Posts filed under 'Fundamentals on Share Market'
Share Market Trading includes buying and selling of company shares either through Stock Exchange or Over-the-Counter (OTC). It is also called the Equity Trading.
Shares are certificates which represents ownership rights of the holder in a company.
Share Market is the market for securities where organized issuance and trading of shares takes place either through exchanges or over-the-counter in electronic or physical form. It plays an important role in channelizing capital from the investors to the business houses which consequently leads to the availability of funds for business expansion.
Basically, Share Market can be divided into two parts :-
1.Primary Market It is the market where new issues of securities are offered to the investors.
2.Secondary Market An investor of a secondary market buys a security from another participant of the same and not from any issuing corporation (as in case of Primary Market).
Shares in the Share Market are either traded through :-
(a) Stock Exchange These are organized market places where stocks, bonds are other equivalents are traded between the buyers and sellers where exchange acts as a counter-party to both the participants in case of any default. The contracts are standardized and not customized ones. For example, NYSE, NASDAQ, NSE, NIKKEI, etc.
(b) Over-the -Counter (OTC) These are not centralized exchanges. Here, the trade takes place through a network of dealers. Generally, the OTC contracts are bilateral customized contracts and not standardized ones.
The shares traded are Common Stocks. Common Stocks :-
Gives an ownership right to the holders of the stock and hence the share holders are entitled to the earnings of the company according to their stake. Holders also get dividends on those stocks as and when given by the company. Liquidity of common stocks are very high and can be bought and sold at any time of the market hours.
Important Participants of Share Market Trading are :-
Buyer An investor who buys a script in the belief that the market will rise. If his hinge becomes right then he makes profit otherwise he suffers loss.
Seller Seller of a stock sells in the hope that the stock price will go down.
Stock Broker Brokers are persons or firms who execute buy/sell order on behalf of the investors and charge a commission for rendering the service.
Share Trading are done in three ways:-
(a) Offline Share Trading In this form of trading the customer either goes to the share broker’s place and sits before the share trading terminal and asks the dealer to place orders in his account. or rings the share broker, asks the share quotes and other relevant informations, and accordingly places orders over the phone.
(b) Online Share Trading The client could avail the share market and could place his order on his own from any place he wants, provided he has a computer with an Internet connection.
Open Outcry Trading
Here, the investors put their orders through the brokers and these share brokers in turn place and execute orders on behalf of them on the floor of the exchange. These brokers gather in a particular place on the trading floor known as Trading Post. There is a person called as the Specialist present in the trading post who does the matching of the buy and sell orders. This type of auction method is called Open Outcry Method.
May 20th, 2008
Share Market Report is the report on the share market of an economy. It generally includes fundamental and technical analysis. Investment professionals use this report for interpreting the future movement and valuation of the share market. Economists utilize the informations from the Share Market Report for determining the health of the domestic financial market and consequently its impact on the country’s market.
Share Market Report provides a sketchy summary of the equity market on a wide array of disciplines in order to give a cross-section view on the financial health of the country at a given time.
Share Market Report generally contains :-
Texts incorporating daily data
Charts incorporating daily data
Year-end-Report
Additional Charts
Annual Data
Share Market Report gives the following informations :-
Technical Trend of the Financial Market of a country (through Data, Statistical Tools, Charts) Every country has one or more stock exchanges. Each Stock Exchange has its own index. This report gives the technical charts, statistical tools (such as Relative Strength Index, Stochastic, Moving Averages, etc.) and data on each of these indexes and also a comparative study of the performance of all the stock exchanges.
Volatility (through Data, Statistical Tools, Charts) Share Market Report supplies with the indicators (eg. Call-Put ratio) gauging the volatility of the different indexes.
Sector-wise Performance (through Data, Statistical Tools, Charts) Share Market Report gives the comparative analysis of the performance of various important sectors of the economy.
Valuation (through Data, Statistical Tools, Charts) Share Market Report gives price-earning ratios (both historical and current); analysis of growth of earnings for the last 1, 3 and 5 years; macro projection of the analysts about the growth of the future earnings.
Comparative Returns (through Data, Statistical Tools, Charts) Share Market Report also does a comparative analysis on the dividend earnings of the investors through holding of shares in different quarters of the year. This is done by calculating the dividend-price ratio.
Some of the terms and tools used by the analysts in the Share Market Report are :-
1.Moving Averages
Generally, the moving averages used by the analysts are 200DMA, 50DMA, 18DMA and 9DMA. These give the historical average price of a share or an index. i.200 and 50 DMAs are used by the chartists for finding out the resistance and support levels. ii.18DMA and 9DMA are used together for finding out the buy and sell signals through their different cross-over patterns.
2. Highs and Lows (New)
New highs and lows of any share or index signify strong resistances and supports.
