Only two things feature in all the newspapers everyday: weather forecast and SENSEX and NIFTY value. The latter ratings might mean nothing for an outsider but for finance executives, it is their daily bread. A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. They also provide facilities for capital events such as payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. The National Stock Exchange is a stock exchange located at Maharashtra, India. It is the 9th largest in the world by market capitalization and the largest in India by daily turnover. For a company’s shares to be traded over a stock exchange, it has to be listed there. There are over 1552 listings in NSE. However the top 50 most traded companies’(by means of market capitalization) shares are kept track of using NSE’s key index called NIFTY (National Stock Exchange Fifty).
The major many segments of the capital market traded over NSE are equities, futures and options, retail debt market, wholesale debt market, currency derivatives, mutual funds and stock lending and borrowing. Among these, currency derivatives is the latest addition with the launch of Currency Futures in USD INR by NSE in 2008. Currently NSE also has currency futures in Euros, pounds and yen. At the end of the trade season not everyone can make a profit. The factual figures can be quite alarming to an amateur trader; 95% of the traders end up losing money while only 5% manage to make a profit. To end up on the windward side of the mountain separating winners and losers certain tips and strategies can help. Another reason why one should look up the tips before trading in NSE is the increasing competition. Because of the internet boom and advent of online trading, several people who intend to make money via internet have turned towards stock trading for nothing else provides possibilities of such significant income as stock trading does. The maximum share of trade over NSE is over equities and equity derivatives (95%). Owing to this, almost everyone who is trading in Indian equity markets is trading on the NSE.
In finance, equity trading is the buying and selling of company stock shares. Shares in large publicly-traded companies are bought and sold mostly through NSE and BSE in India. However, stock shares in smaller public companies are bought and sold in over-the-counter (OTC) markets. For trading in stocks, i.e. buying or selling stocks, one needs to open a demat account; something similar to a bank account needed for deposit and withdrawal from banks. In addition, the great majority of equity investors do not actually hold the securities, or certificates. Instead they have an account with a bank or a fund manager who has physical access to these stock certificates.
Equity is more of a generic term which encompasses all the government and private companies’ stocks. Moreover the period of holding position (securities) further ramifies it into long term, short term and day trading(though long term investment is not generally associated with stock trading). The main reason why investors prefer equities over other means is because of its stable growth, even being immune to inflation. This said, the level of returns also depends greatly on the investor’s brilliance. If one does not have enough insight into the available stocks and experience in equity investment, one can safely go for mutual funds. A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.
Mutual fund provides many advantages such as daily liquidity (most important), government oversight, greater returns than individual investment because of mutually bulkier sum advantage and ease of comparison. Though it is a widely prevalent means of equity investment, it certainly has its own share of cons: fees for the professional fund manager, less predictable income and no opportunity to customize (trade as per one’s wish).
Individuals can also seek the help of various paid service providers whose sole job is to analyze the market and judge the market sentiment. They can provide valuable tips and strategies for choosing the right stock, investing appropriate amounts in different stocks and finally can suggest the optimum stop-loss.