Category: Stock Exchange

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  • Traders Union listed best prop trading firms for beginners

    Traders Union listed best prop trading firms for beginners

    Best prop trading firms for beginners; When a pot, company, or other entity trades securities, results, bonds, items, or other financial products on its behalf and uses its funds as opposed to those of its clients, that transaction is known as proprietary dealing. This allows the company to benefit fully from an exchange instead of just taking the commission for handling clients’ businesses with the best prop trading firms.

    Here are the articles to explain, Traders Union listed the best prop trading firms for beginners

    The purpose of this form of dealing is to generate excess profits for banks and other economic entities. Due to the information, they possess about the market, these companies frequently have an advantage over the typical investor. Possessing advanced modeling and dealing software has another benefit.

    To increase profits, professional traders employ several different techniques. Such as volatility arbitrage, index arbitrage, merger arbitrage, and global macro-dealing.

    Profit growth is one advantage of proprietary dealing — remarked Traders Union. Prop dealing allows the company to keep all of the gains, unlike when it acts as a broker and takes commissions. The bank gains the most from the trade as a proprietary trader. 

    A company can supply merchandise of protection for future usage thanks to proprietary dealing, which is another advantage. When a company purchases securities for speculation, it can later sell those assets to customers who also want to purchase them. Additionally, individuals who want to sell stocks short can borrow the securities. 

    Prop dealing enables businesses to swiftly become significant market players.

    FTMO is a managing prop company that runs on the idea of a prop company. A potential trader must pass a two-stage active dealing test to be given money under management. The maximum permissible daily loss, overall loss, and target profit level are specified at each step. Although the terms of the prop business are generally reliable, they might nevertheless be challenging to navigate. The restrictions are 10% of the overall loss, regardless of the testing package selected.

    FTMO economic calendar can help deal, but in this case, it’s crucial to remember the dealing limits at the time of the significant news release.

    Although the test period has tight standards, the seller has a comparatively modest test fee that starts at €155. In contrast, the admission price for completing the test ranges from €400 to €500 in the majority of businesses in this area. The accessibility of common MT4/MT5 platforms is another benefit. While seller uses common platforms, the majority of other prop firms use their own or customized versions. This enables you to use any personalized advisers and indicators that you have previously refined in the MetaTrader tester. Users can use the platform from anywhere using the seller’s well-defined web platform and user-friendly mobile application. Additionally, the client area feature gives you access to all required functions and auxiliary programs.

    Traders Union listed best prop trading firms for beginners Image
    Traders Union listed best prop trading firms for beginners; Image by Csaba Nagy from Pixabay.
  • Traders Union Experts Named The Best Forex Broker

    Traders Union Experts Named The Best Forex Broker

    Choosing the best forex broker is a pretty difficult task. You have to compare dozens of companies and their trading conditions, and there are also many additional characteristics you must consider: commissions and fees, security measures, bonuses, educational programs, and so on.

    Here are the articles to explain, Traders Union Experts Named The Best Forex Broker

    To help you out, the Traders Union team has analyzed the Forex market and found the best option out there for all possible trading strategies and preferences.

    Main characteristics

    To determine a truly versatile and convenient broker, the experts use several crucial criteria. The most important of them is the security level: an unreliable or unregulated broker can’t trust even if it offers attractive conditions. Trading fees and instruments are also important things to consider. Finally, there are additional benefits: bonuses, investment programs, special account types, and so on. Today, good brokers are constantly looking for new ways of attracting users to their trading platforms.

    Best broker

    The experts have compared all the top companies on the market. It seems that IC Markets is currently the best choice. This broker is popular internationally, and it’s regulated by ASIC, a major Australian financial organization. The regulator closely monitors all the transactions, so you can be sure your money won’t disappear. There is also an insurance program for unexpected situations or mistakes, so the broker can consider it very safe and secure.

    The trading conditions are also favorable. There are lots of available instruments: Forex pairs, futures, and an impressive variety of CFDs. The broker knows for quick order execution and tight spreads: a raw spread account can create to access spreads starting from 0.1 pips. The platform supports all kinds of trading strategies: for example, you can use it for scalping or hedging. You can trade right on your mobile device and choose between MT4 and cTrader.

    The minimum deposit is $200, and the leverage reaches 1:500. The 24/5 customer support service is exceptional among other Forex brokers, and there is also an extensive library of educational materials covering the most crucial aspects of Forex and CFD trading. You can use several useful tools like the risk calculator, too. The trading fees are pretty low, and withdrawals are quick and easy. All that makes the broker suitable for traders with any background, experience level, and trading style.

    Traders Union Experts Named The Best Forex Broker Image
    Traders Union Experts Named The Best Forex Broker; Photo by Cedrik Wesche on Unsplash.
  • What is the Best Forex Broker High Leverage?

    What is the Best Forex Broker High Leverage?