3. Relative Strength Index (RSI)
RSI is a momentum oscillator. It tries to gauge the velocity of the directional movement of price which shows either overbought or oversold conditions.
4. Momentum Oscillator
This tool helps an investor to gauge the overbought or oversold conditions which is calculated by considering the moving average of the last 10 days. Its goal is to show whether a stock or index is slowing down or gaining in momentum.
Hence, Share Market Report helps the analysts, strategists, chartists and the economists to come to conclusions about the health of the domestic financial market and ultimately about the economy as a whole.
May 20th, 2008
Share Market Overview would give an overall idea about the share market, its participants, types, etc.
Share market is the market for securities where organized issuance and trading of shares takes place. It plays an important role in channelizing capital from the investors to the business houses which consequently leads to the availability of funds for business expansion.
Shares are certificates which represents ownership rights of the holder in a company.
Shares in the Share Market are either traded through :-
(a) Stock Exchange These are organized market places where stocks, bonds are other equivalents are traded between the buyers and sellers where exchange acts as a counter-party to both the participants in case of any default.
(b) Over-the -Counter (OTC) These are not centralized exchanges and the trade takes place through a network of dealers.
Basically, Share Market can be divided into two parts :-
1.Primary Market It is the market where new issues of securities are offered to the investors. 2.Secondary Market An investor of a secondary market buys a security from another participant of the same and not from any issuing corporation (as in case of Primary Market).
Generally, stocks are of two types :-
a)Common Stock
It gives an ownership right to the holders of the stock. The holders are entitled to receive dividends whenever the company announces.
b)Preferred Stock
These stocks also give ownership right to its holders. Its holders enjoy the privilege of receiving dividends from the company in preference to any other common share holders. Constituents of Share Market are :-
Buyer
An investor who buys a script in the belief that the market will rise. If his hinge becomes right then he makes profit otherwise he suffers loss.
Seller
Seller of a stock sells in the hope that the stock price will go down.
Stock Broker
Brokers are persons or firms who execute buy/sell order on behalf of the investors and charge a commission for rendering the service.
Share Broking Company offers two types of share trading facilities :-
(a) Offline Share Trading In this form of trading the customer has to place order to the dealer of the stock broking firm either in person or over phone.
(b) Online Share Trading The client could place his order on his own from any place he wants, provided he has a computer with an Internet connection.
There are mainly two types of trading :-
1.Intra day trading
They buy and sell stocks during the same day.
Intra day Traders are of two types :-
i.Scalp Traders Investors who perform many trades per day for scalping out small profits out of the bid-ask spread from each trade are known as scalp traders.
ii.Momentum Traders Investors who pounce on those stocks which move significantly in one direction and book desired profit are called momentum traders. They do this within a day.
2.Delivery trading
The investor buys the share for holding purposes.
Delivery Traders are :-
i. Technical Traders They believe that buying/selling signals are present within the graphs and charts of the stock.
ii. Fundamental Traders They perform trade on the basis of study of fact-sheets of the company like historical profit graph, balance sheet, anticipated earning reports, stock splits, mergers and acquisitions, etc.
iii.Swing Traders
They are basically fundamental traders who take delivery of trades for a span of short period generally more than one day.
May 20th, 2008
Share Magazines are basically magazines dealing with everything related to shares. These come under the category of business magazines. But they provide more than that of a typical business magazines.
Share Magazines generally advocate the philosophy of laissez-faire and free market economy. They always argue in favor of less restrictive import and immigration policies. Share magazines are generally biased towards supply side economics and explain the economic concepts important for it such as Laffer Curve .
Business Magazines generally give informations about the present scenario of the business as a whole, company specific news, and economy news.
But the share magazines do much more than this. It gives the following news and articles :-
- Present Domestic Business Scenario
- Present World Business Scenario
- Present situation of the economy which could affect the Share Market
- Present situation of the world which could affect the Share Market
- Company Specific News
- Share Tips ( Resistance Levels , Support Levels , Targets , etc.) on the indexes and Specific Shares
- Technical Analysis on portfolio of shares with charts
- Fundamental Analysis on selective prospective shares
- Ratios and various calculations of a wide range of shares
Share magazines play a very important role in educating the investors about the share markets and also gives advice to perform better in it.
Share Market is all about informations. It does matters that how fast a person is able to gather knowledge about the market and acts fast enough to reap the gain. These share magazines equip an investor with all the relevant informations needed by him/her to act in a rational way to make maximum profit.
Share magazines not only deals with the shares but also with many other asset types such as future, options, commodities, mutual funds, insurance,etc.
Some of the famous Share Magazines are :-
- Wall Street Journals
- Bloomberg
- Money gain
- Dalal Street
Thus, these magazines play an important role in supplying informations regarding domestic economy, world economy, specific company news, share tips, and charts which ultimately helps in proper decision making of the investors.
May 20th, 2008
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