Bytes & Coins - Tech and Finance

Who is a Stock Broker? A professional who executes buy or sell orders on behalf of the clients. Stockbrokers can be brokerage firms or broker-dealer companies .  Any firm or dealer first needs to be licensed by SEBI before brokerage.  Stock brokers don't make investments in our money, they just implement our investment decisions.  A stock broker is the gateway to stock exchanges.  a trading account lets us carry out financial transactions in the market. A stock broker charges fees from clients for trading.  A trading account is an account with the broker which lets the investor to buy/sell securities. Trading Terminal is the software the broker gives us (investors/clients) to access the market. "Everyday investors pretty much won't interact with human stock brokers anymore." Nowadays the buying & selling orders are submitted every day by investors electronically by the computers.  But the stock broker's profession wasn't exhausted completely, instead, t...

Regulators, the Guardians of Capital Market Indian Capital Markets are regulated & monitored by the Ministry of Finance, the Securities & Exchange Board of India (SEBI), and the Reserve Bank of India (RBI). Ministry of Finance It regulates the Department of Economic Affairs - Capital Markets Division. This division is responsible for formulating the policies related to the orderly growth & development of the securities markets (i.e., shares, debt and derivatives) as well as protecting the interest of investors.  Responsibility: Institutional reforms in the securities markets. Building regulatory & market institutions. Strengthening investor protection mechanism. Providing an efficient legislative framework for securities & markets.  SEBI (Securities Exchange Board of India) SEBI Act 1992 regulates the functioning of this independent body in governing the Indian stock exchanges.  Functions of SEBI: It checks price rigging or price fixing. It prohibits ...

Investment Process Investment involves various processes to be followed: define investment policy by planning our savings, investment to be done & time of return expected. gain knowledge & risk about the financial market where we are going to invest. analyze the market, industry, & company where we are going to be investing; to know about the history & profitability of the company or sector where we are going to invest. identification of the valuation of the company where we have invested (intrinsic & future value). portfolio construction means constructing a portfolio of a variety of companies (diversification). portfolio evaluation of our portfolio (appraisal/revision of portfolio). Requirements for Stock Trading DEMAT Account (Dematerialised Account): an account that allows us to electronically hold company shares & securities. It will be opened with a stockbroker (associated with a stock exchange). We can hold dematerialized securities such as stocks, mu...

What is Investment? It is a process in which an item or asset is acquired with the goal of generating income or appreciation over time. e.g. investment in FDs (Fixed Deposits), gold, equity (stocks), property, etc. Investment is better than saving as it could provide returns in the future.  Pillars of investment: safety, liquidity, and return. Purpose of Investment Wealth creation to fulfill financial & life goals like building our home, marriage, children's education, setting up business, buying land, retirement, etc. And to achieve these goals we should start investing from today. Inflation Tax benefits Secondary income Emergency savings Savings Investment according to its priority & time Long Term Investment Compound Interest Compounding is the process whereby interest is credited to an existing principal amount as well as to interest already paid . Compounding thus can be constructed as interest on interest - the effect of which is to magnify returns to interest over ...

Stock Market & Stock Exchange The stock market is where publicly traded companies' shares are listed. It is a virtual market, not a physical market. The stock market is a set of exchanges.  The stock exchange is the place where the trading of shares takes place. Companies pull money from the stock market in which people invest their money to earn returns from their savings. We can also sell the shares back in the share market when share prices are up and earn a profit. The stock market is full of risks, as the price of shares changes rapidly.  Shares/Stocks  are the units of equity ownership in a corporation, which means if we buy more shares of the company then we have more fraction of ownership of the company, and if we have less number of shares we have less ownership in that company. There is no guarantee of profit when we buy stocks which makes stock one of the most risky investments . If a company does not perform well its stock can fall in price and investors...