Tuesday, May 19, 2009
How to Buy Shares Online: A Guide to Buying Shares on The Stock Market
Posted by Steve Benn at 3:34 AM
Buying shares online is very easy way and convenient way. To buy shares online first you have to Open a Demat Account and Trading Account with any of the registered share broker. You will be provided with an User Id and Password when u get your Demat and Trading Accounts. Then Open your Brokers Web page or Software and use your User Id and Passwords to log in. After Logging In you have to select the company which shares you want to buy then Click on Buy Option and enter the no of shares you want to buy and also enter the price at which you want to buy. That's it. There are many things to remember when you buy shares. stop loss, short sell, Intraday, Delivery, Cash trade e.t.c.
While from within the country you can use http://icicidirect.com, for NRIs; ICICI provides a sub domain based web address http://nri.icicidirect.com for online trading. You must first transfer the money to your ICICI bank account through a transfer of funds from your resident country, assuming that you do not already have money for use of share trading in your account.
How much money is needed?
This is a question many people ask. There is no fixed figure here. You can buy shares for as small an amount as Rs. 500 (depending on which stocks you buy) or as much as whatever your financial capacity entitles. Understand that money is no constraint here. You can start very small; gradually increase your investment in equities. In fact this is the preferred method when you are new. So that you can understand the dynamics of the market as you increase your investment and make smart moves.
Going back to buying and selling, after you login to your account for the first time, you may need to agree some terms and conditions. Then you can allocate funds through the allocation menu, assuming that you have already transferred money to your bank – DMAT account, Select Non PINS account for primary markets (IPOs) and PINS account for secondary markets (equity purchase). You will be mostly using PINS account.
Market or Limit order:
Market order for a sell or buy means that the order is immediately executed at the current market price of that stock. A limit order means that you are specifying the amount of money you are willing to pay or get (in case of a sell) for that particular stock. For example if the current market price of a share is 100 you can say you are willing to buy it at 99. Such a limit order when placed is queued for execution at the exchange. The moment the price of that share reaches the value specified, the order get executed. If it does not reach the specified value, the order gets cancelled at the end of the market day. Same thing happens if it is a sell order.
Once you confirm your sell or buy order, your order appears on the order book. This is where you can monitor the status of your order. It is then queued and executed (status changes automatically depending upon whether the exchange is trading at that particular time, whether your price can be acceptable for a purchase etc. Examples of status indications are 'queued', 'executed', and 'cancelled' (if you did).
Also, once a limit order has been placed, the system will automatically present you an option to make changes to that order after it had been unsuccessful in executing for a certain period of time. At this stage, you can decide either to modify or cancel your order. If you choose to do nothing, your order will continue to wait until the value specified by you, matches the market value.
Labels: sensex, share Market, stock market
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