Stock market
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Stock exchanges provide a platform for buyers and sellers to trade stocks, bonds, and other securities. Companies list their shares on stock exchanges to raise capital from investors. There are various types of traders on stock exchanges, including brokers who execute trades for clients, jobbers who deal directly with brokers, and speculators who take high risks seeking high returns. Regulators like SEBI oversee stock exchanges to promote orderly and fair trade. To invest, one must open a demat account similar to a bank account to enable buying and selling of listed securities.
Stock market
- 1. EASY WAY TO EARN MONEY, EASY WAY TO LOOSE MONEY BY Dr. Seema Thakur STOCK EXCHANGE
- 2. WHAT IS STOCK EXCHANGE? . It Define as :- The securities regulation act of 1956 defined stock exchange as: “an association , organization , or an individual which is established for the purpose of assisting , regulating , and controlling business in buying ,selling and dealing in securities.”
- 3. Meaning : In brief • This comes under treasury sector ,which provides service to stock brokers & traders to trade stocks ,bonds and securities. • Stock exchanges helps the companies to raise their fund. Therefore the companies needs to list themselves in the Stock Exchange and the shares will be issued which is known as equity or ordinary share and these shareholders are the real owners of the company . • Board of Directors of the Company are elected out of these Equity Shareholders only.
- 4. What is share and Share capital? • The total capital of company is estimated, registered and divided into units of equal value. This units are known as Shares • and collectively they are known as Share Capital. UNIT SHARE
- 5. FEATURES OF STOCK EXCHANGE It is an organized market It is a securities market It is an important constituent of capital market i.e., market for long term finance It is a voluntary association of persons desirous of dealing in securities stock exchange deals with only authorised member. It also deal in second hand securities i.e. Secondary Market. Stock Exchange works as per rules and regulations i.e. SEBI Guidelines.
- 6. IMPORTANT FUNCTION OF STOCK EXCHANGE Provide central and convenient meeting places for sellers and buyer of Increase the marketability and liquidity of securities Smoothen price movement It regulate company Management. Promote the habit of saving and investment Help capital formation Help companies and government to raise funds from the investors Provide clearing house facility.
- 8. Initial members who are still running their business in stock exchange are: D.S.Prabhudas &company Jamnadas Morarjee Champak lal Devidas Brymohan Laxminarayan
- 9. Traders in stock Market BROKER AND JOBBER speculation speculator Arbitragers Bull Bear Stag Lame Duck
- 10. BROKER AND JOBBER BROKER: He acts as an intermediary on behalf of others. A broker in a stock exchange is a commission agent who transacts business in securities on behalf of non JOBBER: He is not allowed to deal with the public directly .He deals with brokers who are engaged with the . Thus, the securities is bought by the jobber from members and sells to members who are operating on stock exchange as broker.
- 11. DIFFERENCES BETWEEN A JOBBER AND A BROKER A jobber is an independent dealer in securities, purchasing or selling securities on his own account A jobber deals only with the brokers ,does not deal with the general public A jobber earns profit from his operations i.e., buying and selling activities Each jobber specializes in certain group of securities A broker deals with the jobber on behalf of his clients. in other words, a broker is a middleman between a jobber and clients A broker is merely an agent, buying or selling securities on behalf of his clients A broker gets only commission for his dealings The broker deals in all types of securities JOBBER BROKER
- 12. SPECULATION Speculation involves trading a financial instrument involving high risk in expectation of significant returns. It also a practice of engaging in risky financial transactions in an attempt to profit from short term fluctuations in the market value of a tradable financial instruments. High-risk trades that are almost akin to gambling fall under the umbrella of speculation
- 13. The dealer in stock exchange who indulge in speculation are called speculator . A speculator is a person who trades derivatives, commodities, bonds, equities or currencies with a higher than average risk in return for a higher- than-average profit potential. The different types of speculators are : BULL BEAR STAG LAME DUCK SPECULATOR
- 14. BULL {TEJIWALA} He is speculator who expects the future raise in price of securities he buys the securities to sell them at future date at the higher price. He is called as bull because his activities resembles as a bull , as the bull tends to throw its victims up in the air through its horns. In simple the bull speculator tries to raise the price of securities by placing a big purchase orders.
- 15. BEAR {MANDIWALA} He is speculator who expects future fall in prices , he does an agreement to sell securities at future date at the present market rate . He is called as bear because his attitude resembles with bear , as the bear tends to stamp its victims down to earth through its paws . In simple the bear speculator forces of prices of securities to fall through his activities.
- 16. STAG {DEER} He operates in new issue of market . He is just like a bull speculator . He applies large number of shares in the issue market only by paying , application money , allotment money. He is not a genuine investor because , he sells the allotted securities at the premium and makes profit. In simple he is cautious in his dealings . He creates an artificial rise in prices of new shares and makes profits.
