Online Trading

Online Trading

There are many major benefits to online trading. You have the ability to expand your business for a relatively low cost. Online trading has become big business, and the Internet has helped many businesses achieve a great deal of success. Internet companies such as Amazon.com and Ebay use online trading as a primary means of business and have had great success in doing so, but there have also been many businesses that have tried and failed with online trading. The stock market is a market where people buy and sell parts of companies. The parts being bought and sold are a financial interest in the company called stocks.buying shares,investing in shares,online share trading,share trading The companies involved must be publicly held companies, which means that they have to be companies that sell stocks to public investors on an open market.Companies that sell stocks to investors usually do so in order to raise capital. The capital is then used for things such as financing current operations and paying for expansion plans. If the company is able to turn the capital into profits, a share of the profits is passed on to investors. Similarly, if the company loses money, investors share the loss.
The stock market is simply a central place where people come together to buy and sell stocks. However, the stock market is not a store or a single building. It doesn't really have a physical location. However, when people think of the stock market they typically think of Wall Street or the New York Stock Exchange, also known as the NYSE. These places do not encompass the entire stock market, but they are locations where much of the activity in the stock market occurs.The NYSE is perhaps the principal stock exchange in the world. Not all companies’ stocks are traded in the NYSE, but it is the trading home of some of the most impressive and well-respected companies in the world. To purchase stocks of these companies on the floor of the NYSE, investors need a substantial amount of assets to invest. Nevertheless, the small investor can obtain less expensive investing through brokers, including online companies. With a small balance, online brokers allow investors to bypass the trader on the NYSE floor, and make electronic purchases and sales on their own.The first thing to consider is whether or not your business will benefit from online trading. In recent years, there has been a tremendous amount of hype surrounding ecommerce. The hype seems to have finally calmed down, and the speculation over whether the Internet is a viable way to do business finally seems to have been established. If your business takes orders over the phone, by email or by fax, then online trading may certainly be a viable option for you.
If you have competitors who are trading online while you are still using more traditional methods, then you may certainly be losing business. Before you invest any money on online trading, ask yourself a few questions. Is the product you sell priced in a consistent manner? Do your products normally have a quick turnover, and do you already have a list of products in a sales list? If you can answer positively to these questions, then you may benefit from online trading.Another aspect to consider is the volume of your business. You will need to consider whether your current sales will be enhanced by online trading. Look at competitors who currently trade online and see if there is scope to undercut them on products. If you intend to have larger volumes of sales, they will need to be offset against end solutions such as delivery costs.One aspect of online trading that needs to be put into place at the beginning is an online credit payment facility. Orders can be taken via the Internet and then processed offline, but it will speed up the process to have an automatic checking and clearing facility in place. This system will tell you immediately whether credit cards are valid and funds are available to pay for your product.
Another system to consider is online stock management. This will tell you if you have enough stock in place to complete orders, or if more stock needs to be ordered. Both these systems incur costs, and they may not be viable if your margins are tight. Credit card orders also require security such as encryption. There are fairly cheap, reliable software packages that include all of these features on implementation.Online trading is not something you should enter into lightly. You should weigh whether it is a viable option and look at the long-term prospects. The initial costs of implementing an Internet shop may be offset by the fact that you may now have customers from all over the world who are able to trade with you.

STOCK MARKETS

A stock exchange share market or bourse is a corporation or mutual organization which provides facilities for stock brokers and traders to trade company stocks and other securities 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 income and dividends
The securities traded on a stock exchange include shares issued by companies unit trusts and other pooled investment products and bonds 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 speed and cost of transactions Trade on an exchange is by members only
The initial offering of stocks and bonds to investors is by definition 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 Supply and demand in stock market is driven by various factors which as in all free markets affect the price of stocks
The Bombay Stock Exchange Limited formerly The Stock Exchange Mumbai popularly called The Bombay Stock Exchange or BSE is the oldest stock exchange in Asia It is located at Dalal Street Mumbai India
Bombay Stock Exchange was established in 1875 There are around 3 500 Indian companies listed with the stock exchange and has a significant trading volume As of July 2005 the market capitalization of the BSE was about Rs 20 trillion The BSE SENSEX SENSitive indEX also called the BSE 30 is a widely used market index in India and Asia As of 2005 it is among the 5 biggest stock exchanges in the world in terms of transactions volume Along with the NSE the companies listed on the BSE have a combined market capitalization
The National Stock Exchange of India NSE is one of the largest and most advanced stock markets in India The NSE is the worlds third largest stock exchange in terms of transactions It is located in Mumbai the financial capital of India The NSE VSAT terminals 2799 in total cover 320 cities in India
The Role of the Stock Exchange
Raising capital for businesses The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public
Mobilizing savings for investment When people draw their savings and invest in shares it leads to a more rational allocation of resources because funds which could have been consumed or kept in idle deposits with banks are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture commerce and industry resulting in a stronger economic growth and higher productivity levels
Facilitate company growth Companies view acquisitions as an opportunity to expand product lines increase distribution channels hedge against volatility increase its market share or acquire other necessary business assets A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways to company growing by acquisition or fusion
Corporate governance By having a wide and varied scope of owners companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations by public stock exchanges and the government
Barometer of the economy At the stock exchange share prices rise and fall depending largely on market forces Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth An economic recession depression or financial crisis could eventually lead to a stock market crash Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy

