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Showing posts from May, 2017

Tips to become a successful day trader

Indian share market has attracted various investors towards itself by its good performance and has become an attractive source of investment now. Returns earned on investment in shares by long term traders is higher than investment in other markets and assets. However high capital is required to trade on a long-term basis. Another way by which traders can trade with less capital and earn good returns is intraday trading. Day trading means not holding your position in stocks beyond the current trading day. To trade on intraday basis traders need to have  Demat account  and trading account. The risk associated with this type of trading is high. Some useful tips to become a successful day trader are discussed below: Trade by using a practical approach Movements in intraday stocks are based on the market fluctuations.To earn good profit here traders have to trade on the basis on present market movements.When the market is bullish instead of waiting for large movements...

What is meant by Earning Per share (EPS) and its types ?

A company's earning is the net profit of a company after taxes and interest. Earning per share is the part of company's profit which is allocated to equity share holders after all external share holders have been paid.It is a very important financial measure. Before investing in shares of any company it is important to carefully analyze its earnings. This will help in understanding companies future growth and its ability to pay dividend to its shareholders.Traders and investors have different goals to meet for which they trade in market.To trade in a secure and wise manner without risking your capital such analysis is helpful. The shares of company in which you trade are added in your demat account and removed when you sell them. EPS is considered to be a most important factor while determining share price and price to earning valuation ratio.Calculating it is a simple process and also available on financial report of the company.The formula which is used for ca...

What are bonus shares , its advantages & disadvantages ?

Bonus shares are among popular corporate actions along with dividends. Companies which can not pay a dividend in the form of cash because of liquid funds crisis in spite of earning a good profit as they want to retain some good amount of profit in their reserves issues additional shares to its existing shareholders which are known as bonus shares. Characteristics of these shares are similar to those which shareholders already own with one difference, earlier shares were issued against the receipt of consideration in cash and bonus shares are issued for free of cost. Because of this reason, it is termed as a bonus. Once they are issued by the company like other shares they are successfully reflected in  Demat account  of investors. Following are some of the advantages of bonus shares: From company's point of view Issue of bonus shares facilitates a company to conserve cash which can be further reinvested for carrying out different operational and functional activitie...

What is meant by delivery trading and brokerage?

Delivery trading is a secure form trading in which a trader either buy or sell share but does not square off the position same day. Transactions like these are settled as per T+2 settlement cycle of the exchange.The shares which you bought will reflect in your  demat account . It is most common type of share trading preferred by stock market investors and traders.Once you have taken the delivery of shares you can hold them as long as you want. Their is no limit for that.But for taking delivery sufficient fund must be present in account as no margin is provided here to buy shares. Delivery brokerage  also known as equity delivery brokerage is the brokerage which is charged on a delivery trade that has to be settled in T+2 settlement cycles. Usually brokers charge different brokerage for intraday and delivery trades where intraday brokerage is less than delivery brokerage. The reason behind it is that risk in delivery trade is high and margin obligations remain blocked for...