor must buy or sell an asset at a specified time for a specific price. The
nature of futures contracts are such that unlimited gains and losses result from trading activity.
 Options are different from futures such that there is no obligation on the part of the buyer to hold the terms of the
agreement. The seller, on the other hand, is obliged to comply with the contract, that is, he must sell the shares. Trading
in the Options market involves unlimited gains but limited losses.
 IMPORTANT FACTS TO KNOW ABOUT
DIVIDENDS
As known, shares comprise a certain portion of an organization. Several profit-making companies listed on the share
market share their profits among shareholders, which is the primary objective of paying dividends. Companies distribute a
small component of their profits as dividends to the investors. This becomes an important source of earnings for investors
who stay involved in the share market for a longer period of time.

Because dividends are a minor portion of company profits that are returned to the investors, they provide additional
incentive for individuals to hold on to their stocks even if the company is not growing at high rates. This is an
important share market basic, which all investors must remember.

Companies utilize dividends to share the annual profits directly with the shareholders. Generally, it is paid as cash; the
organization pays a small percentage of the earned profits to every shareholder. Sometimes, this profit share could be in
the form of offering additional stocks to the investors.

Important Facts to Know about Dividends

 Periodic Payments: Most companies pay an annual dividend based on the total profits made during the year. In certain
instances, organizations may pay quarterly dividends or special one-time dividends if exceptional profits have been
earned through unique events.

 Taxable: Investors need to bear in mind that income earned from dividends is taxable as per the Income Tax Act, 1961.
An accountant should ideally be consultant for clarifications and more details on this.

Types of Dividends
Companies can either pay fixed rate, referred to as preferred dividends, or they can pay variable dividends based on the
earnings, known as common dividends.

Investors should remember one thing about share market investment — companies are not obliged to make these
payments by any regulatory guidelines. However, preferred shareholders are more likely to receive these payouts, unless
the companies are going through exceptional financial difficulties.

Dates to Remember
 Declaration Date: This is the date when the company determines the payment date for the dividend, the ex-dividend rate,
and the dividend amount.

 Record Date: The companies compile the list of all the shareholders as on the record date. All these investors are
eligible to receive the declared dividends.

 Ex-Dividend Date: This is often a few days before the record date. The primary objective of this date is to ensure
pending transactions, if any, are completed prior to the record date. Any investor who does not own company shares
before the ex-dividend date will be ineligible to receive the dividends for the said period.

Benefits of Dividends
 For Companies: Organizations on the share market pay dividends to retain investors by keeping them happy. It is often
perceived that dividend-paying organizations have progressed from the growth stage, which means they cannot keep
pace with the rate of growth expected by the markets. Organizations that do not reinvest their profits to grow their
 companies pay dividends to shareholders. Regular dividends make the stock appealing to investors, which, in turn, helps
in increasing the price of the share.

 For Investors: Dividends provide investors a stable return on their investments, which is low risk. Individuals who are
risk-averse can be assured of investing their money in stable companies with low growth but with almost no risk of a fall
in share prices, which can then risk their capital investments. In addition, as the organizations continue to grow, the
dividends increase, which raises the value of the stock for the investors.

Investors need to bear in mind that bigger dividends do not always mean better. It is generally seen that companies paying
high dividends are unable to sustain these rates in the longer period. Thorough research and exercising caution while
choosing dividend-paying companies will help sustain periodic returns on investments in the share market.

STOCK MARKET BASIC GLOSSARY

 Agent: - In the stock market, an agent refers to a brokerage firm which buys or sells shares on behalf of the investor.
 Ask/Offer: - Lowest price at which an owner agrees to sell the shares.
 Assets: - Assets refers to the property owned by the company such as cash, equipment, land, technology etc.
 Bear Market: It is a market situation where the stock prices fall consistently.
 At the money: A situation at where the options strike price is same as the price of the underlying securities.
 Beta: - It is a measurement of relationship between stock price of any particular stock and the movement of whole
market.