Generally speaking the Stock Market refers to equities where actually stocks and derivatives are traded In the U S A we think the Stock Market is New York City In fact there are major Stock Markets in Hong Kong Hamburg London Paris Canada Japan and others that influence one another and impact the world Stock Market
The New York Stock Exchange may have stocks listed that are listed on other major Stock Markets A company headquartered in Amsterdam may be listed on multiple stock exchanges Many foreign organized companies are listed on the New York Stock Exchange There is a tremendous value for foreign companies to be listed on an exchange in the U S The exposure and knowledge of a foreign company has a face on the New York Stock Market
An example would be a China stock Baidu These information and search technology company has grown in leaps and bounds since it was introduced on the New York Market Sometimes all it takes is making a good impression to stock analysts and a good review by key people to give the foreign company a boost
The reality of the Stock Market today is its world wide integration of investors companies and alliances that create an unprecedented dynamic Thus far this United Nations of the financial markets has produced an unspoken treaty of like minds The main objective is to create a winwin scenario for all of the world players in the Stock Market
Any investor wherever located may hold a substantial stake in any given equity no matter where the equity is traded The Stock Market is a very large private club that anyone can join with the only admission ticket is the price of a single share of stock
Most people are aware of American companies utilizing off shore manufacturing of their products It may be not as well known that some traditional American brand companies are owned by foreign companies Other American brand companies have a significant multinational presence with significant stock ownership by foreign banks and investors
The term equity should be broadly interpreted There are equities that involve the manufacturing of products and goods but a product can be intellectual or an entity like insurance Banks are equities and financial brokers are all traded on the various exchanges An investor may own gold stocks mining companies and equities that package these equities into a corporate entity The only limitation is that if the investor is interested in owning the commodity or trading in the futures market the Chicago Mercantile or other commodities exchanges is the investing tool
In other words you may own a bank as an equity who may have bonds and other commercial paper that may trade on the commodities exchanges but you can t buy a commodity as a stock If you want a commodity like wheat currency corn gold silver or the like you need to look to the commodities exchange
In the United States the New York Stock Market is comprised of the NASDAQ NYSE and the newly created combination of the NYSE Group with Euronext in April 2007 The Euronext holding company is a phenomenal synergy between Paris and the NYSE whose history goes back to 1792
The Euronext is a combination of derivatives currency and equities to name a sample of products There are other exchanges that include the AMEX There are listing requirements for each of the exchanges The Stock Market is basically a place where buyers and seller of a piece of a company come together and in the process the company hopefully raises some cash or other value
A stock market is a market for the trading of company stock and derivates of same both of these are securities listed on a stock exchange as well as those only traded privately
The term the stock market is a concept for the mechanism that enables the trading of company stocks collective shares other securities and derivatives Bonds are still traditionally traded in an informal overthecounter market known as the bond market Commodities are traded in commodities markets and derivatives are traded in a variety of markets but like bonds mostly overthecounter
The size of the worldwide bond market is estimated at $45 trillion The size of the stock market is estimated at about $51 trillion The world derivatives market has been estimated at about $300 trillion 1 The major U S Banks alone are said to account for about $100 trillion It must be noted though that the derivatives market because it is stated in terms of notional outstanding amounts cannot be directly compared to a stock or fixed income market which refers to actual value
The stocks are listed and traded on stock exchanges which are entities a corporation or mutual organization specialized in the business of bringing buyers and sellers of stocks and securities together The stock market in the United States includes the trading of all securities listed on the NYSE the NASDAQ the Amex as well as on the many regional exchanges the OTCBB and Pink Sheets European examples of stock exchanges include the Paris Bourse now part of Euronext the London Stock Exchange and the Deutsche Börse
How To Invest In The Stock Market
The stock market works like an auction There are buyers and sellers and no fixed price for any item
The main difference is that between the buyer and the seller there are middle men specialists called stock brokers and floor brokers who do the buying for you or the selling for a company
If you decide to enter the stock market what you are essentially doing is buying a stock in a company
The idea of the stock market originated some 200 hundred years ago in East Manhattan where people traded silver for papers that indicated they had bought shares in the cargo that was arriving on ships to the USA
This practice grew and during the American Revolution the government sold bonds to fund its war campaign
After a time people who had bought these bonds could trade them in for a profit Banks then began to sell shares in their companies in order to get extra capital This was the beginning of the stock market
The biggest stock market is the New York Stock Exchange NYSE on Wall Street Billions of dollars change hands every day in this market Every day companies sell part or all of their stock to the public
These shares in the company are bought and sold through controlled stock markets such as the NYSE
Other stock markets you might hear of are the American Stock Exchange AMEX and the NASDAQ which is a completely electronic system
There are many smaller markets all over America Internationally there are many others
You may watch the action of the stock market on TV it looks like chaos
But it is organized chaos
What is happening is frenzied trading as the specialists on the stock exchange floor are trying to match buyers with sellers getting the best price for everyone concerned
This type of activity is being bypassed by systems such as the NASDAQ and AMEX as technology excludes the use of the specialists
Investors thats you trying to get into the stock market can buy and sell stock over the internet
However if you want get into the stock market and would prefer to do it through a specialist you will need to get in touch with a stock broker
If you have some money you want to invest in the market but you dont know how the first thing would be to contact a stock broker and tell him how much money you have and the type of company you would like to invest in
Your broker will then contact one of his employees on the stock exchange floor a floor broker and tell him that he has a customer who wants to buy some stock
The floor broker will then go to the part of the stock exchange that sells the type of stock you the buyer wants to purchase and gets it for you
Your trade is reported electronically and then the floor broker contacts your broker who makes a record of the stock you have now bought and informs you of the success of your purchase
Your broker will be able to sell these shares for you at a later time it could be that same day or years later and hopefully you will be selling them at a profit The broker charges a fee for doing this for you
Learn Online Stock Market Trading
Trading stocks online can be very stimulating It is both either a great hobby or a full time job In both cases you can earn much money The stock market has made millionaires since the very beginnings of share trading In the past you could trade stocks only for long term profits today you can make profits within minutes
The Internet and the computer revolution made it possible that even your grandmother can place an order to buy stocks online today Online stock trading has become very easy Everybody with an Internet connection and a less Costly PC can go online today and order shares Not only in the US market but globally at almost any stock market in the world
Everything is at your fingertips the latest stock quotes financial news real time charts with indicators market commentary and analysis Whatever you need is right on you desktop You only need to make a decision what to buy and press a button Within seconds you are the owner of the stocks you wanted
Today there is almost no difference between a trader behind a trading desk at the bank and a private investor sitting behind his home computer Both have less Costly access to real time data of all the stocks they like to follow The only difference might be the money an institutional investor has compared to a private trader
There are many online stock broker nowadays Every broker is different The main decision you must make is whether you want to trade yourself or if you need advice from the broker The last one is called full service broker and helps you to find the best stocks and also executes the trades for you The other ones are discount brokers and they only execute the trade for you but dont tell you which stock to buy or when to sell
Many are attracted by the fast profits you can make in the stock market In fat it is possible to buy and sell stocks with a profit within seconds today But be aware of the trading costs A trade can easily cost you $5 or more and if you trade frequently this adds up to a big sum There are many discount brokers today but when the trade execution takes more than a minute then you probably should try another one
There are different types of trading platforms The easy ones just offer basic order entry methods which are sufficient for the average trader and investor who places less than one trade a day The more advanced ones offering highly sophisticated ways of routing your order to different market places The advantage of these trading platforms lies in their execution speed but the handling requires some experience Day traders who execute up to hundreds of trades per day are using such direct access trading platforms
No matter if you are an investor or daytrader the stock markets offer thousands of possibilities every day to make money The US stock market alone is the home of thousands of different companies which have their shares listed with various stock exchanges The shares are traded in real time every day for more than 6 hours pre and post market trading not included It all starts with understanding the stock market