- 17. LAME DUCK He is speculator when the bear operator finds it difficult to deliver the securities to the consumer on a particular day as agreed upon . He struggles as a lame duck in fulfilling his commitment . This happens when the prices do not fall as expected by the bear and the other party is not willing to postpone the settlement to the next period.
- 18. 'Arbitrageur' An arbitrageur is a type of investor who attempts to profit from price inefficiencies in the market by making simultaneous trade that offset each other to capture risk- free profits. It seek out price discrepancies between stocks listed on more than one exchange by buying the undervalued shares on one exchange while short selling the same number of overvalued shares on another exchange, thus capturing risk-free profits as the prices on the two exchanges converge.
- 19. Largest stock exchanges IN THE WORLD LONDON STOCK EXCHANGE NEW YORK STOCK EXCHANGE SHANHAI STOCK EXCHANGE AUSTRALIA STOCK EXCHANGE TOKYO STOCK EXCHANGE HONG KONG STOCK EXCHANGE TORONTO STOCK EXCHANGE NASDAQ OMX STOCK EXCHANG IN INDIA NATIONAL STOCK EXCHANGE BOMBAY STOCK EXCHANGE CALCUTTA STOCK EXCHANGE COCHIN STOCK EXCHANGE MULTI COMMODITY EXCHANGE DERIVATIVES EXCHANGE OTC EXCHANGE PUNE STOCK EXCHANGE INTERCONNECTS EXCHANGE
- 20. LONDON STOCK EXCHANGE It was the first stock exchange established by east India company in 18th century in London. The top gainer of LONDON STOCK EXCHANGE is “Blue chip shares”.
- 21. BOMBAY STOCK EXCHANGE It is oldest and first stock exchange of India established in the year 1875. First it was started under banyan tree opposite to town hall of Bombay over 22 stock brokers. The top gainer in BSE is 100 companies in that GMR infra is first
- 22. NATIONAL STOCK EXCHANGE OF INDIA (NSE OR NSEI) The NSE of India is the leading stock exchange of India, covering 370 cities and towns in the country. It was established in1994 as a TAX company. It was established by 21 leading financial institutions and banks like the IDBI, ICICI, IFCI, LIC, SBI, etc.
- 23. Features of NSEI Nation wide coverage i.e., investors from all over country Ring less i.e., it has no ring or trading floor Screen-based trading i.e., trading in this stock exchange is done electronically. Transparency i.e. the use of computer screen for trading makes the dealings in securities transparent. Professionalization in trading, i.e., it brings professionalism in its functions
- 24. OVER-THE-COUNTER EXCHANGE OF INDIA (OTCEI) The OTCEI is a national, ringless and computerized stock exchange. It was established in october,1990. it started its operation in september,1992. Features of OTC 1. It is a nation-wide stock exchange. Its operational areas cover entire India. 2. It is a ring less stock exchange. The trading ring(i.e., trading place)commonly found in a traditional stock exchange is not found in the OTCEI. 3. It is a computerized stock exchange
- 25. SEBI REGULATE STOCK EXCHANGE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) The SEBI was constituted on 12th April,1988 under a resolution of the Government of India. On 31st january,1992,it was made a statutory body by the Securities and Exchange board of India Act,1992. The Companies (Amendment) Act,2000 has given certain powers to SEBI as regards the issues and transfer of securities and non- payment of dividend
- 26. Function Of SEBI Regulating the business in stock exchange and any other securities markets. Promoting and regulating self-regulatory organization. Registering and regulating the work of collective investment scheme, including mutual funds. Prohibiting fraudulent and unfair trade practices relating to securities market. Promoting education, and training of intermediaries of securities market
- 27. Power of SEBI • Power to approve the bye-laws of stock exchange • Power to inspect the books of accounts • Power to grant license to any person for the purpose of dealing in certain areas. • Power to delegate powers exercisable by it.
- 28. How to see the value of shares in stock exchange • SENSEX is an indicator to checkout in BSE • NIFTY is an indicator to checkout in NSE
- 29. How stock exchanges get money They get their money by listing fees paid by the corporation to have their company traded
- 30. The Daily graph of the companies is being showed in following manner
- 31. HOW TO DEAL AND INVEST IN STOCK EXCHANGE In order to deal with a securities one as to have an account called Demat a/c or Trading a/c. It is just like a bank account. Same procedure of opening the bank account is followed to open the a/c. But all the banks does not give this facility of opening the account , only few provide this facility. After demat a/c or Trading a/s is opened then the securities is bought and sold. The banks which gives facility of demat a/c in India is • ICICI Bank • Citi Bank • Bank of Baroda
- 32. HAPPY INVESTMENT WITH LOTS OF PROFITS END ************