    High leverage best forex broker trading permits traders to essentially borrow funds to exchange with better amounts of money. You have the opportunity to change drastically better than you have deposited and therefore earn a much large income; than you will while buying and selling with small quantities. While this offers the elevated possibility for traders, it additionally includes a long way greater hazard.

    Here is the article to explain, How to define the Best Forex Broker with High Leverage?

    For the ones interested in high leverage best forex broker, it’s crucial to don’t forget key factors like account types, minimum deposits, rules, platforms, and buying and selling situations, no longer simply the leverage on provide. Post’s crew of specialists has reviewed a range of brokers in the industry to offer a summary of the quality excessive leverage brokers for buyers within the UK.

    Due to the better hazard involved in better leverage buying and selling, foreign exchange agents in Canada and many other international locations limit the buying and selling leverage. Traders can be a hit in trading with high leverages, imparting you take into account your risks and manipulate them efficaciously. Top 10 of the pleasant best forex leverage brokers for 2022 lists as; 1. FBS, 2. HotForex, 3. OctaFX, 4. JustForex, 5. FXTM, 6. Instaforex, 7. Roboforex, 8. Fibo Group, 9. Alpari, and 10. Grand Capital.

    What does mean Leverage?

    Leverage gives investors the capacity to multiply the consequences of an alternate. Brokers with excessive leverage allow buyers to borrow finances to grow their deposit fees. This stands then used to open large positions than might existed done with an unmarried source of budget. The trader earns all of them take advantage of a leveraged exchange, however, they also expect all of the hazards.

    Who are High Leverage Brokers?

    Brokers with excessive leverage provide the opportunity to profit at a greater fee than a preliminary deposit would generally allow. In this article, we list the pleasant brokers with the best leverage, explain the professionals and cons of buying and selling on margin, as well as the worldwide regulations in location. Forex buying and selling exist known for their leveraged buying and selling; which allows buyers to use the leverage strategy or “borrowed” capital; as its investment source and function larger quantity and trade currency pairs through an to begin with a small balance.

    The leverage method expands the trading base and multiplying the preliminary trading account balance a certain range of instances relying on the leverage degree, in going back leverage results in probably bigger returns, but magnifies higher risks of losses as properly. Leverage tiers exist typically expressed as a ratio, which means that the dealer has to have at the least a specific percent of the overall available extent (e.g. Leverage 1:100 to 1:500 calls for 1% of extent).

    Leveraged Trading Example;

    Let’s say a patron begins with a $1,000 deposit and their dealer offers 20x leverage (1:20), the trader can execute positions up to a fee of $20,000. So, if they purchase $20,000 worth of gold and the price of gold rises by means of 10%, they earn $2,000 in income ($20,000 * 1.1 = $22,000). But if they had purchased $1,000 well worth of gold without leverage and the fee increased by 10%, their profit would be dollar one hundred ($1,000 * 1.1 = $1,100).

    • The present-day maximum leverage for regulated trading stands diminished via various reputable governments together with the United States-regulated forex agents leverage of 1:50, European agents beneath ESMA allowed the use of most effective 1:30, additionally currently Australia reduced leverage to 1:30.
    • Since most people of groups use low leverage ratios because of policies and excessive dangers, to get admission to rely on excessive leverage supplying traders can both pick a swiss forex dealer, come to be an expert dealer, select a dealer from a jurisdiction with excessive leverage, or change with the reputable broking with legit regulation however an open account with its global entity.
    • It is only a preference of a dealer below which entity to trade or to pick a scam dealer with high leverage 1:1000 or alike, but, and both use Brokers with high leverage ratios or not, but, You must learn about involved excessive dangers in Forex buying and selling due to leverage.

    The difference between Retail Leverage and Professional Leverage;

    The restrictions listed above are handiest relevant to retail buyers. The maximum leverage quotes are available to specialists. Brokers with this account kind will vicinity stringent necessities on investors; who have to prove they have the budget and revel in to operate with the expanded hazard. But for people who do meet the threshold, a leveraged investing approach can result in better earnings margins.

    Pros or Advantages of Brokers With High Leverage;

    Selecting a broking with excessive leverage opportunities method that investors have access to a couple of blessings:

    1. Increased role size; Larger positions mean you could increase income past what your deposit quantity might usually allow. This lets in for more marketplace exposure and probably large income.
    2. Opportunity to diversity portfolios; Larger positions on an unmarried alternate approach deposit capital that isn’t applied can exist used someplace else to diversify a portfolio; for example, trading on foreign exchange as well as shares, commodities, and cryptocurrencies.
    3. Margin modifications; Even if you open an account with a broking that offers high leverage; you could typically manually modify the price have you desire to lower your chance exposure. Customer support teams also can frequently help trade your leverage.

