How to trade in Stock Market
Usually buying and selling of stocks are placed via stockbrokers. The stock broker is an individual who associated with a brokerage firm. Stockbroker buys and sells stocks for both retail and individual clients through stock exchanges. The broker usually offers market research, analysis of a stock market, opinions, and expert advice to the client. Stockbroker holds the degree in finance or degree in business administration.
To trade in share market, the trader should be aware of the live price of the stock. Initially, this price was obtained via ticker tape. Ticker tape was a large ribbon of a paper on which stock prices were printed. This is the reason we refer stock prices as a stock ticker.
A stock quote contains the essential information required to place an order in a live market. This quote contains the live price of a price at which transactions are going on. The stock quote gives information about the current bid price. The current bid price is the highest price at which someone is ready to buy the stock. Whereas offer price is the lowest price at which someone in the market wishes to sell Stock.
Stock quote contains stock information by their symbol. This symbol usually contains three to four capital words. Example, Hero Motocorp Ltd is referred by HEROMOTOCO. The stock quote usually contains chart which represents s stock historical stock price. The stock quote also gives last traded value of a stock including fifty-two weeks high value and fifty-two weeks the low value of a stock.
Traders place their orders in share market by filling market orders. The market order is a simple order which instructs the broker to place trader orders i.e. buying and selling the share at the available price for particular equity. A market order does not give a guarantee to the fulfillment of an order placed by trader until and unless it matches the market trend.
Traders can place a limit order via order book. Let’s take an example, trader wishes to buy 200 quantity of a heromoto corp share at 3,729 whose market value is 3,729.50 then the trader can buy only 100 quantity of a share offered at 3,729 prices. For remaining quantity, traders need to wait until unless some other sellers come to market at expected down price.
Stop Order is another form of order in the stock market. Stop order is also named as the stop-loss order which will cover losses of a trader. Stop order will be triggered only when the stock reaches given price. Once the stock reaches to given price then order becomes a market order to execute. Let’s take an example of a stop order, if the trader is buying hero motocorp share at 3,729 and he placed sell order with price 3850 then in this scenario his order will get executed only when the stock reaches to the given price.
Margin trading is another form of trading which is present in the stock market. Usually in Margin trading stock broker facilitates its client to borrow money to buy shares in the excess amount of cash. Margin trading is facilitated by multiple brokers. Brokers attract new customer and their existing clients by offering margin trading.
Short selling is a type of order usually trader execute in the live market hoping stock price will drastically go down. Let’s take an example Current stock price of hero motocorp share is 3,729 rs/- and Shyamlala expecting to see the price at 3650. In this situation, shyamlala will place an order to sell hero motocorp shares at the current market price. Later on, when hero motocorp share price goes down Shyamlala will purchase share again to complete short selling order.