The secondary stock market is becoming risky due to rising interest rates of financial institutions and volatile politics.
Small investors are afraid to invest in the secondary market. Now, how can a small investor do share trading? Some of the comments are as follows.
1. The benefits of investing for a long time
While investing in the stock market, some small investors are afraid to invest. They fear that money will sink because of market fluctuations. Because of this they invest money only for a short time.
Some small investors invest in the morning and sell in the afternoon. This is wrong. The habit of spending money in the morning and selling during the day gives a small return on your investment. Therefore, for a big profit, the investment period should be long.
2. Invest the money you don't have for a long time:
We have all seen that investors invest their essentials in stocks. When investing in such a situation, they can neither invest for a long time nor bear the loss.
For such investors, investing in stocks can be a very risky game. After all, it's okay to make a profit. If there is a loss, it will only succeed in bringing mental and financial problems to such investors.
This is also the reason why you need money. Don't spend that money on shares. Don't worry about losing money and keep it safe in the market.
p>3. Don't worry, the stock market is not a gambling house
Small investors consider shares to be a game of chance. On the contrary, stocks demand a strategy. Which company's shares are you buying? It is important for an investor to be aware of the current situation of the company in the stock market.
Seeing the low price, you can buy shares like Java game and take advantage of it for some time. However, this phenomenon may not last for many days due to a lack of information in the market.
The main consequence of this is a loss to the share investors. Therefore, before buying shares of any company, it is necessary to know well about the current condition of that company and the condition of its shares in the past.
p>4. Hire Professionals:
Many investors also take advantage of trading professionals due to a lack of time and information. There are many such professionals in the market who give you tips on how to invest your money in the right place.
But for that you have to pay a certain fee to them. But in some cases, it seems that the professionals are taking advantage of the shortcomings of the investors.
They also encourage investors to invest money in many places for their own benefit. Investors can show only 40,000 where there is a benefit of 100,000. For this reason, it is important that you do not rely on professionals after hiring them.
p>That's why you want to invest in the company. Also keep in mind the current situation, past situation, current situation seen in the market, etc. in different ways.
If you are careful, professionals will not be able to deceive you by lying. You also need to be aware of some of the professional teams of the stock.
For example, what is the basis of the stock market and how it works?
p>Regular and desired shares or debentures cannot be bought in the primary market of securities. And the company will not buy back the shares we bought. You have to go to the market to invest in shares or to increase investment and to sell the shares bought in the primary market.
Moreover, many people are forced to enter the stock market unintentionally due to the shares being sold in the name of local, project-affected, people's investment, basis of prosperity, etc.
Listed securities (shares, debentures, The market where mutual funds are traded is called secondary market or share market or capital market.
nbsp;It is operated by Nepal Stock Exchange (NEPSE) and regulated by Nepal Securities Board (SEVON). With the help of computer technology and software, business is conducted in a systematic and transparent manner in this market where buyers and sellers never meet.
Nepse has given trading permission and responsibility to 50 brokerage companies (stock brokers or share brokers or brokers) that have received permission from SEVON to assist buyers and sellers.
They are responsible for buying and selling the securities on behalf of the buyer and the seller in the demat account of the buyer with the prescribed commission and the seller will get the amount sold. Preparation for it as well as supply and demand, Be aware and aware of price and some other aspects. In a technology-based stock market, it is important to at least understand technology, access and use computers and software.
p>Essential thing and preparation
Bank accounts, Demat account,s and transaction accounts are mandatory for buying and selling securities in the secondary market. If you do not have a bank or demat account in your name, you should open an account with a suitable bank. Since most of the banks also provide DP service, demat account can be opened in the same bank or broker or other DP service provider.
You can then open a 'Trading Account' by taking a photocopy and photo of citizenship along with bank and demat account proof (statement or letter) and going to the office of a licensed stock broker and filling up a customer identification (KYC) form.
p>After opening a 'transaction account', a special customer identification number is obtained and the same number is used for transactions. Rs. Permanent Accounts Number (PAN) is mandatory for buying and selling securities above Rs 500,000.
In addition, to get information about the securities in your Demat account and to transfer the sold shares from electronic system to computer or mobile, the service of 'My Shares' provided by CDS and Clearing (CDSC) can be availed. An annual fee of Rs. You can get a password and user ID for 'My Share' facility by paying Rs. For this, you have to have your own email address.
p>For online trading, you can enter into an additional agreement with the broker and buy and sell securities from mobile or computer by entering the website (TMS) through the internet with 25% deposit and username and password. Go to the broker's office, buy-sell method, payment method, share selection method, It is good to get practical knowledge about cost-benefit and risk. A lot can be learned from Nepse's website or company and other online sites.
