• Investments in Stock Market are very risky. • You need to have very strong knowledge about Finance • Fixed Deposit(FD) earns you Interest • Interest is Fixed • Taxable • Obligated to give Interest • Dividend • Return on Investment in Shares • Tax free, to a limit. • Company’s decision whether to declare dividend or not • LTCG • Long Term Capital Gains • If a Person holds shares for more than an year and earns profit • Tax free, to a limit. • Face Value vs Market Value • Market Value is the market share rate as of today on the exchanges • Face Value is the original price at which Promoters of the company brought the stock • Promoter is a person or a group of persons who will start the company • Stock Split • Face value of the Share is Split • Number of Shares will increase proportionately • Share Price will decrease proportionately • Example Original FV – 2 Rs Revised FV = 1 Rs No. of Shares = 50,000 Revised Shares = 1,00,000 Value = 1,00,000 ( Intact : Face value X No. of Shares) Original Market Price = 5000 Revised Market Price = 2500 • Who decides Share Prices? • Market Forces • Bonus/ Split / Rights – Key Dates • Bonus Shares – Free Shares issued by the company to the Investors. • Face Value remains intact, no. of shares change and the total value remains intact. Market value changes, so more people can now buy shares. • cum ( cumulative) – dividend : before issue of dividend • ex( ) – dividend : after issue of dividend • Announcement Date : Date on which company announces bonus / split / rights • Record Date : Date on which you must have shares in your DeMat Account to enjoy bonus date • cum-basis : When a security is traded in cum price, it means that it incorporates the benefit of corporate action in its price • ex-basis : When the security is traded in ex price, it means that the buyer has no longer the benefit of corporate action • Ex-Bonus Date : Date on which Shares start trading at the revised price, and no shares purchased after this date will be eligible for upcoming bonus • Price Adjustment : Price adjustment done by stock market to traded price on the last day on which a security is traded on cum basis in the market, after the close of trading hours. • Key Terminology from moneycontrol.com website • LTP : Latest/ Last Traded Price • Demand and Supply for a stock will determine the stock price on BSE/ NSE. So, it may happen that the same stock is trading at different price on different exchange. • Stock Market Timings are 9:15 am to 3.30 pm. • 9:00 am to 9:15 am : Pre-Opening Market Session To absorb the volatility which arises, if markets open at 9:15 am directly 9:00 am to 9:07 am : Placing buy/ sell orders 9:08am to 9:11 am : Order Matching • 9:15 am to 3:30 pm : Market Session • 3:30 pm to 4:00 pm : Brokers Session • 4.00 pm to 9:00 am next day : After market hours session • Gap Up Opening : If the share price opens at a price higher than the closing price of previous day • Gap Down Opening : If the share price opens at a price lower than the closing price of previous day. • Unch : Unchanged, markets opening at the exact same price as closing price of the previous day. • The market value at which a stock opens, is dictated by the trading orders placed during After Market hours. • Corporate Actions • Bonus • Stock Split • Rights • AGM/ EGM • Board Meetings • How can a person start investing? You need – • DeMAT account : Account to store the dematerialized shares • Trading Account : Account to buy/ sell the dematerialized shares • Savings Account : Account that holds the money • 3 in 1 account is common, offered by Banks with Securities arm • PAN Card, Address Proof, Duly Signed and Cancelled Personalized Cheque & a Passport Size Photo • Types of Securities Market – • Primary Market : A Share getting listed on Share Market. A Private Limited Company can have maximum of 200 shareholders. Investors pa
