Day trading and Delivery trading are the two main types of shares trading.

¨ Day trading –
Buying and selling of shares on daily basis is called day trading this is also called as Intra day trading. Whatever you buy today you have to sell it today OR whatever you sell today you have to buy it today and very importantly during market hours that is 9.55 am to 3.30 pm (Indian time).

¨ Delivery Trading

In Delivery Trading, as the name say, you have to take the delivery of shares and after getting these shares in your demat account you can sell them at anytime (or you can hold them till you want, there is no restriction).

In delivery trading you need to have the amount required to buy share for example, if you want to buy 100 shares of Reliance at price 500 than you must have (100*500) Rs. 5000 in your account; once you purchased these shares will get deposited in your demat account (say after basically, trading day and 2 additional days). Then you can sell these shares when the price of these shares goes up or else you can sell whenever you want.

Please Note - First you have to buy and sell. You can’t sell before buying in delivery trading while it’s possible in day trading.

Following are the types of orders which are used for buying and selling of shares.
¨ Market Order -
When you put buy or sell price at market rate then the price get executes at the current rate of market. The market order get immediately executed at the current available price. In market order there is no need to mention the price; the shares will get executed at the best current available price. If you wish to buy or sell shares at any specific price then market order is not suitable for you then you have to go for limit order. Market order is for those who want to buy or sell immediately at the current available price.

¨ Limit Order -
It’s totally different to market order. In limit order the buying or selling price has to be mentioned and when the share price comes to that price then your order will get executed with the mentioned price by you. But here it’s not sure that the price will come to your limit order. In day trading its risk because you have to close all your transactions before 3:30 PM and if in case price doesn’t reach to your limit order then your order will be open and then you have to go through (bare) the heavy penalties. Importantly limit order and stop loss trigger price are used together.

¨ Stop Loss Trigger Price-
Stop loss and trigger price are used to reduce the losses. This is very important term especially if you are doing day trading (intraday).Stop Loss as the name indicates this is used to reduce the loss.

Share Trading -
Buying and Selling of shares is called share trading.
Mainly there are two ways of doing share trading.
¨ Online Share Trading.
¨ Offline Share Trading.
¨ Online Share Trading -
Doing share trading with help of computer, internet connection and with trading/demat account is called Online Share Trading.
If you would like to do online share trading then you should have a computer, internet connection and online trading account.
Details of Online share trading has been given in next chapter.
¨ Offline Share Trading -
Doing share trading with the help of broker or through phone is called Offline trading.
In other words trading will be done by another person on your behalf based on the instructions given by you, and then the other person can be a broker.The broker will do buying and selling of shares on your behalf depending on the instructions given by you.
If you want to do offline share trading then you need to open the demat account. (provide link for procedure to open the demat account)

¨ Open - The first price at which the stock opens when market opens in the morning.
¨ High - The stock price reached at the highest level in a day.
¨ Low - The stock price reached the lowest level in a day.
¨ Close - The stock price at which it remains after the end of market timings or the final price of the stock
when the market closes for a day.
¨ Volume - Volume is nothing but quantity.
¨ Bid - The Buying price is called as Bid price.
¨ Offer - The selling price is called offer price.
¨ Bid Quantity - The total number of shares available for buying is called Bid Quantity.
¨ Offer Quantity - The total number of shares available for selling is called Offer Quantity.
¨ Buying and selling of shares - Buy is also called as demand or bid and selling is also called as supply or
offer.First selling and then buying (this only happens in day trading) is called as shorting of shares or short sell.
¨ Share Trading - Buying and Selling of shares is called share trading.
¨ Transaction - One complete cycle of buying and selling of shares is called One Transaction.
¨ Squaring off - This term is used to complete one transaction. Means if you buy then have to sell (means
square off) and if you sell then you have to buy (means square off).
¨ Limit Order - In limit order the buying or selling price has to be mentioned and when the share price comes
to that price then your order will get executed with the mentioned price by you
¨ Market Order- When you put buy or sell price at market rate then the price get executes at the current rate of
market. The market order get immediately executed at the current available price

The charges for account opening, annual account maintenance fees and transaction charges vary between various DP’s. To have latest charges please visit websites of www.nsdl.co.in and www.cdslindia.com

Finally -

The DP will debit your account with the number of shares sold. You will receive the payment from your broker.

Important points to remember while opening online account
¨ Make multiple enquiries and try get low brokerage trading account.
¨ Also discuss about the margin they provide for day trading.
¨ Discuss about fund transfer. The fund transfer should be reliable and easy. Fund transfer from your bank account
to trading account and visa versa. Some online share trading account has integrated savings account which
makes easy for you to transfer funds from your saving account to trading account.
¨ Very important is about service they provide, the research calls, intraday or daily trading tips.
¨ Also enquire about their services charges and any other hidden if any.
¨ And also see how reliable and easy is to contact them in case if any emergency. Emergency closing or squaring
off trades in case of any technical or other problems.

You have to approach a DP to open a Demat account.

Most banks are DP participants so you may approach them or else you can contact us.

To have latest list of registered DP please visit websites www.nsdl.co.in and www.cdslindia.com.

A broker and a DP are two different people. A broker is a member of the stock exchange, who buys and sells shares on his behalf and also on behalf of his customers.

Following are the documents required to open Demat account.
When you approach any DP, you will be guided through the formalities of opening an account.

The DP will ask to provide some documents as proof of your identity and address.

Below is a list but you may not require all of them.
PAN card

Voter's ID

Passport

Ration card

Driver's license

Photo credit card Employee ID card

IT returns

Electricity/ Landline phone bill etc.

# Securities and Exchange Board of India (SEBI) is a board (corporate body) appointed by the Government of India in 1992 with its head office at Mumbai. Its one of the function is helping the business in stock exchanges and any other securities markets.

# Demat (short form of Dematerialization) is the process by which an investor can get shares (also called as physical certificates) converted into electronic form maintained in an account with the Depository Participant (DP).

# DP could be organizations involved in the business of providing financial services like banks, brokers, financial institutions etc. DP’s are like agents of Depository.

# Depository is an organization responsible to maintain investor's securities (securities can be shares or any other form of investments) in the electronic form. In India there are two such organizations called NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services India Ltd.)

# Investor’s wishing to open Demat account has to go DP and open the account.

# Opening the Demat account is as simple as opening the bank account with any bank. As you need bank account to save your money, make cheque payments etc, likewise you need to open a demat account if you want to buy or sell stocks.

# All shares what you possess will show in your demat account, so you don't have to possess any physical certificates. They are all held electronically in your demat account. As you buy and sell the shares, accordingly your shares will get adjusted in your account.

Is a demat account a must?
The market regulator, the Securities and Exchange Board of India (SEBI), has made it compulsory to open the demat account if you want to buy and sell shares.
So a demat account is a must for trading and investing.