    Cons or Disadvantages of Brokers With High Leverage;

    There exist restrained downsides to choosing the best forex broker with high leverage. Margin buying and selling are usually non-obligatory, so even in case your broker provides the provider; you don’t have to make use of it if it doesn’t shape your strategy. With that stated, the subsequent factors ought to consider whilst buying and selling with excessive leverage:

    1. Increased danger; While profits are multiplied, so too are losses. Therefore, traders have to be organized to lose their entire deposit quantity plus extra capital; if they do not have terrible balance safety.
    2. Less appropriate for beginners; Beginners may additionally favor starting investing without leverage to benefit self-assurance in their strategy before executing better-danger trades.

    Conclusion;

    Final Word On Best Forex Broker With High Leverage; In this newsletter, we’ve defined what leverage is and the way it can be used to benefit your approach. Our listing of the nice brokers with excessive leverage possibilities is a tremendous location to get began. Beginners may additionally want to recollect commencing a demo account earlier; than putting real positions considering that leveraged buying and selling may be risky. However, for the ones who can prepare to make money at a quicker tempo; than their modern deposit permits, margin buying and selling can be a huge benefit

    What is the Best Forex Broker High Leverage Image
    What is the Best Forex Broker High Leverage? Image by TheInvestorPost from Pixabay.
  • Stock Trading: How to trade for profits in the stock market?

    Stock Trading: How to trade for profits in the stock market?

    Stock Trading – How to trade for profits in the stock market? In the complex jargon of trading terminology, not everybody who buys and sells stocks is a stock trader. Top stock trading platforms in the UK, USA, India, and others; Many people fall into one of two categories based on how much they purchase and sell stocks: traders or buyers.

    Here is the article to explain, What is Stock Trading? with understand How to trade for profits in the stock market?

    The trader portrays as a frantic Wall Streeter, glued to computers and flashing tickers, buying and selling all day. On the other hand, investors usually buy at regular intervals and sell even less regularly, at least before retirement.

    Stock trading isn’t necessarily what you see on the New York or London Stock Exchange floor. You can start from your own house. But before you make your first trade, you should know what you’re doing.

    What exactly is stock trading?

    Stock traders purchase and sell securities and stocks to profit from regular market swings. Instead of buying shares in a firm to keep for years or even decades, these short-term traders gamble that they will earn a million dollars in the next month, day, minute, or second.

    Stock trading is classified into two types:

    Day Trading.

    Day trading is a technique used by capitalists who deal with stocks on daily basis. Purchasing, selling, and closing positions in the same stock in a single trading day, with no regard for the underlying firms.

    Position applies to how much of a certain portfolio or fund you own. The aim of a day trader is to profit from frequent market changes over the next few days, hours, or minutes.

    Active Trading.

    A trader who makes 10 or more trades a month considers being an active trader. Typically, they use a tactic that strongly depends on market positioning, attempting to benefit from short-term developments at the business level or depending on market fluctuations in the coming weeks or months.

    Trading Stocks – How, Why, and When?

    If you’re new to stock trading, bear in mind that most investors benefit from keeping it straightforward and investing in a diversified blend of low-cost index funds to generate.

    Here is all you should know about stock trading.

    Get an account for brokerage.

    Stock trading necessitates the financing of a brokerage account, which is a form of account intended to deposit funds. If you don’t already have an account, you can open one in a matter of minutes with an online broker. But don’t worry, just because you’ve opened an account doesn’t mean you’ve started saving. It simply gives you the choice to do so when you are ready.

    Define a budget for trading.

    Even if you develop a knack for stock investing, allocating more than 10% of your portfolio to individual securities will subject your savings to excessive volatility. However, this is not the only rule for risk management.

    You should also consider investing just what you can stand to lose. Reduce the 10% if you don’t even have a balanced emergency fund and 10% to 20% of your money going into a retirement savings plan.

    Understand how to use trading orders.

    If you’ve established your brokerage account and budget, you can position stock orders through your online broker’s website or trading network. You’ll give multiple order form choices, which will determine how your trade process. These are the two most popular types of orders you can make:

    • Limit order; Buys or sells the stock only at or above a predetermined amount. The cap price for a buy order is the most you’re able to pay, and the order will execute only if the stock price falls to or below that value.
    • Market order; Buys or sells a stock as soon as possible at the best available price. That is why it names as a market order.
    Use virtual account to learn trading.

    Nothing is better than a free practice account, which investors can obtain by the virtual trading platforms provided by many online stock brokers. Paper trading allows consumers to practice their trading skills and develop a track record before putting actual money on the line.

    Digital trading is available at some of the brokers we check, including TD Ameritrade and Interactive Brokers.

    Compare the results to an acceptable benchmark.

    This is critical guidance for all buyers, not just committed ones. The ultimate aim of stock selection is to outperform a benchmark index. This may be the Nasdaq composite index, the Standard and Poor’s 500 index, or other smaller indices comprised of companies dependent on industry, size, and geography.