Stock broking is one of the first industries in India where Internet has shown its vast potential Online trading has helped to cut through sub broking intermediaries push down transaction costs bringing in transparency and thus has empowered the investor as a whole
Erstwhile era of trading involved cries across the floor of the stock exchange to trade in paper shares which later on replaced with Demat trading Demat Trading
Demat trading means that shares are held in electronic form with depositories which are namely NSDL and CSDL Demat trading was introduced in phased manner from 1999 Demat trading is a prelude to online trading Dematerialization of all shares has provided a platform for online trading and today online trading has spread its wings to futures derivatives trading in stock markets investment in mutual funds post office schemes insurance applying for initial public offer and commodity trading One is able to strike the price at ones will as per individual convenience for place and time
Intermediaries are removed,Competitive brokerage,Entry of female in male dominated area,
One can trade live on stock exchange irrespective of location,Requirement Online Trading areInternet,Online trading account,Knowledge of trading in stock market Following platforms exist where online trading account can be opened and prominent among these platform accounting for 7080% of business are listed below
· ICICI Direct com Owned by ICICI Group
· Indiabulls com
· Sharekhan com Owned by SSKI
· Kotak Securities Owned by Kotak Mahindra Group
· HDFC Securities Owned by HDFC Bank
· 5 Paisa com Owned by India Infoline com