 Bid: - The highest price that a buyer is willing to pay for a particular stock.
 Blue Chip Stock: - Stock of well-established and financially sound companies that have a market capitalization in
thousands of chores.

 Board Lot: A standard trading unit which is defined by a particular exchange board. The Board lot size depends on the
per share price. Some common board lot sizes are 50, 100, 500, 1000 units.

 Bonds: It is promissory note issued by the government or a company to its buyers. It illustrates the specified amount
held for a specified time period by the buyer.

 Book: It is an electronic record that is used to manage all the pending buy and sell orders of particular stocks.
 Bull Market: A market situation where the price of the stocks increases rapidly.
 Call Option: It is an option given to investor the right to buy a particular stock at a specified price and time which is not an
obligation.

 Close Price: The final price at which the stock is sold or traded on a particular trading day.
 Convertible Securities: A security (bonds, debentures, preferred stocks) by an issuer that can be converted into other
securities of that issuer are known as convertible securities.

 Debentures: A form of debt instrument which is not secured by physical assets or collateral.
 Defensive Stock: A type of stock that provides a constant rate of dividends even in the periods of economic downturn.
 Delta: The ratio that compares the change in the price of the underlying asset to the corresponding change in the price of
a derivative.
 Face value: It is the cash value or the amount of money the holder of a security is going to earn from the issuer of the
security at the time of maturity.

 One-sided Market: A market that only has potential sellers or only potential buyers but not both.

RISK MANAGEMENT IN STOCK MARKET

Stock investing is characterized by a strong risk-return correlation. High risks mean greater returns and vice versa. Risk
management is the act of identifying and assessing the potential risk and developing strategies to minimize these and earn
maximum possible returns.

Risk Management Strategies

 Following Market Trends: Many investors believe that investing against the market trends can yield them higher returns.
However, following the trend is one of the most important stock market strategies to mitigate investment risk. The
difficulty in this strategy is being able to identify the trend because the markets are dynamic and constantly changing.
Being able to spot the short-term trends within the longer duration is a difficult task.

 Diversifying Investment Portfolio: The Indian stock market provides investors several financial products, such as
equities, bonds, derivatives, and mutual funds. Investors can opt for more than one of these financial instruments to
diversify their portfolios. Further diversification can be achieved by including financial products offered by different
companies belonging to distinct sectors. This protects the overall returns from the investments from market fluctuations
and if a specific sector or company moves in an unfavorable way, the other investments in the portfolio can achieve the
balance within the investors’ portfolios.

 Being Patient and Avoiding Quick Decisions: Several investors make quick and hasty decisions with every small
movement in the price of their investments. Moreover, another stock market tip that investors forget to adhere to is
taking the time to do their research and due diligence before making their share market investmentdecisions.
Determining the financial objectives prior to investing and focusing on both short-term as well as long-term objectives will
help investors enjoy maximum returns on their stock market investments.

 Planning the Trades: Planning and developing the strategy helps win wars. This is true for investing in the Indian stock
market too. Pre-planning can make all the difference between success and failure through stock investing. Using
stop-loss and take-profit points are useful instruments in planning the trades. Successful investors pre-determine the
entry and exit price levels to calculate the possible returns against the potential of the shares hitting these price levels.
On the other hand, unsuccessful traders make investments without considering the prices at which they will buy and sell
the financial instruments. They often trade with emotions; they continue holding on to their positions even when the price
decreases, in the hope of a turnaround, and fail to book profits when the price rises with the greed of making higher
profits.

 Stop-Loss: This is the lowest price that the investor is willing to sell and prevent further loss. Setting a stop-loss point is
useful when the market does not move as per the investor expectations. It is beneficial in preventing the ‘price will come
back’ mentality and limiting the loss on the investment.

 Take-Profit: This is the price at which the investor is willing to sell his investment and book profits. This point is beneficial
to reduce the risks when the possibility of further price increase is huge. Booking profits on stocks that are nearing their
resistance levels after large gains ensures that investors sell these before consolidation occurs and prices begin to
decrease.
The stock market is risky and smart investors take advantage of risk management strategies to mitigate it. Careful and
timely use of various risk mitigation tools ensures investors can maximize profits through stock investing.