    Use online tools and technology available widely on the internet. For example, you can use a sigma notation calculator – used for summation – to sum up, all of your profits term-wise.

    Measuring returns is critical because if a serious investor is unable to outperform the benchmark which is something even experienced investors struggle with, it makes financial sense to invest in a low-cost index mutual fund or ETF. ETF is effectively a portfolio of stocks whose output strongly resembles that of one of the benchmark indices.

    Don’t lose your vision.

    Being a good investor does not necessitate being the first to identify the next great breakout stock. Thousands of seasoned traders have already heard that ABC supply is primed for a surge by the time you hear it, and the opportunity has most definitely been priced into the stock.

    It might be too late to turn a fast profit, but that doesn’t mean you’re too late to the game. True great investments aim to have shareholder wealth for years, which is a compelling reason for treating aggressive investing as a passion rather than a last-ditch effort for fast riches.

    Summing Up

    Stock trading looks like child’s play from outside but it requires a lot of knowledge and practice for a beginner to perform well. Most of the people start practicing and leave it underway because of the lack of consistency and patience.

    Every great achievement needs hard work and patience. So, if you are thinking about getting yourself into stock trading, or have already started it, don’t lose patience. One day, you will get the outcome you were always expecting.

    Stock Trading - How to trade for profits in the Stock Market Image
    Stock Trading: How to trade for profits in the Stock Market? Image by Mohamed Hassan from Pixabay.

  • What is OTCEI (Over The Counter Exchange of India)?

    Learn and Study, What is OTCEI (Over The Counter Exchange of India)?

    Over the Counter Exchange of India (OTCEI) was incorporated in October 1990 under Section 25 of the Companies Act, 1956 with the objective of setting up a national, ring-less, screen-based, automated stock exchange. It is recognized as a stock exchange under Section 4 of the Securities Contracts (Regulations) Act, 1956. It was set up to provide investors with a convenient, efficient and transparent platform for dealing in shares and stocks; and to help enterprising promoters set up new projects or expand. Also learned, ISE, NSE, SEBI, What is OTCEI (Over The Counter Exchange of India)?

    Their activities, by providing them an opportunity to raise capital from the capital market in a cost-effective manner. Trading in securities takes place through OTCEI’s network of members and dealers spanning the length and breadth of India.

    Over The Counter Exchange of India was promoted by a consortium of financial institutions including:

    • Unit Trust of India.
    • Industrial Credit and Investment Corporation of India.
    • Industrial Development Bank of India.
    • Industrial Finance Corporation of India.
    • Life Insurance Corporation of India.
    • General Insurance Corporation and its subsidiaries.
    • SBI Capital Markets Limited.
    • Canbank Financial Services Ltd.

    The Over the Counter Exchange of India is based on the model of the national association of securities dealers’ automated quotation (NASDAQ) of USA, with modifications to suit the Indian conditions. The OTCEI arose out of the need to have a second tire market in the country. It was set up to provide small and medium companies an access to the capital market for raising finance in a cost-effective manner and investors with a convenient, transparent and efficient avenue for capital market investment.

    The OTCEI was the first ring less, electronic and national exchange with a screen-based trading system listing an entirely new set of companies of small size. It allowed companies with paid-up capital as low as 30 lacs to get listed, It brought the screen-based trading system in vogue for the first time; this was quite different from the open outcry system at BSE.

    Moreover, each strip listed on the exchange had at least two market makers who continuously gave two way quotes. Market makers are merchant bankers willing to make a market in securities by continuously offering to buy and sell quotes. They act as a dealer cum stockiest and do not charge any commission or brokerage. Their profit margin is the spread between the bid and offer prices.

    A voluntary market maker can be appointed for a period of six months. Market making is a unique concept of OTCEI. The other player on OTCEI is the custodian or registrar a safe keeper of share certificates. The OTCEI provides a liquid cash market for retail investors with a T+3 rolling settlement systems and no problem of bad of short deliveries.

    Salient Features of Over the Counter Exchange of India:

