Fundamental analysis is a popular method of stock selection for long-term investments. In basic analysis, efforts are made to calculate the actual value of any company based on the balance sheet, income, flow of cash etc. If its stock is less than its actual value in the market, then it is considered beneficial to buy it because its expectation is high.
Technical analysis is also an important way of choosing stocks for investment. Technical analysis assumes that all the things related to a stock are included in its market price. In this, it is decided to invest in a stock based on the previous trading day prices and business volumes. To make this decision, technical analysts study daily, weekly, monthly and annual charts of that stock.
Stop loss is the point or value at which the stock traders sell their shares and avoids the subsequent losses. In other words, the stop loss of a stock is that value, after which there is no loss to you and at which point you decide the extent of the possible loss due to a stock, which reduces your loss.
How does work
The shareholder determines the limit of stop loss. For example, suppose if you bought a stock for Rs 100, but you feel that it may fall, then you will tell your broker that if the stock price falls below Rs 95, then sell it to the stock. Give. In this case, in case of this stock, your stop loss is Rs 95. If even after this the stock falls, then there will not be any harm to you because you have sold it at the level of Rs. 95.
Not only at the time of decline, but it also are works even when stock prices increasing. For example, tell your broker about the same stock you bought at a price of 100 rupees, that if the stock reaches Rs 115, it should be sold.
Circuit is of two types – lower circuit and upper circuit. Circuit was imposed in the stock market recently in India. An additional circuit was imposed after the last Lok Sabha election. Lower circuit was inserted after entering the upper circuit and declining when the market was accelerating. When a horrific situation arises during the procurement of shares in the stock market, the circuit is applied to get control and this situation is called Circuit Breaker.
Sometimes the word collar is also used for this condition. After registering the index down to a certain percentage, the exchange prohibits such trading to activate its trading. For example, Dow Jones’s industrial average can be banned from buying a stock for one hour for one hour after the 10 percent drop in the industrial average. Circuit is imposed on some other circuit breaker when 20 percent and 30 percent fall is recorded.
Stock trader terminology is used for investors in the financial market. Trading or trading of securities, take this task as a part-time or full-time profession. Often, such traders work in any organization through hedge funds, mutual funds, portfolio managers or pension funds. Shares of the stock are not limited to only the shares, but they can also invest in other financial instruments.
In order to become a successful stock trader, investors have to adopt a policy of gaining profits. For example, some stock traders invest in short-term stocks, which can earn money from shares, while investing in some long-term stocks. The stock policy of the investor in the stock is personal on the trader. All this goes on the basis of estimate. In the field of stock trading, names like Warren Buffett, Benjamin Graham, Isaac Newton and George Soros are taken as some big players.
Under the stock option, a party facilitates the second party to sell shares according to its convenience. The buyer of this share has the full right to buy or not. You cannot be forced to buy or buy stocks anytime under the stock option.
This means that you cannot buy or sell shares to anyone by compromising on a particular period or on a particular date. In England, the option of the stock option is used instead of the stock option. Purchase of American options at any time between the purchase, stock purchase and the date of its expiry.
Put option is an option that allows a buyer or holder to sell all his shares at a fixed price or before a certain date. It is obligatory for the seller or writer to buy it. There is an exercise price of every put option. This is the price on which the holder sells the shares to the option writer.
If the price of the stock is below the exercise price, then those who give the call benefit. This option is also called in the money. It also has a special value. This is the difference between the exercise value and the call price.
Call option is also a kind of contract between the two parties. Under this, the right to purchase a fixed share of shares at a given price is given. However, it is not binding It is bound to sell seller shares in case the buyer wishes. The buyer pays a premium for this. Call option is beneficial when the price of shares is climbing.
Know what happens to futures trading?
One advantage of this business is that the person can book the item by keeping his further needs in mind and not even paying the entire money in it, but you have to clear your deal till the date of the contract.
There are many exchanges in India, where futures are traded, in which MCX, NCDX, NMCE and RCX are the major commodity futures trading, whereas futures trading of shares is done on BSE and NSE. Let us tell you that there is trade of thousands of crores every day in the futures business.
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