Broker is an individual or firm that charges a fee for executing buy and sell orders of an investor. A full-service broker provides a large variety of services, including research and advice. Discount brokers offer web-based platforms, without research and advice. Clients are charged a flat fee for each trade, irrespective of its value. Full-service brokers charge fee as a percentage of the total turnover. For the cash market, rates vary between 10 paise and 30 paise for delivery-based trades, and below five paise for intra-day trades.
For an investor, investing in a bad business with good management will give a better return rather than investing in a good business with bad management. We have skeletons of numerous IT companies lying by the wayside to prove this point. The same is true for every sector. A boom in any sector attracts genuine promoters as well as those who want to make a quick buck on the stock. Differentiating them is the art part of investing. Identifying good companies on the basis of financials is the science part of investing.
For a regular trader on the stock market, a buy or sell is all about getting the timing right. This can be a problem for those working on limited access terminals or travelling extensively. The solution appears to lie in your mobile. How can you harness the power of these platforms? India has become the world's fastest growing market for mobile-based stock trading since its launch in 2010. On the NSE, the turnover of mobile transactions has increased by 130% over the past year, from Rs 50,800 crore in August 2014 to Rs 116,186 crore in August 2015.Experts say these figures could double in the next two years.
Recent meeting between the Prime Minister and top industrialist pointed out the fact that the private sector was not willing to take the risk of adding capacity unless it sees an improvement in the ease of doing business. By ease of doing business these top industrialists mean that easing off the inspector raj and more clarity on taxes. However, what came out clearly is that corporate India is going to play a wait and watch game. The onus of kick starting the economy is now on the government. So, what are the avenues that the government has in putting India back on the growth track .....
The rate hike by US Fed that time resulted in a sharp outflow from Indian debt markets. Foreign Institutional investors (FIIs) pulled out significantly from the Indian debt market and their cumulative holding went down from $1.77 billion in December 2004 to $550 million by June 2006. On the contrary, Indian equities, chasing high growth in the economy, witnessed a strong inflow — FII pumped in a record Rs 1,22,687 crore between 2004 and 2006. But this was the time when asset classes were doing well and there were few uncertainties.
One thing that every successful investor looks at is stocks with strong promoter and management. It is safer to invest in a company which is in a bad phase but has good promoters than to invest in a company that is having its day under the sun but has a tainted promoter. Good promoters and management can handle a bad situation and can work their way out, but a tainted promoter would look at ways to make money for himself rather than his shareholders when the times are good. The second important parameter is either low level of debts or no debts. If a company does not have much debt then it is generally in a strong financial state and is well placed to grab growth opportunities coming its way. Such companies are generally high dividend paying ones.
There is no near term impact on Indian and other global markets. This is because foreign investors hold less than one per cent of Chinese stocks in China. The stocks that are held in Chinese companies are either that listed in Hong Kong or in the USA or in other countries. These stocks had not moved as much as those listed in China. Thus the fall in share prices in China will not result in fund managers withdrawing money from other markets.
High frequency trading (HFT) have generated a lot of debate in global media on its usefulness for market participants. Before looking at how an investor should capitalise from these trades we shall take up the question of advantages and disadvantages of HFTs in the Indian scenario and how retail investors can trade in such a competing environment.
In a bid to prevent individual market participants from high-risk speculation trade, market watchdog Securities and Exchange Board of India (SEBI) is mulling to raise entry bar for trading in equity derivatives. The regulator is considering to increase the minimum contract size for stock and index derivatives to either Rs 5 lakh or Rs 10 lakh from the existing Rs 2 lakh, media reports suggests. The regulator's concern is valid given the surge in the number of speculative activities.
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