    1. Ring-less and Screen-based Trading: The over the Counter Exchange of India was the first stock exchange to introduce automated, screen-based trading in place of the conventional trading ring found in other stock exchanges. The network of on-line computers provides all relevant information to the market participants on their computer screens. This allows them the luxury of executing their deals in the comfort of their own offices.
    2. Sponsorship: All the companies seeking the listing on Over the Counter Exchange of India have to approach one of the members of the OTCEI for acting as the sponsor to the issue. The sponsor makes a thorough appraisal of the project; as by entering into the sponsorship agreement, the sponsor is committed to making the market in that scrip (giving a buy sell quote) for a minimum period of 18 months, sponsorship ensures quality of the companies and enhance liquidity for the scrip’s listed on OTCEI.
    3. Transparency of Transactions: The investor can view the quotations on the computer screen at the dealer’s office before placing the order. The OTCEI system ensures that trades are done at the best prevailing quotation in the market. The confirmation slip/trading document generated by the computers gives the exact price at which the deals has been done and the brokerage charged.
    4. Liquidity through Market Making: The sponsor-member is required to give two-way quotes (buy and sell) for the scrip for 18 months from the commencement of trading. Besides the compulsory market maker, there is an additional market maker giving two way quotes for the scrip. The idea is to create an environment of competition among market makers to produce efficient pricing and narrow spreads between buy and sell quotations.
    5. Listing of Small and Medium-sized Companies: Many small and medium-sized companies were not able to enter the capital market due to the listing requirement of Securities Contracts (Regulation) Act, 1956 regarding the minimum issued equity of Rs.10 crores in case of the Mumbai stock Exchange and Rs.3 crores in case of other stock exchanges. The OTCEI provides an opportunity to these companies to enter the capital market as companies with issued capital of Rs.30 lacks onwards can raise finance from the capital market through OTCEI.
    6. Technology: Over The Counter Exchange of India uses computers and telecommunications to bring members/dealers together electronically, enabling them to trade with one another over the computer rather than on a trading floor in a single location.
    7. Nation-wide Listing: Over the Counter Exchange of India network is spread all over India through members, dealers and representative office counters. The company and its securities get nation-wide exposure and investors all over India can start trading in that scrip.
    8. Bought-out Deals: Through the concept of a bought-out deal, OTCEI allows companies to place its equity with the sponsor-member at a mutually agreed price. This ensures swifter availability of funds to companies for timely completion of projects and a listed status at a later date.

    Benefits of getting OTCEI Listing for Companies:

    The Over the Counter Exchange of India offers facilities to the companies having a issued equity capital of more than Rs. 30 lakhs.

    The benefits of listing at the Over the Counter Exchange of India are:

    • Small and medium closely-held companies can go public.
    • The OTCEI encourages entrepreneurship.
    • Companies can get the money before the issue in cases of Bought-out-deals.
    • It is more cost-effective to come with an issue of OTCEI.
    • Small companies can get listing benefits.
    • Easy issue marketing by using the nation-wide OTCEI dealer network.
    • Nation-wide trading by listing at just one exchange.

    Benefits of Trading on OTCEI for Investors:

    • The OTCEI trading counters are easily accessible by any investors.
    • The OTCEI provides greater confidence to investors because of complete transparency in deals.
    • At the OTCEl, the transactions are fast and are completed quickly.
    • The OTCEI ensures security, liquidity by offering two-way quotes.
    • The OTCEI is an investor friendly exchange with Single Window Clearance for all investor requests.

    The OTC Exchange Of India (OTCEI), also known as the Over-the-Counter Exchange of India, is based in Mumbai, Maharashtra. It is India’s first exchange for small companies, as well as the first screen-based nationwide stock exchange in India. OTCEI was set up to access high-technology enterprising promoters in raising finance for new product development in a cost-effective manner and to provide a transparent and efficient trading system to investors.

    OTCEI is promoted by the Unit Trust of India, the Industrial Credit and Investment Corporation of India, the Industrial Development Bank of India, the Industrial Finance Corporation of India, and other institutions, and is a recognised stock exchange under the SCR Act.

    The OTC Exchange Of India was founded in 1990[3] under the Companies Act 1956 and was recognized by the Securities Contracts Regulation Act, 1956 as a stock exchange. The OTCEI is no longer a functional exchange as the same has been de-recognised by SEBI vide its order dated 31 Mar 2015.

  • What is ISE (Inter-Connected Stock Exchange)?

    Learn, What is ISE (Inter-Connected Stock Exchange)?

    The formation of NSE changed the way in which the stock exchanges were functioning. Modern infrastructure, technology, transparency and corporate governance are now becoming the features in the corporate the world. It also forced BSE to adopt the new technology and with this, NSE and BSE crossed boundaries and started functioning, operating throughout India. This affected the functioning of small and regional exchanges. This led to the birth of the Inter-connected Stock Exchange of India Ltd. (ISE). Federation of Indian stock exchanges, in a meeting held in 1996, constituted a steering committee to evolve an interconnected market system. Also learned, NSE, SEBI, What is ISE (Inter-Connected Stock Exchange)?

    In 1997, the market governing the body of India, Securities and Exchange Board of India (SEBI) granted approval to the proposal of the ISE to set up a national level stock exchange promoted by 14 regional stock exchanges.  ISE was launched with an objective of converting small, fragmented and illiquid markets into a large, efficient and liquid market. Inter-Connected Stock Exchange (ISE) has set up an Inter-connected Market System (ICMS) which provides its trading members a facility to trade on the national market in addition to the trading facility at the regional stock exchanges. The trading members of the ISE, who are already the members of the 14 stock exchanges (which are the constituents of the ISE), satisfy the capital adequacy requirements of the ISE separately and in addition to the capital adequacy requirements of the regional stock exchange.