Opening an Online Trading Account

Choosing an online trading account
Submission of requisite document which requires residence proof bank details and PAN Card
Receipt of user ID and password
Methods of transaction of funds

fter the account has been opened user is all set to trade on internet The data in form of password and transaction password travels in 128 bit encryption mode and is safe to operate in internet It has three parameters trading account bank account and demat account. ICICI Direct com and HDFCSEC com has an inherent advantage where all the above are integrated and thus drawl of funds and credit of funds post purchase sales of shares other instruments occurs on its own However for buying purposes the user has to allocate upto which amount can be utilized for purchase of shares other instruments However major drawback with both of these is a high brokerage rate up to 0 85% per transaction for an average investor Sharekhan com Indiabull com and 5paisa com have tied up with various banks for credit debit of funds however instructions need to be given by the user for credit debit of funds which may take up to 24 hours of execution Share instruments which are either sold purchased are credited in users demat account and thus restricts online platform from indulging in any malpractices Commodity Trading in India being an agrarian economy thus a lot of potential exists for commodity trading The term commodity future means that a retail investor is taking a position on a future price which may may not favourable at the time of expiration of the contract These prices are dynamic and can be changed by the minute One can take same contract and move out when the going is not favourable

These markets have two critical function to perform i e price discovery and price risk management
i Producer can get an idea of the price likely to prevail at a future point of time and can thus plan crop pattern
ii Consumer gets an idea of future price and can thus plan his purchases
iii Exporter gets an advance indication of likely price to prevail
There is a lot of work in starting and operating a business You have to decide what business to start where to locate it how to build it against stiff competition complying with local state and federal laws You also have to figure out some way to fund your business venture Some people mortgage their homes and max out their credit cards for that illusive start up money And theres the survival money needed for support until the business takes off one way to own a business without all that hassle is to buy stock in someone elses business You can capitalize on their knowledge and business prowess You can also capitalize on their ability to bring in the necessary money to develop and expand the business All you have to do is learn to be a savvy investor and put your money in stocks To dance well with the big kids on the block will cost you some time in gaining knowledge but that is nothing compared to the time and effort needed to start a business and keep it running Plus you can actually emulate the best of the best investors like Buffett and Soros by making your portfolio look like theirs. There are basically two types of stocks common and preferred Common stock is the riskiest because there is no guaranteed dividend and in the event of a bankruptcy shareholders of common stock are the last to be paid Usually with common stock each share represents a vote in electing new board members that way you have a say tiny as it may be in who is going to make those important business decisions Preferred stock has a guaranteed dividend but the company may have the right to buy these stock back at any time they choose Preferred stock may also not have the same voting rights as common stock Stock can also be divided into two classes A and B The main difference between the two classes is the voting rights allowed for a specific companys stock Generally class A stock has more voting rights than class B stock but this is not necessarily the case
One way the small investor has of diversifying his or her investment dollar is by purchasing mutual fund securities There are both advantages and disadvantages in mutual funds investments.

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