Stock_Exchange

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Stock Exchange……:

Stock Exchange…… A Place to make BIG MONEY FAST MONEY and…. EFFORTLESS MONEY

When do you invest….:

When do you invest…. More Money at Present than your Consumption Requirement Giving this to someone whose Present Consumption requirement is more than you Earn a return in the form of Interest, Dividend and Capital Gains

Investment Attributes…. How to Evaluate your investments…:

Investment Attributes…. How to Evaluate your investments… Rate of Return Risk Marketability Tax shelter Convenience

Rate of Return….:

Rate of Return…. Current Yield + Capital Gains Yield Current Yield = Annual Income ( Div) Capital Gain = End Price – Start Price _______________________________ Start Price

Risk…:

Risk… It is the variability of its return and by how much the Individual Investment deviates from the expected value. For Eg if one invests ins shares where the highest return is say 40% and the lowest return can be a loss of say 10% then it is VERY RISKY as the difference between the two values is very HIGH

Marketable…:

Marketable… It can be transacted quickly The transaction cost is very low The price change between two transactions is neglible

Tax shelter…:

Tax shelter… Initial Tax Benefits. Continuing Tax Benefits Terminal Tax Benefits

Convenience..:

Convenience.. Can the investments be made readily? Can the investments be looked after? Is it convenient to invest?

Risk V/S Return Trade Off…:

Risk V/S Return Trade Off… Higher the Risk Higher the Return Various Investment Avenues and their Returns and Risk Schedule Financial Leverage

Need for a Stock Exchange…:

Need for a Stock Exchange… A route for Entry and Exit at any point of time A Measure of investor safety and protection Trade Guarantee and mechanism of Redresser of Investor’s grievance.

Need for Stock Exchange…:

Need for Stock Exchange… A Place where the Corporate can raise capital and channelize the savings of the general public Listed Companies have a credibility and better market position and a brand image

Players of the Stock Market…:

Players of the Stock Market… BULLS BEARS STAGS PIGS CHICKENS

Other Players of the Stock Market…:

Other Players of the Stock Market… Taraniwalla Badla Financer Undha Badla Financer Jobber

Bulls…:

Bulls… They are the Optimist who BUY as they are sure the price of the shares would appreciate They are also called the TEJI WALLAS When the Buyers outnumber the sellers , we say there is a BULL RUN or TEJI They are the DEMAND side of the market

Bears…:

Bears… They are pessimist and believe that the future prices of the shares would fall They are called the MANDI WALLAS When the sellers outnumber the buyers we say the market is going through MANDI They are the supply side of the market

STAGS…:

STAGS… They are the investors who invest in a IPO They sell the shares immediately on listing They are required for the Primary market They are the short term investors who make the IPO market active

PIGS…:

PIGS… They are investors who buy on TIPS They do not study about their investment They normally have surplus funds and are ready buyers in the BULL run. If the PIGS outnumber the market we see that there is a lot of movement in the Z group shares

Chickens…:

Chickens… They are the general public who would keep enquiring about the market but would NEVER INVEST. They are just interested in knowing how the market is functioning and would keep a watch on the market If the market is full of chickens then there would not be any trades taking place

Taraniwallas…:

Taraniwallas… Most of the Big brokers who deal on their own account on the stock exchange are termed as Taraniwallas They are the High Net Worth Brokers who can make or break a market price

Badla Financer..:

Badla Financer.. When a person is bullish about a shares and buys a shares and wishes to carry forward his position then a financer who finances this upto the next settlement for a fee is called a badla financer BADLA is a UNDATED FUTURE whereby a trade is carried forward till such time as is favorable to a buyer/seller

Undha Badla Financer:

Undha Badla Financer When a person sells a shares and on the settlement day he approaches the undha badla financer to give him shares for a fee. Undha badla is reverse of a BADLA whereby short selling is done of shares which are not in possession of so as to make money.

Jobber:

Jobber He was the designated representative of the stock broker who would go on the floors of the stock exchange and give two way quotes He is the market maker for a given scrip He creates the liquidity for a given scrip

Other Players of the market:

Other Players of the market Stock Exchange Members ( Brokers) Depository / DPs Custodian Portfolio Managers Foreign Institutional Investors (FII)

Other Players of the Stock Market :

Other Players of the Stock Market Merchant Bankers Book Runners Share Transfer Agents Underwriters Venture Capital Funds

The Different Types of Markets…:

The Different Types of Markets… Primary or New Issue Market Secondary Market

Primary Market:

Primary Market 3 Different Offerings Public Issue – New Issue where the co is listed on any of the stock exchanges Rights Issue - Privilege of existing members to contribute to further capital Private Placement – Privately marketing the shares to a group of investors

Secondary Market:

Secondary Market A Market where outstanding shares of a company are traded on the floors of the stock exchange or through a electronic mechanism where the shares are traded This gives liquidity to the shares and an exit route for investors who wish to sell their shares

Secondary Market Mechanism..:

Secondary Market Mechanism.. Trading – is done on the market from 9.30 to 3.30 p.m. Settlement – Rolling ( t + 2) Demat A/c Other requirements…

The Does and the Don’t’s …:

The Does and the Don’t’s … Always deal with a registered stock broker Always get a copy of valid contract note giving all the details of the trade Always give instructions for purchase or sale in writing and not on phone Always check in your DP account if the share have come in your account

The Does and the Don’t’s…:

The Does and the Don’t’s… Never give out your client code or id to any stranger Please check every quarter with the DP if you have recd your dividends/ bonus and other benefits. Never BUY on tips Never SELL on panic

The TWO emotions at play in a stock market…:

The TWO emotions at play in a stock market… GREED FEAR

How to make value investment…:

How to make value investment… Decide your investment horizon Decide your investment appetite Study and scrutinize different industry/ company Make a clear distinction between cyclical / non cyclical shares, share with steady return and growth shares, are in FMCG sector / PSUs. Find the right timing

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