    The ISE has set up a separate clearinghouse for settlement of the trades at the national market. The ISE has also made arrangement to appoint a clearing bank for online transfer of funds from regional centers to the national center. The ISE has an adequate risk management system for safety, integrity of the market and also to protect the interest of the investors. The participating exchanges of ISE have about 4,500 members and a large number of listed securities. It is a stock exchange of stock exchanges, members of the stock exchanges being traders on the ISE. The ISE has provided a highly automated trading system to the traders of the participating regional stock exchanges with direct access to the national level trading platform on an equal footing regardless of the location of the particular stock exchanges.

    Important Features of Inter-Connected Stock Exchange of India

    There are some of the features which make ISE a new age stock exchange are as follows:

    • ISE is a national level recognized stock exchange having moderate listing fees and granting listing and trading permission to small and medium-sized companies having a post public issue paid-up capital of Rs. 3 crore to Rs. 5 crores (subject to the appointment of market makers), besides companies with a capital of above Rs. 5 crores.
    • All traders and dealers of ISE have access to NSE through ISE securities and Services Ltd. (ISS), which ensures the continuous attention of investors.
    • ICSE has set up an ‘Investor Grievance and Service Cell’ which looks after all types of complaints of investors located across the country and provides decentralized support.
    • Listing of stocks with ISE would give the company an advantage of being identified as a technology-savvy and investor-friendly company.

    Inter-connected Stock Exchange Ltd. (ISE) is an Indian national-level stock exchange, providing trading, clearing, settlement, risk management and surveillance support to its trading members. It started its operation in 1998 in Vashi, Mumbai, and has 841 trading members, who are located in 18 cities. These intermediaries are administratively supported through the regional offices at Delhi, Kolkata, Patna, Ahmedabad, Coimbatore, and Nagpur, besides Mumbai.

    The ISE is promoted by 12 regional stock exchanges namely at Bangalore, Bhubaneshwar, Chennai, Kochi, Coimbatore, Guwahati, Indore, Jaipur, Kanpur, Mangalore, Magadh, and Vadodara. The participating exchanges of ISE have 4,500 members and listed securities. It is a stock exchange of stock exchanges, members of the stock exchanges being traders on the ISE.

  • Explain, What is SEBI (Securities and Exchange Board of India)?

    Explain, What is SEBI (Securities and Exchange Board of India)?

    Securities and Exchange Board of India (SEBI) is the nodal agency to regulate the capital market and other related issues in India. It was established in 1988 as an administrative body and was given statutory recognition in January 1992 under the SEBI Act 1992 which came into force on January 30. The Act charged the SEBI, the first national regulatory body in India with comprehensive statutory powers over practically all aspects of capital market operations, “to protect the interests of the investors and to promote the development of, and to regulate the securities markets by such measures as it thinks fit.” Also learned, NSE, Explain, What is SEBI (Securities and Exchange Board of India)?

    Learn, Explain, What is SEBI (Securities and Exchange Board of India)?

    Explain What is SEBI (Securities and Exchange Board of India) - ilearnlot

    SEBI has been vested most of the functions and powers under the Securities Contract Regulation (SCR) Act, which brought stock exchanges, their members, as well as contracts in securities which could be traded under the regulations of the Ministry of Finance. It has also been delegated certain powers under the Companies Act.

    In addition to registering and regulating intermediaries, service providers, mutual funds, collective investment schemes, venture capital funds and takeovers, SEBI is also vested with the power to issue directives to any person(s) related to the securities market or to companies in areas of issue of capital, transfer of securities and disclosures. It also has powers to inspect books and records, suspend registered entities and cancel the registration.

    Before the establishment of Securities and Exchange Board of India (SEBI), the principal legislation governing the securities market in India was the capital issues control act 1956 and the securities contract act 1956. The regulatory powers were vested with the controller of capital issues for the primary market and the stock exchange division for the secondary market in the Ministry of Finance, Government of India.

    SEBI has been constituted on the lines of Securities and Exchange Commission of USA. SEBI is consisting of the Chairman and 8 Members (one member representing the Reserve Bank of India, two members from the officials of Central Government and five other public representatives to be appointed by the Central Government from different fields). SEBI has been playing an active role in the Indian Capital Market to achieve the objectives enshrined in the SEBI Act, 1992.

    The major objective of the Securities and Exchange Board of India (SEBI) may be summarized as follows:
    • To provide a degree of protection to the investors and safeguard their rights and to ensure that there is a steady flow of funds in the market.
    • To promote fair dealings by the issuer of securities and ensure a market where they can raise funds at a relatively low cost.
    • To regulate and develop a code of conduct for the financial intermediaries and to make them competitive and professional.
    • To provide for the matters connecting with or incidental to the above.
    Section 11 of the SEBI Act deals with the powers and functions of the SEBI as follows:

    It shall be the duty of Board to protect the interests of the investors in securities and to promote the development of and to regulate the securities market by measures as deemed fit.

