The national stock exchange (NSE) and the Bombay stock exchange (BSE) are India's two primary stock exchanges. The trading time for the equity market in both the exchanges is between 9:15 AM to 03:30 PM, Monday to Friday.
How Does Online Share Trading Work?
- Open a trading account:
Begin by opening a share trading account with a SEBI-registered brokerage firm. This account is linked to a Demat account that stores shares in digital form.
- Fund your account:
Transfer money into your trading account to start buying shares based on current market prices.
- Place buy/sell orders:
Use the online platform to place market orders (executed at current prices) or limit orders (executed at your specified price).
- Execution through stock exchanges:
Orders are processed through recognised exchanges like the NSE or BSE, where transactions between buyers and sellers occur.
- Monitor market activity:
Track stock prices, company developments, and broader market movements regularly to make informed trading decisions.
- Understand trading types:
Beginners should familiarise themselves with trading styles such as intraday trading, swing trading, and long-term investing.
- Profit and loss realisation:
Profits are made by buying low and selling high. However, losses may occur if share prices fall below the purchase price.
Types of share trading
Share trading generally falls into two main categories: active trading and day trading.
Active trading involves investors who make 10 or more trades per month. These traders often rely on market timing strategies to profit from short-term movements triggered by company-specific or broader market events.
Day trading, on the other hand, focuses on buying and selling the same stock within a single trading day. Day traders aim to capitalise on rapid price fluctuations and typically show little interest in a company’s fundamentals.
Share trading brokerage charges
When you start trading, charges will be levied on your share market transactions by the stockbroker, which is a fee for the services provided. A full-service stockbroker will charge a percentage of the transaction value as brokerage. They provide additional services such as stock recommendation, advisory services, and customized reports, and hence the charges are on a higher side. On the other hand, discount brokers provide Demat and trading accounts and the basic tools to help you make trade decisions by yourself. As a result, the charges are comparatively low, usually a flat fee per transaction, irrespective of the transacted value.
With Bajaj Financial Securities limited, you can get the benefit of a flat fee per trade and save significantly on brokerage costs. Share trading is one of the investment avenues that can help in the potential growth of wealth to accomplish your life goals. The more you understand about share trading, the more benefits you can draw from it.
What happens when you buy a share?
When you buy a share, it means you start owning some stake in the company. For example, if a company has issued 1000 shares, of which an investor owns 100 shares, so he holds a 10% stake in the company. As a result, shareholders get a say in the company’s governance and can vote on critical decisions of the company.
While this may be advantageous for those who control a larger portion of the company’s shares, for a retail investor, the benefit of owning a share is derived from their potential price appreciation in the share markets. Thus, investors try making profits from share trading by selling shares at a higher price than the purchase price. But then the question arises, what causes share prices to change in the share market?
How are share prices determined?
In the stock market, prices are established through a price discovery process, where buyers and sellers reach an agreement on value. This mechanism depends on the bid and ask prices. The bid represents the price a buyer is willing to pay for a certain number of shares, while the ask is the price a seller is prepared to accept.
Additional read: Stock Market Timings
Add money to your trading account
To begin trading, you must ensure that your trading account is adequately funded. Several methods are available for transferring money into the account, each with its own features and limitations.
One of the most common methods is using a payment gateway. Many banks offer net banking and debit card options to credit funds instantly. However, using credit cards is not permitted, as per regulatory guidelines. Be mindful that your service provider may levy charges for such transactions.
Bank transfers via NEFT (National Electronic Fund Transfer), RTGS (Real-Time Gross Settlement), and IMPS (Immediate Payment Service) are also widely used. NEFT is free and generally takes a few hours, while RTGS is suitable for high-value transfers above ₹2 lakh. IMPS enables round-the-clock transfers, even outside banking hours, providing added convenience. When using NEFT or RTGS, ensure that the trading account is added as a beneficiary for smooth transactions.
Another method is transferring funds offline using cheques or demand drafts. Though reliable, it usually takes two to three days for the funds to reflect in your account. Properly signed cheques and an adequate account balance are necessary to avoid penalties.
UPI (Unified Payments Interface) has become a popular instant transfer option, thanks to its ease of use and integration with bank accounts.
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