Equity market or Capital Market isalso known as the stock market, Equity market is one of the
main component of the Financial Markets, Equity Trading refers to the Purchasing and selling of
securities, such as stocks and bonds of any listed company on a stock Exchange, In equity trading
Investors and traders participate in the ownership and potential profit of listed companies.
Equity market manage by two Market segment that is Primary Market and Secondary Market
both Market segment serves different functions
Capital Market
The Primary Market, also known as the new issue market or Initial Market, in primary Market newly
issued securities offer and sold to the public for the first time and this process is known as IPO
(initial public offer)
Primary market facilitates the capital-raising process for companies and governments. It
allows them to issue and sell securities to the public to generate funds for various purposes
Primary market involves issuers, such as companies or governments, and investors.
Companies issue new securities to raise capital for expansion, debt repayment, or other
financial needs, Investment banks and underwriters play a crucial role in the primary market.
They help companies navigate the IPO process,
Regulations: Equity trading or Stock market trading is subject to regulations to ensure fair
and transparent markets. Regulatory body of Indian securities market is Securities and Exchange board
of India (SEBI), main role of SEBI is to be over see and enforce rules to protect investors and maintain
market integrity.
Stock Exchange: stock exchange is a centralized marketplace where financial instruments, such as
share, stocks, bonds, commodities, currency and derivatives, are bought and sold,
The major role of a stock exchange is to provide a platform for companies to raise capital by issuing
securities and for investors to buy and sell those securities,
there are several stock exchanges in India, with the two major ones being the Bombay Stock Exchange (BSE)
and the National Stock Exchange of India (NSE).
BSE (Bombay Stock Exchange)
The BSE is one of the oldest stock exchanges in Asia and its established in 1875. BSE
located in Mumbai, Maharashtra and that place is known as DALAL STREET.
There are Thousands of companies are listed on the BSE these are covering various
sectors sub sectors of the Indian economy.
Sensex is index of Bombay Stock Exchange, full name of SENSEX is Sensitive Index, is
one of the key benchmark indices of the Bombay Stock Exchange (BSE) in India.
Sensex widely followed and influential indicator of the Indian stock market's overall
health and performance.
Sensex include best 30 Blue-chip companies, and the volatility of these 30 stocks
decide the volatility of Sensex, The Sensex reflects the combined performance of a
select group of stocks representing various sectors of the Indian economy.
NSE ( National Stock Exchange)
NSE was established in 1992 as the need for a modern and technologically advanced
stock exchange in India and its located as headquartered in Mumbai.
Like the Bombay Stock Exchange (BSE), NSE (National Stock Exchange) Listed Stocks
lists a significant number of companies from various sectors and subsectors.
The Nifty, known as the Nifty 50, Nifty is one of the main indices of the National
Stock Exchange of India (NSE). Nifty index is a widely followed and influential
indicator of the Indian stock market's overall economic health and performance.
Nifty 50,comprises 50 stocks representing various sectors of the Indian economy. All
These stocks are selected based on certain criteria, including their Market Cap and
Liquidity
In addition to the Nifty 50, the NSE also has sectorial indices based on their specific
industries. Like Nifty Bank, Nifty IT, Nifty Pharma, Nifty Reality, Nifty FMCG, Nifty Infra
and many more, which track the performance of stocks in their related sectors.
DP (Depository Participant)
In India, the central securities depository is the National Securities
Depository Limited (NSDL) and the Central Depository Services
(India) Limited (CDSL). These central depositories maintain
electronic records of securities.
Depository Participant (DP) is a financial intermediary that manages
the holding of securities such as stocks, share, bonds, ETFs in
electronic form and enables electronic transactions in the stock
market. In current scenario the context of stock market depository
participants, this term is often associated with entities that provide
depository services for securities traded on stock exchanges.
Depository Participants are entities that act like an intermediary
between the central depository and the investors. They also provide
depository services to retail, HNIs and institutional investors.
DPs can be any banks, other financial institutions, any brokerage
firms, or any other entity authorized by the depository to offer these
services to investors.
Key Responsibilities of Depository
- Demat Account Opening: Investors who want to hold their
securities in electronic form is compulsory to open a Demat
(Dematerialized) account with a DP. This account is similar to a bank
account but holds securities in electronic form.
- Dematerialization: Once the Demat account is opened, investors can
convert their physical share certificates into electronic form through
a process called dematerialization. This process eliminates the need
for physical certificates and facilitates electronic transfer and trading
of securities.
- Transaction Settlement: Depository Participants facilitate the
electronic transfer of securities between the Demat accounts of
buyers and sellers. This process is much faster, efficient,
transparentand very easy than the traditional system of transferring
physical share certificates.
- Corporate Actions: Depository Participants assist investors in
participating in corporate actions such as Dividends, Bonus issues,
Rights issues, Stock split, Buyback etc. These actions are credited
directly to the Demat accounts of the investors.
BROKERAGE FIRM
Individual investors usually execute equity trades through brokerage
firms. These firms act as intermediaries between buyers and sellers,
facilitating the trading process. Online brokerage platforms have
become increasingly popular, allowing investors to place trades
electronically.