    To achieve the above, the Board may undertake the following measures:
    • Regulating the business in stock exchanges;
    • Registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, merchant bankers, underwriters, portfolio managers;
    • Registering and regulating the working of the depositories, participants, credit rating agencies;
    • Registering and regulating the working of venture capital funds and collective investment schemes, including mutual funds;
    • Prohibiting fraudulent and unfair trade practices relating to securities markets;
    • Promoting investors education and training of intermediaries of securities markets;
    • Prohibiting insider trading in securities;
    • Regulating substantial acquisition of shares and take-over of companies; and
    • Calling for information from undertaking, inspection, concluding inquiries and audits of the stock exchanges, mutual funds, other persons associated with the securities market intermediaries and self-regulatory organizations in the securities market.

    In order to attain these objectives, SEBI has issued Guidelines, Rules, and Regulations from time to time. The most important of these is the “SEBI (Disclosure and Investor Protection) Guidelines,2000”. The provisions of these Guidelines,2000 are aimed to protect the interest of the investors in securities.

    The Guidelines, 2000 deals with the following areas :
    • Eligibility norms for companies issuing securities,
    • Pricing of securities by companies,
    • Promoters contribution and lock-in requirements,
    • Pre-issue obligations of the merchant bankers,
    • Contents of the prospectus/abridged prospectus letter of offer,
    • Post issue obligation, of merchant bankers,
    • Green shoe option,
    • Guidelines on advertisements,
    • Guidelines for issue of debt instruments,
    • Guidelines for the book building process,
    • Guidelines on public offer through the stock exchange on-Line system,
    • Guidelines for issue of capital by financial institutions,
    • Guidelines for preferential issues of securities,
    • Guidelines for bonus issues,
    • Other operational and miscellaneous matters.

    In order to regulate and control and to provide a code of conduct for the merchant bankers, other participants of the capital market, and other matters relating to the trading of securities, Securities, and Exchange Board of India (SEBI) has issued several Rules and Regulations.

    These are related to Bankers to the issues, Buyback of securities, Collective Investments Schemes, Delisting of securities, Depositors, Derivatives, Employee stock options, Foreign Institutional Investors(FII’s), Insider Trading, Lead Manager, Market Makers, Merchant Bankers, Mutual Funds, Ombudsman, Portfolio Manager, Registrars and Share Transfer Agents, Securities Lending Scheme, Sweat Equity, Stock Brokers and sub-brokers, Takeover Regulations, Transfer of Shares, Underwriters, Unfair Trade Practices, venture capital Funds, Annual Reports, etc.

  • Explain, What is NSE (National Stock Exchange)?

    Explain, What is NSE (National Stock Exchange)?

    Learn, Explain, What is NSE (National Stock Exchange)?

    The National Stock Exchange of India Limited (NSE) was set up by leading institutions to provide a modern, fully automated screen-based trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices, and procedures. Also learned, Corporate Planning, Explain, What is NSE (National Stock Exchange)?

    Explain What is NSE (National Stock Exchange) - ilearnlot
    Image: #NSE (National Stock Exchange).

    The National Stock Exchange of India Limited has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices, and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualization of stock exchange governance, screen-based trading, compression of settlement cycles, dematerialization and electronic transfer of securities, securities lending and borrowing, professionalization of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology.

    The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.

    The National Stock Exchange of India Limited’s mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the following objectives:
    • Establishing a nation-wide trading facility for equities, debt instruments, and hybrids,
    • Ensuring equal access to investors all over the country through an appropriate communication network,
    • Providing a fair, efficient and transparent securities market to investors using electronic trading systems,
    • Enabling shorter settlement cycles and book-entry settlements systems, and
    • Meeting the current international standards of securities markets.

    The standards set by The National Stock Exchange of India Limited in terms of market practices and technologies have become industry benchmarks and are being emulated by other market participants. NSE is more than a mere market facilitator. It’s that force which is guiding the industry towards new horizons and greater opportunities.

    Till the advent of The National Stock Exchange of India Limited, an investor wanting to transact in a security not traded on the nearest exchange had to route orders through a series of correspondent brokers to the appropriate exchange. This resulted in a great deal of uncertainty and high transaction costs. One of the objectives of NSE was to provide a nationwide trading facility and to enable investors spread all over the country to have an equal access to NSE.

    NSE has made it possible for an investor to access the same market and order book, irrespective of location, at the same price and at the same cost. NSE uses sophisticated telecommunication technology through which members can trade remotely from their offices located in any part of the country. NSE trading terminals are present in 363 cities and towns all over India.