INVESTMENT OPPORTUNITIES IN INDIAN STOCK

MARKET
Why do People Invest in Share Market?
The main reason for investors to enter the Share market is to make profits. Investors buy shares for the specific reason of
getting income. Though investing in shares brings with it a number of risks, it can reap good returns over the long term.
Investors receive dividends from the overall profit that the company makes. Dividends can be given the form of cash, more
stocks and securities. Investing in shares also allows you to sell anytime you wish, thus providing easy access to your
money, in case you need cash for an urgent expense.

Share trading gives investors an opportunity to own the company. The extent of ownership of a company is in relation to the
percentage of stocks you own. As an owner, you are bound to receive company performance reports, news and latest
updates.

Know the Best Investment Opportunities in Shares

Shares offer tremendous investment opportunities. There are two ways of earning money through shares—one is you get a
part of the company's profit every year, which is known as the dividend. This acts as a source of regular income. Secondly,
if the company expands, your shares become more valuable, which gives your investment an additional worth. You can
trade shares through a traditional stockbroker, an online broker or an investment manager.

Shares also offer divisibility where you sell a part of your shares in case you need cash for some purpose. People also buy
shares to have a stake in companies which are likely to perform well, thus giving them a sense of ownership. It also helps
to create a diverse investment portfolio. Buying shares also allows easy access to your money as you can easily buy and
trade shares without having to cough up a penalty.

Earn Profits by Investing in the Share Market

The ultimate goal of investing in share markets is to earn profits. You can make quick bucks from long-term investments by
keeping abreast of the latest happenings in the share market, and the economic and commercial scenario of the country.
Above all, you have to identify the current competitive and best-performing industry and sectors. Choosing the best and
right shares is another important aspect. In order to identify which stock to invest in, an investor needs to judge the financial
strength of the company by analyzing the sales revenue, EPS, liquidity of the company, debt and valuation of the company.
Once you’ve identified which shares you want to invest in, you can earn profits through dividends and long-term
investments. Dividends are paid to the investor as part of the company’s profits and act as a source of regular income. If the
company expands, your shares become more valuable, which gives your investment an additional worth.
 HOW YOUNG INVESTORS CAN MANAGE
PORTFOLIO?
When it comes to youth, ‘stock market’ is one of those terms that may not seem very familiar to them. Whether it comes to
the jargon being used or the process of buying and selling stocks, share market isn’t a friendly term. However, it is only wise
to think of investments and savings as early as possible. Also, one of the possible barriers for this distance with regard to
trading is a lack of knowledge in the stock market. Such doubts can be overcome through one’s own learning as well as
some guidance. There are also a number of classes that youngsters can take in order to clear their basics.

So if you are a young investor, here are a few things that will help you build a portfolio and manage it:

Begin Early
The day you begin working, it is time to start saving. This is also one of the best times to save because you don’t have any
financial commitments. An early saving adds to more saving which also means bigger investment.

Diversify
Choose your stocks across a broad range of market categories. You can invest in funds such as index funds wherein
investments can be made in a combination of risk and good returns. This leads to a balanced investment pattern.

Minimum Cost
At the time of investing capital, make investments in funds which have low fees. Save up on money which is otherwise
needed for commission or management fees. Therefore, this keeps your investment cost to minimum.

Discipline
One of the best answers on how to trade in stock market is to trade in a disciplined manner. Timely and regular
investments are important to build your portfolio.

Asset Allocation
Allocate a certain percentage of your investment portfolio to different types of stocks such as dividend paying stocks,
growth stocks, index funds, etc. This way you can re-balance the portfolio so that it can sustain any fluctuations in the
market.

Investing has become very convenient for every type of trader through the online mode. Whenever you wish to check the
prices of your stocks, you can check live stock market updates irrespective of where you are.