Online Trading in NSE and BSE, Buying/Selling Shares and Brokers.
Investing in share market can bring very good returns compared to other kind of investments like bank fixed deposits, bonds, PPF, NSC etc. Selecting the right stock in the right sector at the right time is important for success in equities. Price of the stocks increases according to the growth of the company plus companies will give bonus and dividend at periodic intervals.
Indian Stock Markets – NSE and BSE .
The Bombay Stock Exchange(BSE) and National Stock Exchange (NSE) are the main stock exchanges in India. Apart from these two there are many regional stock exchanges. Both NSE and BSE are almost equal in daily traded volume. The primary index of BSE called BSE SENSEX comprising 30 stocks. This includes big Indian companies like Reliance Industries, Tata Motors, ONGC, NTPC, TCS, Infosys, Bajaj Auto, Bharti Airtel, ACC, SBI, Wipro, BHEL, ICICI, HDFC etc as per Apr 2007. Similarly NSE has S&P NSE 50 Index (Nifty) comprising major 50 stocks.
Online Trading
Both NSE and BSE have switched over to computerized Online Trading system from open outcry trading system. BSE has BOLT (BSE Online Trading) and NSE has NEAT (National Exchange Automated Trading). With these highly efficient online trading systems efficiency and transparency of BSE and NSE are increased dramatically.
Online Trading Account and Demat Account
After the introduction of the online trading systems it is very easy to do online trading with just a PC and an internet connection. All you need to do is just open a Demat account and a trading account with a depository participant or DP. DP is connecting Depository to investors. Depository is the people who stores shares in electronics form. In India there are two depositories, NSDL and CDSL.
Buying/Selling a Share
Once the account is active you can buy shares from BSE or NSE. For every buy or sell transaction you will have to pay a brokerage to the broker normally ranges between 0.4% to 0.8%. Suppose you buy 100 shares with price 100. So total amount is Rs 10000. For a .5% brokerage firm you will have to pay 0.5% of 10,000 ie Rs50. Same amount you have to pay when you sell it. So totally Rs 100 will be reduced from your total profit.
Apart from this brokerage you will have to pay many other charges like Service tax on the brokerage ie 12.25% for about transaction it is 12.25% of Rs 50 ie 6.125 for buy and another 6.125 for sell. Then there are other charges like Securities Turnover Tax (.125%), Stamp duty, Education cess, minimum buy/sell commission etc. These amount varies from broker to broker.
Online BrokersThere are many online brokerage firms in India like Sharekhan, Geojith Securities, ICICI Direct, HDFC Securities, India Bulls, Investsmart Online, Kotak Street, Motilal Oswal, 5 Paisa etc.
Investing in share market can bring very good returns compared to other kind of investments like bank fixed deposits, bonds, PPF, NSC etc. Selecting the right stock in the right sector at the right time is important for success in equities. Price of the stocks increases according to the growth of the company plus companies will give bonus and dividend at periodic intervals.
Indian Stock Markets – NSE and BSE .
The Bombay Stock Exchange(BSE) and National Stock Exchange (NSE) are the main stock exchanges in India. Apart from these two there are many regional stock exchanges. Both NSE and BSE are almost equal in daily traded volume. The primary index of BSE called BSE SENSEX comprising 30 stocks. This includes big Indian companies like Reliance Industries, Tata Motors, ONGC, NTPC, TCS, Infosys, Bajaj Auto, Bharti Airtel, ACC, SBI, Wipro, BHEL, ICICI, HDFC etc as per Apr 2007. Similarly NSE has S&P NSE 50 Index (Nifty) comprising major 50 stocks.
Online Trading
Both NSE and BSE have switched over to computerized Online Trading system from open outcry trading system. BSE has BOLT (BSE Online Trading) and NSE has NEAT (National Exchange Automated Trading). With these highly efficient online trading systems efficiency and transparency of BSE and NSE are increased dramatically.
Online Trading Account and Demat Account
After the introduction of the online trading systems it is very easy to do online trading with just a PC and an internet connection. All you need to do is just open a Demat account and a trading account with a depository participant or DP. DP is connecting Depository to investors. Depository is the people who stores shares in electronics form. In India there are two depositories, NSDL and CDSL.
Buying/Selling a Share
Once the account is active you can buy shares from BSE or NSE. For every buy or sell transaction you will have to pay a brokerage to the broker normally ranges between 0.4% to 0.8%. Suppose you buy 100 shares with price 100. So total amount is Rs 10000. For a .5% brokerage firm you will have to pay 0.5% of 10,000 ie Rs50. Same amount you have to pay when you sell it. So totally Rs 100 will be reduced from your total profit.
Apart from this brokerage you will have to pay many other charges like Service tax on the brokerage ie 12.25% for about transaction it is 12.25% of Rs 50 ie 6.125 for buy and another 6.125 for sell. Then there are other charges like Securities Turnover Tax (.125%), Stamp duty, Education cess, minimum buy/sell commission etc. These amount varies from broker to broker.
Online BrokersThere are many online brokerage firms in India like Sharekhan, Geojith Securities, ICICI Direct, HDFC Securities, India Bulls, Investsmart Online, Kotak Street, Motilal Oswal, 5 Paisa etc.