Nirman Share Brokers Pvt Ltd is one of the leading stock Broking
company is central India having head office in Bhopal Madhya
Pradesh,
Nirman Share Brokers Pvt. Ltd. (NIRMAN) is a Stock Broking
Company. “NIRMAN” is providing broking services since 1987
under name & style of “NIRMAN INVESTMENTS” & converted in
private limited in the financial year 2001 with a view to providing
quality services & reasonable price for primary and secondary
market access to investors.
“NIRMAN” is a leading financial intermediary, having a diversified
customer base, broad range product offerings and State-of- the-Art
execution and servicing capabilities and believes that financial
inclusion can be achieved in Capital markets through
affordable institutionalized, professional set ups that bring
transparency and reliability to the table
The Company currently has in its fold a wide segment of clients
including Financial Institutions, Corporate, High Net worth
Individuals, Non-Resident Indians and Retail domestic investors. Its
broking product range covers Institutional and Retail EQUITY,
DERIVATIVES, CURRENCY, DP SERVICES, MUTUAL FUNDS, ON-LINE
TRADING, FIXED DEPOSITS, BONDS and a wide variety of Third Party
Distribution products.
The secondary Market is the final place where previously issued or already listed securities are
bought and sold to the investors, in the Secondary market where existing owners can sell
their securities to other investors
The secondary market involves investors and traders who can buy and sell securities that are
already listed previously, the secondary market all securities are traded between traders,
Regulations: Equity trading or Stock market trading is subject to regulations to ensure fair
and transparent markets. Regulatory body of Indian securities market isSecurities and
Exchange board of India (SEBI), main role of SEBI is to be oversee and enforce rules to
protect investors and maintain market integrity.
Stock Exchange : stock exchange is a centralized marketplace where financial
instruments, such as share, stocks, bonds, commodities, currency and derivatives, are
bought and sold,
The major role of a stock exchange is to provide a platform for companies to raise
capital by issuing securities and for investors to buy and sell those securities,
there are several stock exchanges in India, with the two major ones being the
Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).
BSE (Bombay Stock Exchange)
The BSE is one of the oldest stock exchanges in Asia and its established in 1875. BSE
located in Mumbai, Maharashtra and that place is known as DALAL STREET.
There are Thousands of companies are listed on the BSE these are covering various
sectors sub sectors of the Indian economy.
Sensex is index of Bombay Stock Exchange, full name of SENSEX is Sensitive Index, is
one of the key benchmark indices of the Bombay Stock Exchange (BSE) in India.
Sensex widely followed and influential indicator of the Indian stock market's overall
health and performance.
Sensex include best 30 Blue-chip companies, and the volatility of these 30 stocks
decide the volatility of Sensex, The Sensex reflects the combined performance of a
select group of stocks representing various sectors of the Indian economy.
NSE ( National Stock Exchange)
NSE was established in 1992 as the need for a modern and technologically advanced
stock exchange in India and its located as headquartered in Mumbai.
Like the Bombay Stock Exchange (BSE), NSE (National Stock Exchange) Listed Stocks
lists a significant number of companies from various sectors and subsectors.
The Nifty, known as the Nifty 50, Nifty is one of the main indices of the National
Stock Exchange of India (NSE). Nifty index is a widely followed and influential
indicator of the Indian stock market's overall economichealth and performance.
Nifty 50,comprises 50 stocks representing various sectors of the Indian economy. All
These stocks are selected based on certain criteria, including their Market Cap and
Liquidity
In addition to the Nifty 50, the NSE also has sectorial indices based on their specific
industries. Like Nifty Bank, Nifty IT, Nifty Pharma, Nifty Reality, Nifty FMCG, Nifty Infra
and many more, which track the performance of stocks in their relatedsectors.
DP (Depository Participant)
In India, the central securities depository is the National Securities
Depository Limited (NSDL) and the Central Depository Services
(India) Limited (CDSL). These central depositories maintain
electronic records of securities.
Depository Participant (DP) is a financial intermediary that manages
the holding of securities such as stocks, share, bonds, ETFs in
electronic form and enables electronic transactions in the stock
market. In current scenario the context of stock market depository
participants, this term is often associated with entities that provide
depository services for securities traded on stock exchanges.
Depository Participants are entities that act like an intermediary
between the central depository and the investors. They also provide
depository services to retail, HNIs and institutional investors.
DPs can be any banks, other financial institutions, any brokerage
firms, or any other entity authorized by the depository to offer these
services to investors.
Key Responsibilities of Depository
- Demat Account Opening: Investors who want to hold their
securities in electronic form is compulsory to open a Demat
(Dematerialized) account with a DP. This account is similar to a bank
account but holds securities in electronic form.
- Dematerialization: Once the Demat account is opened, investors can
convert their physical share certificates into electronic form through
a process called dematerialization. This process eliminates the need
for physical certificates and facilitates electronic transfer and trading
of securities.
- Transaction Settlement: Depository Participants facilitate the
electronic transfer of securities between the Demat accounts of
buyers and sellers. This process is much faster, efficient,
transparentand very easy than the traditional system of transferring
physical share certificates.
