Hiiiii,
I am writing this blog assuming that by now you all have opened your accounts
with some “broker”
(NEW READERS: What accounts he is talking about)
Ohhhhhhh!!!!! So I have some new readers, great, for new readers
please read my previous blog “How to start investing in Stock Market – for
beginners” for knowing about accounts I am talking about. And now here is the
sequel to my first blog
“What is
Intra-day trading and Cash buy for deliveries”
Trading in Equity shares can be done in two ways one is Intra
trading and the other is buying for deliveries.
{An equity share, commonly referred to as
ordinary share also represents the form of fractional or part
ownership in which a shareholder, as a fractional owner, undertakes the maximum
entrepreneurial risk associated with a business venture. The holders of
such shares are members of the company and have voting rights. Source
: moneycontrol (for those who don’t know the meaning)}
(Disclaimer: Owning
the shares doesn’t means that you have become controlling authority of the
company)
CASH BUY for Delivery
In this segment you actually buy the shares for value that means if
the shares is of Re 1 than you have to spend Re 1 for purchasing 1 share, but
shares will be deposited in DEMAT account after 2 days or we can write it as
T+2 days (looks professional na!!!), and after receiving delivery only you can
sell it.
(Suggestion : Since you all are new always go
for long term i.e. cash buy for delivery)
(READER: OK started suggestion only after
one blog)
No, this suggestion is given by great investor Warren Buffet. Now
don’t tell me that you don’t know him and if you don’t then please Google it.
INTRA DAY TRADING
Intra day trading or Day trading refers to the trading where trades
are settled by the day end or we can say trade is square off (Sounds
Professional again). Hence in Intra day you can sell shares within seconds,
minutes and hours after you buy, whenever you want and when you feel that your
profit Target has been reached. But it should be done on the same day.
For example if you bought the shares today then you will have to sell the same
today only.
(READER:
What if I am not able to sell it on the same day)
Here you need to be careful because if you are not squaring off your
position then exchange will do it automatically on your behalf before closing
of the market i.e. if you have bought some shares and didn’t place a sell order
then market will automatically sell your shares at the prevailing price in the
market
(READER : What’s the benefit??)
Benefit
1: We don’t have to block the whole value of the
shares, we just have to block the margin amount i.e. usually 1/10th
of the values of shares which is required to be deposited. Note: It is not
always 1/10th, it depends upon different brokers how much leverage
they are providing.
Benefit
2: You can sell the shares bought on the same day
and vice versa.
(REMINDER
: If you can’t give time and cannot monitor the price of shares for whole day
KEEP AWAY FROM INTRA DAY TRADING)
(INTRA DAY TRADING : Why are you writing against me)
You (Talking to INTRA DAY
TRADING) Keep quite, your comments not required
So
hope now you understand the difference and in short we can say that:
Cash
For Delivery Re 1 = 1 share (assuming that value of one share is Re 1)
INTRADAY
TRADING Re 1 = 10 Shares (assuming that value of one share is Re 1)
Thats
all for now. Hope you like it and do comment.
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