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Why Invest

"The more you sweat in peace time; the less you bleed in the war"

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Main reasons to invest.

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Financial Independence
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NABARD-issued BOND

Safety for our investment funds can be achieved through the purchase of government-issued securities in stable economic systems,

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DR. SUNANDA MITRA GHOSH

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Income
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Growth of Capital
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Capital gains are entirely different from yield in that they are only realized when the security is sold for a price that is higher than the price at which it was originally purchased..

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Selling at a lower price is referred to as a capital loss.

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 To beat inflation,

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 To Achieve financial goals like buying a car or paying for college, and retirement..
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 Increases Wealth

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STOCK EXCHANGE
DR. Sunanda Mitra Ghosh

 A stock exchange is a place which provides "trading" facilities for Stock brokers, traders, To trade stocks and other securities.

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 Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of dividends.

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India Stock markets It is convinced that the

economy is fundamentally strong Our country's financial markets are more mature than those of other emerging economies.

Indian stock exchange

The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia And largest number of listed companies in the world, With 4900 listed as of Feb 2010 It is located at Dalal Street, Mumbai, India. it the 4th largest stock exchange in Asia and the 11th largest in the world.
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STOCK EXCHANGES IN INDIA

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1.Bombay stock exchange 2.National stock exchange(Mumbai) 3.Banglore stock exchange 4.Utter Pradesh stock exchange(kanpur) 5.Magadh stock exchange(Patna) 6.Ahmedabad stock exchange 7.vadodara stock exchange(Baroda) 8.Bhubaneswar stock exchange 9.Calcutta stock exchange(kolkata) 10.Madras stock exchange

11.Cochin stock exchange 12.Coimbatore stock exchange 13.Gauhati stock exchange 14.Hydrabad stock exchange 15.Madhya Pradesh stock exchange(Indore) 16.Jaipur stock exchange 17.Ludhina stock exchange 18.Mangalore stock exchange 19.Pune stock exchange 20.saurashtrakutch stock exchange

 OTC Exchange of India MCX Stock Exchange Ltd Inter connected Stock Exchange of India Ltd.

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WHAT IS STOCK EXCHANGE

Stock exchange is that place where trading of shares is done in terms of sale and purchase. A person want to buy/sell stocks in the stock market has to first place his/her order with a broker or can do themselves using online trading systems When the buy order of the stocks is communicated to the exchange [either NSE {National Stock Exchange} or BSE {Bombay Stock Exchange}]. The order stays in the queue of exchange's other orders and gets executed if the price of that stock comes to that value. The stocks purchased will be sent to the person either in physical or demat format

BOMBAY STOCK EXCHANGE

There are 23 stock exchanges in the India. Mumbai's, Bombay Stock Exchange is the largest, with over 6,000 stocks listed. The BSE accounts for over two thirds of the total trading volume in the country. Established in 1875, the exchange is also the oldest in Asia.

BSE SENSEX
The Bombay Stock Exchange SENSEX (acronym of Sensitive Index) more commonly referred to as SENSEX or BSE 30 is a free-float market capitalization-weighted index of 30 well-established and financially sound companies listed on Bombay Stock Exchange. The 30 component companies which are some of the largest and most actively traded stocks, are representative of various industrial sectors of the Indian economy. Published since January 1, 1986, the SENSEX is regarded as the pulse of the domestic stock markets in India.

National Stock Exchange

The National Stock Exchange (NSE) is a stock exchange located at Bombay, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India,

MAJOR STOCK EXCHANGES

Economy Stock Exchange

United States

New York Stock Exchange (NYSE)

Japan

Tokyo Stock Exchange

United States

NASDAQ

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 The initial offering of stocks and bonds to investors is done in the primary market And subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market.

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 In financial markets, a share is a unit of account for various financial instruments Including stocks 1-ordinary{equity} 2- preferential The term stocks in the plural is often used as a synonym for shares.
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3-Unit trusts,

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TRENDS IN MARKET

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STOCK PRICE MOVEMENT

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a) b) c) d)

The securities traded on a stock exchange include 1-Shares issued by companies, 2-Bonds

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 To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, But trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of increased speed and reduced cost of transactions.
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Common stock

Equity security

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Type of Markets
Exchanges OTC trading of unlisted stocks & listed direct trading

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Exchanges
Physical location for trading trading by members
Own a seat on the exchange stock traded on exchange are listed stocks

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Trading Mechanics
1) 2) 3) 4) Types of orders Short selling Buying on the margin Institutional trading

Types of orders
Instructions from investors to brokers market order
buy/sell order to be executed at best price -- get lowest price for buy order

-- get highest price for sell order

 market order
market orders given priority in trading no guarantee of execution price -- price could rise/fall from time order is placed to time it is executed

 Limit order
buy/sell order where investor specifies price range buy at Rs. 50 or less sell at Rs. 52 or more Specialist records orders in limit order book

 stop order
order lies dormant turns into market order when certain price (the stop) is reached buy if price rises to Rs. 60 sell if price falls to Rs. 58 -- stop loss order

 An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor's loss on a security position. Also known as a "stop order" or "stop-market order"

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Setting a stop-loss order for 10% below the price you paid for the stock will limit your loss to 10%. This strategy allows investors to determine their loss limit in advance, preventing emotional decision-making. .

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Derivatives
Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified price. A primary motivation for pre-arranging a buyer or seller for a stock of commodities in early forward contracts was to lessen the possibility that large swings would inhibit marketing the commodity after a harvest.

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 The need for a derivatives market The derivatives market performs a number of economic functions: 1. They help in transferring risks from risk averse people to risk oriented people 2. They help in the discovery of future as well as current prices 3. They catalyzed entrepreneurial activity 4. They increase the volume traded in markets because of participation of risk averse people in greater numbers 5. They increase savings and investment in the long run

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Hedgers
Hedgers use futures or options markets to reduce or eliminate the risk associated with price of an asset.

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Speculators
Speculators use futures and options contracts to get extra leverage in betting on future movements in the price of an asset. They can increase both the potential gains and potential losses by usage of derivatives in a speculative venture.

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Arbitrage
Arbitrageurs are in business to take advantage of a discrepancy between prices in Two different markets. If, for example, they see the futures price of an asset getting out of line with the cash price, they will take offsetting positions in the two markets to lock in a profit

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Types of Derivatives
Forwards: A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at todays pre-agreed price. Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange-traded contracts

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Options: Options are of two types calls and puts. Calls give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date.

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 Warrants: Options generally have lives of upto one year, the majority of options traded on options exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded overthe-counter.

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Thank you!