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7/19/2020 Basics of Stock Market For Beginners Lectures By CA Rachana Phadke Ranade ( Notes) – Awesome saraswathi

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Basics of Stock Market For Beginners Lectures By


CA Rachana Phadke Ranade ( Notes)

Myths about Stock Market –


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 pro t
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.

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7/19/2020 Basics of Stock Market For Beginners Lectures By CA Rachana Phadke Ranade ( Notes) – Awesome saraswathi

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 bene t 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 bene t 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 di erent price on di erent 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, o ered 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.

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7/19/2020 Basics of Stock Market For Beginners Lectures By CA Rachana Phadke Ranade ( Notes) – Awesome saraswathi

Investors pay allotment money and Issuer Company issues the shares.  The company lists on stock market
3 days after the shares issue.
Transaction is directly between Issuer Company and the Investor.
Also known as Issue Market
Secondary Market
Also known as Securities or Stock Market
Transaction is between two Investors
BSE –  Bombay Stock Exchange
NSE  – National Stock Exchange
Both are  located  in Mumbai,  Maharashtra
Secondary Market –  Participants and Terminology
Stock Exchange – Provide a platform for investors to buy and sell securities from each other
Three National level Stock Exchanges in India –
BSE ( Bombay Stock Exchange )
NSE ( National Stock Exchange)
MSEI (MCX-SX) Multi Commodity Exchange
 Members
Stock Brokers :  Investors can trade in the Secondary Market only through the Members of the
Stock market
Investors
RII : Retail Individual Investors ( ppl like you and me ). Investor applying for <= 2 Lakh rupees
in IPO,  you come in RII Category.
HNI : High Networth Individual.  Investor applying in IPO for >2 lakh rupees, you come in HNI
Category.
DII :  Domestic  Institutional Investor.  Indian companies. e.g. Banks, Insurance Companies,
Mutual Fund Companies
FII / FPI : Foreign Institutional Investor / Foreign Portfolio Investor
Issuers : Company that issues shares, for a pre-determined  amount
Secondary Markets have three distinct phases : Trading, Clearing and Settlement.
Stock exchanges  in India feature an electronic-order matching system that facilitates e cient
and speedy execution of shares
All stock exchanges in India follow a common settlement system. If Trading takes place on day
T, Settlement happens on two business days after the trading day
All the trading done by the investors with the Stock brokers happens via the clearing house
owned by that particular stock exchange.
NSCCL –  National Securities Clearing Corporation Limited. clearing house for NSE
ICCL –  Indian Clearing Corporation Limited – Clearing house for BSE
Metropolitan Clear –  Clearing house of  MSE
Depository and Depository Participant( DP)
For Securities to be traded in Secondary market, it is mandatory for the securities to be
available in electronic or dematerialized form
NSDL ( National Security Depository Limited)  and CDSL( Central Depository Service Limited)
are the two key depositories in India
Main Function is to convert Physical Shares to Dematerialized shares
Physical Shares -> Stock broker -> Company -> Depository -> Convert to e-format- >
Return to company -> Return to stock broker -> Return to individual investor
Depository Participant is nothing but a Stock broker.

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7/19/2020 Basics of Stock Market For Beginners Lectures By CA Rachana Phadke Ranade ( Notes) – Awesome saraswathi

Depository maintains the  e-register of the entire register of members and provides to
company as and when requested.
Volume – Number of shares which are traded on a speci c day

Contract  Note
Within 24 hours,  Broker has  to dispatch a note stating the buy/sell activity to the Investor
Settlement date =   Trade Date (T) + 2 working days
Buyer gets shares and Seller gets  money only on Settlement date.
Trading Systems
Open Outcry – Traders gathering physically and shout/ bid and o er  prices
Online Trading – Traders will use electronic systems for trading. Done at BSE, NSE and MSEI
Order Types
Buy –  Buy shares
Limit Order :  Limit the order at a given price. eg. 2040  for a price with last traded price of 2053.  Investor
bargains and does not o er to buy / sell at current market price
Market Price Order :  Order  where buyer/seller is ready to execute their trade at the current market price(
without bargaining)
Stop Loss Order : Order placed by a buyer/seller at a price lower than his buying price / higher than his
current selling price. The biggest advantage is that, losses will be limited.
After Market Order :  This is an order that is placed after 4 pm and before 9 am the next day.
IOC :  This is an order where the trader wants to immediately execute his buy/sell order. If it is not
executed immediately, it gets  cancelled.
GTD : Good Till Day.  The order gets auto cancelled if it is not executed by the end of the business day.
GTC :  Good Till Cancelled.  These type of orders arent preferred by Brokers, it works exactly in reverse to
GTD
An order can be edited or modi ed until order matching is done by the stock exchange.
Books Maintained by Broker
Order Book
Trade Book
Market Phrases
Bull Phase :  Upward Trends in the market.  Indicated in GREEN.
Bear Phase :  Downward Trends in the market. Indicated in RED.
Long on the market :  Bullish about the market
Short on the market :  Bearish about the market
Short-Sell :  Sell rst, and buy later.
Intra-day Trading : Buy and Sell on the same day.
IEPF :  Investor Education Protection Fund
Short Sell Concept
Trade where Trader sells rst and buys later
Preferred by Traders if they are bearish about the market
Share Auction : If a person does a short sell and does not square o his position by end of the day,  then his
shares are auctioned.  Brokers participate in the Auction market on behalf of their client, in post market
hours.  Any loss will borne by the Investor, but any pro t will be transferred to IEPF.

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7/19/2020 Basics of Stock Market For Beginners Lectures By CA Rachana Phadke Ranade ( Notes) – Awesome saraswathi

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Author: Saraswathi Pulluru


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Saraswathi Pulluru / December 23, 2019 / Uncategorized

8 thoughts on “Basics of Stock Market For Beginners Lectures By CA


Rachana Phadke Ranade ( Notes)”

jagdishwar j
March 25, 2020 at 8:43 pm

This is great..Thank you for capturing the highlights of the course.

nakadesaurabh23
April 2, 2020 at 10:09 pm

Can you pls pls pls share the videos also

Saraswathi Pulluru 
April 3, 2020 at 12:06 pm

Hi, This is a paid course. Sorry that I will not be able to share the videos.

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7/19/2020 Basics of Stock Market For Beginners Lectures By CA Rachana Phadke Ranade ( Notes) – Awesome saraswathi

rohit
April 11, 2020 at 12:27 am

Hi, Mam can you share the full note of basic of stock market upto 11th lecture

Avi Gogoi
April 13, 2020 at 5:05 am

sir plz can i have the fundamental analysis Lectures By CA Rachana Phadke Ranade ( Notes)

Saraswathi Pulluru 
April 14, 2020 at 1:06 pm

Hi, its a paid course. I was just sharing my notes here.

Gopal Bhavsar
July 6, 2020 at 5:33 pm

but its just a note of 2 free lectures pls post the other lectures note….

Mehra
May 4, 2020 at 7:28 pm

Hi saraswathi. Please share some more content of Rachana phadke stocks sessions.
Thanks

Awesome saraswathi / Blog at WordPress.com.

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