- Corporate Actions: Depository Participants assist investors in
participating in corporate actions such as Dividends, Bonus issues,
Rights issues, Stock split, Buyback etc. These actions are credited
directly to the Demat accounts of the investors.
BROKERAGE FIRM
Individual investors usually execute equity trades through brokerage
firms. These firms act as intermediaries between buyers and sellers,
facilitating the trading process. Online brokerage platforms have
become increasingly popular, allowing investors to place trades
electronically.
Nirman Share Brokers Pvt Ltd is one of the leading stock Broking
company is central India having head office in Bhopal Madhya
Pradesh,
Nirman Share Brokers Pvt. Ltd. (NIRMAN) is a Stock Broking
Company. “NIRMAN” is providing broking services since 1987
under name & style of “NIRMAN INVESTMENTS” & converted in
private limited in the financial year 2001 with a view to providing
quality services & reasonable price for primary and secondary
market access to investors.
“NIRMAN” is a leading financial intermediary, having a diversified
customer base, broad range product offerings and State-of- the-Art
execution and servicing capabilities and believes that financial
inclusion can be achieved in Capital markets through
affordable institutionalized, professional set ups that bring
transparency and reliability to the table
The Company currently has in its fold a wide segment of clients
including Financial Institutions, Corporate, High Net worth
Individuals, Non-Resident Indians and Retail domestic investors. Its
broking product range covers Institutional and Retail EQUITY,
DERIVATIVES, CURRENCY, DP SERVICES, MUTUAL FUNDS, ON-LINE
TRADING, FIXED DEPOSITS, BONDS and a wide variety of Third Party
Distribution products.
Orders and Transactions in Stock Market
In Stock Market investors can place various types of orders to buy or sell
stocks. Each order type has its own characteristics and these are used in
different trading scenarios.
Type of orders :
Market Order: This order type Facilitate to traders and Investors an
order to buy or sell a security or stocks at the best available price in the
current market. Market order execute immediately at the prevailing market
price. Basically this order type Used when the investors are given priority
to execution speed over price.
Limit order:This order type Facilitate to traders and Investors an order
to buy or sell a security or stocks at a specific price. Limit order Filled only
at the specified price and it may not be immediately executed if the market
does not reach at the particular limit price.
Basically this order type Usedwhen investors or traders want to control the
price at which the trade is executed.
Stop Loss Order: Stop-loss order is an order placed by trader or
investor to buy or sell a specific stock once the stock reaches a certain
price(trigger price). A stop-loss is designed to limit an investor's loss on a
security positions.
GTT order (Goods Till Trade): This is order that remains active until it
is either execute or cancel by investors. GTT order Convenient for investors
who want to set and forget an order for an extended period normally GTT
orders are valid for 1 year.
Day order: Day order is orderthat is valid only for the current trading
day.If not executed by the end of the trading day the order is automatically
cancelled.
IOC Order (Immediate or Cancel Order): IOC order must be executed
immediately if any portion of order is not filled is cancelled. IOC order
useful when the investor wants immediate trade execution but he is also
ready to accept partial trade execution.
Type of Trade :
Intraday Trade : Intraday trading is also known as day trading, it refers to
a trading strategy in which traders buy and sell financial instruments, such
as stocks, within the same trading day.
In other words, intraday trading involves opening and closing of any
positions within a single trading session, with no overnight exposure to
market volatility. The advantage of intraday trading is to capitalize on
short-term price movements and take benefits of intraday price
fluctuations.
Holding Or Delivery Trade: Delivery trading, often simply referred to as
"delivery," is a trading strategy in the stock market where investors buy
and hold financial instruments, such as stocks or securities, with the
intention of owning them for an extended period of time.
In delivery trading, investors take actual possession or delivery of the
Securities or stocks they purchase, and the ownership is transferred as unit
of share to their Demat accounts.
The categorization of Holding or Delivery Trades
is further delineated based on two distinct scenarios, considering their holding duration.
These two trade scenarios are Short term and Long term trade.
Short-Term Trade :
Short-term trading in the stock market refers to a strategy where traders
buy and sell financial instruments, such as stocks or securities, with the
intention of profiting from short-term price movements.
Short-term trading involves holding positions up to 12 months or 365 days
duration, often ranging from a few days to several weeks or months.
Traders often use short-term trading to focus on taking advantage of
market volatility and exploiting price fluctuations within a shorter time
frame.
Short-term trading typically involves a shorter time horizon compared to
long-term investing. Traders aim to capitalize on price changes over a
shorter time period, reacting to market trends.
Short-term trading refers to those trading strategies in stock market or
futures market in which the time duration between entry and exit is within
a range of few days to few weeks and months but not more than 12 months
or 365 days.
Long-term Trade :
Long-term trading in the stock market refers to an investment strategy
where investors buy and hold financial instruments, such as stocks or
securities, for an extended period of time. long-term trading is
characterized by a patient approach, with the intention of holding
investments for years,
aiming to hold their investments for an extended period, often with the
goal to take benefit from market volatility and exploiting price fluctuations
over longer time.Long-term timing for stock market is fixed for more than
12 month or 1 year.