How to choose an optimum brokerage firm ?

While trading a huge sum of money is to be paid as brokerage. Therefore traders must be very careful while choosing brokers for themselves. Primarily we have three types of stock brokers :
Discount Brokers : These are brokerage firms who facilitates you to carry out entire trading process in a hassle free manner. They provide you with all the required tools and research reports which you require to manage your portfolio. Discount Brokers offers services at lowest cost among these three brokers.

Premium Discount Brokers : Investment advise is offered by them along with all basic services that a brokerage firm provides. These brokers charge more then discount brokers.

Full Service Broker : These brokers offers one-to-one advise on investment and also trades on your behalf.They generally offer widest range of services among these three. The more service you choose more you pay.

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What is MIS, NRML and CNC order types in stock market ?

MIS (Margin Intraday Square Off) MIS order types are for intraday traders and need to squared off during the same trading day. It will be activated till that particular trading day only.The biggest advantage of this order type is that while buying shares using it traders need not to pay the entire amount only a margin amount is required to be paid.Because of this feature traders can buy more number of shares with less capital. If in case position is not squared off or converted into other order types by the traders end then it will be automatically squared off by RMS few minutes before the market closes. If you want to strictly trade on intraday basis then you can rely on usage of such order type. As here you need to worry about squaring off your position, it will automatically get squared off before market closes. NRML (Normal Order) NRML order type is used while trading in future market. It is used to carry forward trade orders in derivatives segment. This order type w...

Buy back stocks: Meaning, advantages & disadvantages.

Meaning of buy back stocks Buyback stocks is a process where companies repurchase its stocks from stockholders or open market. This is generally considered to be a good sign as it is one indirect way for companies with surplus cash to maximize the wealth of its stockholders.A company with surplus cash prefer to buy its stocks when current market price of stocks is less than book value or what they expects it to be. Companies buy their stocks at a premium price and this leads to increase in stock price. Possible reasons for buyback are discussed below: 1) To increase stockholders value as company uses its surplus funds which is not suitable for any investment options it results in higher earning per share. 2)For protection against corporate takeovers. Buyback helps in increasing the promoters holding thereby reducing the chances of takeover. 3)To improve financial ratios as buyback reduces the cash component on companies balance sheet. Advantages of buyback : 1)Com...

How to open a Demat account and what benefits are offered by dematerialization?

With the introduction of new technologies trading in the stock market has changed a lot. Earlier when BSE was formed in 1875 at that time traders and investors used to stand on floor and shout prices of stocks for buying and selling. The money was exchanged between buyer and seller and a physical copy in the form of certificate was issued to the buyer.The entire process was very time-consuming. In 1996 concept of dematerialization was introduced in share market. Physical copies of shares were replaced by electronic form and were credited and debited from the Demat account of a trader. Following are the benefits offered by dematerialization : 1)Common bank In Demat account along with shares, other financial instruments like bonds can be stored as well. Traders can use the same account to trade in stocks and bonds both. 2)Time and cost To deliver a physical copy of shares cost is involved and also it takes the time to do so. With dematerialization, this cost and time c...

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