Improve your business trading concepts by Stock market institute
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Transcript of Improve your business trading concepts by Stock market institute
STOCK EXCHANGE
WHAT IS STOCK EXCHANGE?
Definition of Stock Exchange : The securities regulation act of 1956 defined stock exchange as “an association , organization , or a individual which is established for for the purpose of assisting , regulating , and controlling business in buying ,selling and dealing in securities.”
Meaning : 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 a ordinary share and these shareholders are the real owners of the company the Board Of Directors of the Company are elected out of these Equity Shareholders only.
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 is a voluntary association, its membership is not open to everybody
In a stock exchange, only the members can deal in i.e., buy & sell securities
The members of a stock exchange can buy and sell securities either as brokers for & on behalf of their clients
The dealings in a stock exchange are under certain accepted code of conduct i.e., rules and regulations
IMPORTANT FUNCTION OF STOCK EXCHANGE
Provide central and convenient meeting places for sellers and buyer of securities
Increase the marketability and liquidity of securities
Contribute to stability of prices of securities
Equalization of price of securities
Smoothen price movement
Help the investors to know the worth of their holdings
Promote the habit of saving and investment
Help capital formation
Help companies and government to raise funds from the investors
Provide forecasting service
HISTORY OF STOCK EXCHANGE
The stock exchange was established by “East India company” in 18th century . In India it was established in 1850 with 22 stock brokers opposite to town hall Bombay .This stock exchange is known as oldest stock exchange of Asia.
BROKER AND JOBBERBROKER: He is one acts as a intermidiary on behalf of others. A broker in a stock exchange ,is a commission agent who transacts business in securities on behalf of non members.
JOBBER: He is not allowed to deal with the public directly .He deals with brokers who are engaged with the investors . Thus, the securities is bought by the jobber from members and sells to members who are operating on the stock exchange as 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
DIFFERENCES BETWEEN A JOBBER AND A BROKER
JOBBER BROKER
SPECULATION AND SPECULATOR
SPECULATION : It is the transaction of members to buy or sell securities on stock exchange with a view to make profits to anticipated raise or fall in price of securities.
SPECULATOR : The dealer in stock exchange who indulge in speculation are called speculator . They do not take delivery of securities purchased or sold by them , but only pay or rescue the difference between the purchase price and sale price . The different types of speculators are
BULL BEAR STAG LAME DUCK
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.
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 altitude 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.
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 alloted 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.
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 fullfilling 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.
LONDON STOCK EXCHANGE
NEW YORK STOCK EXCHANGE
SHANHAI STOCK EXCHANGE
AUSTRALIA STOCK EXCHANGE
TOKYO STOCK EXCHANGE
HONG KONG STOCK EXCHANGE
TORONTO STOCK EXCHANGE
DEUTSCHE BORSE
BM&F BOVESPA
NASDAQ OMX STOCK EXCHANGE
NATIONAL STOCK EXCHANGE
BOMBAY STOCK EXCHANGE
CALCUTTA STOCK EXCHANGE
COCHIN STOCK EXCHANGE
MULTI COMMODITY EXCHANGE
DERIVATIVES EXCHANGE
OTC EXCHANGE
PUNE STOCK EXCHANGE
INTERCONNECTS EXCHANGE
LARGEST STOCK EXCHANGES
IN THE WORLD IN INDIA
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”.
BOMBAY STOCK EXCHANGE
It is oldest and first stock exchange of India established in the year 1875. First it was started under baniyan 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
N A T I O N A L S T O C K E X C H A N G E O F I N D I A ( N S E O R N S E I )
T H E N S E O F I N D I A I S T H E L E A D I N G S T O C K E X C H A N G E O F I N D I A , C O V E R I N G 3 7 0 C I T I E S
A N D T O W N S I N T H EC O U N T R Y . I T W A S E S T A B L I S H E D I N 1 9 9 4 A S A
T A X C O M P A N Y . I T W A S E S T A B L I S H E D B Y 2 1 L E A D I N G F I N A N C I A L I N S T I T U T I O N S A N D
B A N K S L I K E T H E I D B I , I C I C I , I F C I , L I C , S B I , E T C .
Features of NSEINation wide coverage i.e., investors from all over country
Ringless 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
OVER-THE-COUNTER EXCHANGE OF INDIA(OTCEI )
T H E O T C E I I S A N AT I O N A L , R I N G L E S S A N D C O M P U T E R I Z E D S T O C K E X C H A N G E .
I T WA S E S TA B L I S H E D I N O C T O B E R , 1 9 9 0 . I T S TA R T E D I T S
O P E R AT I O N I N S E P T E M B E R , 1 9 9 2 .
Features of OTCEI1. It is a nation-wide stock exchange. Its operational areas cover entire India.
2. It is a ringless 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
Advantages of OTCEI4. It helps the investors to have easy and direct access to the stock exchange
5. It helps investors to get fair prices for their securities
6. It provide safety to the investors
7. To provide computerized trading system
8. To provide investors a convenient,effcient and transparent mode of investment
S E C U R I T I E S A N D E X C H A N G E B O A R D O F I N D I A ( S E B I )T H E S E B I W A S C O N S T I T U T E D O N 1 2 T H A P R I L , 1 9 8 8 U N D E R A
R E S O L U T I O N O F T H E G O V E R N M E N T O F I N D I A . O N 3 1 S T J A N U A R Y , 1 9 9 2 , I T W A S M A D E A S T A T U T O R Y B O D Y B Y T H E S E C U R I T I E S A N D E X C H A N G E B O A R D O F I N D I A A C T , 1 9 9 2 .
T H E C O M P A N I E S ( A M E N D M E N T ) A C T , 2 0 0 0 H A S G I V E N C E R T A I N P O W E R S T O S E B I A S R E G A R D S T H E I S S U E S A N D T R A N S F E R O F
S E C U R I T I E S A N D N O N - P A Y M E N T O F D I V I D E N D
Function Of SEBIRegulating 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,incluing mutual funds.
Prohibiting fraudulent and unfair trade practices relating to securities market.
Promoting education, and training of intermediaries of securities market
Power of SEBIPower to approve the bye-laws of stock exchangePower 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.Power to try directly the foliation of certain provision of the company Act
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
LATEST NEWS OF BSE AND NSE
Most profitable company in BSE is GMR Infra
Most profitable company in NSE will be RELIANCE and ICICI
During last three months nearly only 26% of profit is earned by our stock exchanges the working hours will be
From 9:30 to 3:30 from Monday to Friday
T H E DA I LY G RA P H O F T H E C O M PA N I E S W I L L B E S H O W E D I N F O L LO W I N G M A N N E R
HOW STOCK EXCHANGES GET MONEY
They get their money by listing fees paid by the corporation to have their company traded
HO W TO DEA L AND I NVEST I N S TOCK EXCHA NGE
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 banks 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
HAPPY INVESTMENT WITH LOTS OF PROFITS
END
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