The decision to buy or sell the shares of which company should be bought and sold along with the price and lot order . Currently, one can enter the order of buying and selling securities by attending the office of the stock-broker who has opened the trading account, (b) by placing orders through media such as telephone, MMS or email, and (c) through online software.
p>(A) Purchase Order:
Beware of buying and selling based on buying or selling orders from brokers or online. When giving an order, it should be made clear how many shares of which company, at what price you want to buy or sell and how long the order will last for one day, once or when there is no transaction. Orders can be placed by setting a fixed price, price range, or prevailing market price.
In online trading, 'Day' (one day), 'GTC' (until canceled), 'GTD' (up to the specified day) and 'AON' (all lots will be bought or canceled in full order), depending on the order retention period. Orders can be entered through IOC (immediate or partial purchase of all or part of the securities) and FOK (immediate purchase or cancellation of all securities).
p>(B) Price:
The most complex and controversial issue in the stock market is price. There is no fixed price like other goods and services. Even the price of the same securities on the same day may vary in each transaction. In general, there is a misconception that brokers and, according to some, large and institutional investors, determine the price of shares and buy and sell at the price they want. In fact, the demand and supply of shares and pricing are determined by mutual understanding between buyers and sellers.
As long as the shareholder does not want to sell at any price and another buyer wants to buy at that price, there is no transaction. The broker only buys and sells at the price agreed by the buyer and the seller.
p>Since the purchase price determines the profit and loss of the transaction and the invisible asset of the investor (virtual property), everyone tries to influence the price. Buyers are likely to call everyone who looks appropriate if there are only a few. Sellers can also provoke buying and selling by influencing prices by creating a lot of greed and demand or by controlling supply or by showing hope.
Therefore, practical knowledge and study is required to make a wise decision rather than regretting the decision of buying and selling in haste and excitement. The reference price can be fixed. Orders can be bought or sold on the basis of prevailing price or reference price as per requirement and priority.
p>Who's in the market now, how many, Even if you don't know at what price to buy or sell, how many lots will be sold and how many lots will be bought at any price in the market? And at what price was the last transaction done? How many rupees and what is the percentage below or above? Market depth information can be found on Nepse's website or online system. For example, the market depth of a company's stock is given in the table.
The market depth table shows the number of shares being bought or sold, the price, as well as the order and how many people, want to buy the said lot at that price. Trading is done after matching the lot with the price.
p>As per schedule Rs. Out of 235, 400 lots can be sold immediately and Rs. If you want to buy at 236, there is a possibility of getting up to 2,400 lots immediately. Purchases or sales orders can be entered by setting the price below or above 2% of the price.
There is a savings rate of 0.015 percent of each transaction amount and a DP fee of Rs. Nepse gets 20 percent of the paid broker commission. Debentures and mutual funds charge a commission of 0.2, 0.25 and 0.3 percent, depending on the transaction amount. Therefore, the actual cost of a share bought for Rs 100 is around Rs 101 and when it is sold for Rs 100, it is only around Rs 99.
p>(B) Book-Close Date:
Listed companies set the book-closing date to prepare a list of beneficiary shareholders for dividends and rights and other special decisions. In case of distribution of bonus and entitled shares, only those who bought or held shares till the day before the book closing date will get the specified bonus and entitlement. Moreover, since the price will be adjusted on the basis of bonus and entitlement rate, one should be very careful about the book-closing date and the adjusted reference price.
p>(C) Price and payment of shares:
As per the existing rules, the amount should be received by the day after purchase and in case of sale, the shares should reach the concerned broker. The amount can be paid to the broker by check or online and the shares can be paid to the broker by 'EDIS from my share' or by DIS (Debit Instruction Slip from DP). Failure to deliver the sold shares within the stipulated time will result in payment of a close out penalty of 20 percent of the amount sold.
p>(D) Risk bearing and management:
Share investment and trading is the most risky investment and trade. Along with the company's business and economy, there is also a serious risk of market price fluctuations. Therefore, in short-term investments, the market should be closely monitored and the target profit or loss should be booked.
Long-term investments must focus on the company's business, management, profits, dividends, costs and returns, risk taking and management ability rather than market value. In the pursuit of higher profits, stock trading and investing can be very risky.
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