    The National Stock Exchange of India Limited has been promoted by leading financial institutions, banks, insurance companies and other financial intermediaries NSE is one of the first demutualized stock exchanges in the country, where the ownership and management of the Exchange is completely divorced from the right to trade on it. Though the impetus for its establishment came from policymakers in the country, it has been set up as a public limited company, owned by the leading institutional investors in the country.

    From day one, NSE has adopted the form of a demutualized exchange – the ownership, management, and trading is in the hands of three different sets of people. NSE is owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries and is managed by professionals, who do not directly or indirectly trade on the Exchange. This has completely eliminated any conflict of interest and helped NSE in aggressively pursuing policies and practices within a public interest framework.

    The NSE model, however, does not preclude, but in fact accommodates involvement, support, and contribution of trading members in a variety of ways. Its Board comprises of senior executives from promoter institutions, eminent professionals in the fields of law, economics, accountancy, finance, taxation, etc, public representatives, nominees of SEBI and one full-time executive of the Exchange.

    While the Board deals with broad policy issues, decisions relating to market operations are delegated by the Board to various committees constituted by it. Such committees include representatives from trading members, professionals, the public and the management. The day-to-day management of the Exchange is delegated to the Managing Director who is supported by a team of professional staff.

    The National Stock Exchange replaced open outcry system, i.e. floor trading with the screen based automated system. Earlier, the price information can be accessed only by few people but now information can be seen by the people even in a remote location. The paper-based settlement system was replaced by electronic screen-based system and settlement of trade transactions was done on time. NSE also created National Securities Depository Limited (NSDL) which permitted investors to hold and manage their shares and bonds electronically through a demat account.

    An investor can hold and trade in even one share. Now, the physical handling of securities eliminated so the chances of damage or misplacing of securities reduced to the minimum and to hold the equities become more convenient. The National Security Depository Limited’s electronically security handling, convenience, transparency, low transaction prices and efficiency in trade which is affected by NSE, has enhanced the reach of Indian stock market to domestic as well as international investors.

    #Promoters of National Stock Exchange of India (NSE):

    Following financial institutions were the promoters of National Stock Exchange :

    • Industrial Development Bank of India(IDBI).
    • Industrial Finance Corporation of India(IFCI).
    • Industrial Credit and Investment Corporation of India(ICICI).
    • Life Insurance Corporation of India(LIC).
    • General Insurance Corporation of India(GIC).
    • SBI Capital Markets Limited.
    • Stock Holding Corporation of India Limited.
    • Infrastructure Leasing and Financial Services Limited.

    #Market Segments of National Stock Exchange of India (NSE):

    The National Stock Exchange of India Limited was intended to establish a viable and vibrant debt market which was in an underdeveloped stage. Now, it provides the traditional retail market for securities and also operates a Wholesale Debt Market (which may be termed as money market segment).

    The NSE consists of three mutually exclusive segments :

    1. Wholesale debt market segment, started operations in June 1994.
    2. The capital market segment started operations in November 1994, and
    3. Derivatives (Futures and Options) Trading, started operations in June 2000.

    The Wholesale Debt Market segment of The National Stock Exchange of India Limited is a facility for institutions including subsidiaries of banks engaged in financial services and corporate bodies including companies to enter into high value transactions in instruments such as Public Sector Undertakings (PSUs) bonds, Treasury Bills (T-BilIs), Governments Securities, Units of UTI, Commercial Papers (CPs), Certificate of Deposits (CDs), Floating yields bonds, etc. Members of the Wholesale Debt Market segment can trade on their own behalf and on behalf of their clients. NSE trading system facilitates making two ways quotes in a highly flexible manner.

    The Capital Market segment covers trading in equities and retail trade in the convertible or non-convertible debentures and hybrids. This particular segment comprises the securities of medium and large companies with nation-wide investors base. These will also include securities which are being traded on their stock exchanges. By virtue of equal access nationwide, such securities can be traded at the same price from any part of the country. This provides good trading and investment opportunities, increases the volume of the trade and increases the liquidity considerably.

    Besides the capital market segment, The National Stock Exchange of India Limited also provides the opportunity to the investors to deal in the derivative products, i.e., futures and options. At present, NSE provides facility to trade in Nifty Futures, Nifty Options, Individual Stock Options and Individual Stock Futures.

  • What is the Process of Investment? Explains

    What is the Process of Investment? Explains

    The process of Investment: An organized view of the investment process involves analyzing the basic nature of investment decisions and organizing the activities in the decision process. This process creates a strong yet flexible framework for our investment professionals to work together, sharing ideas and challenging each other’s views. It is constantly evolving and we continue to invest in the resources required to ensure it remains robust. Investment managers participate in our Investment process, from company visits and internal discussions to analyzing external broker research and assessing investment themes. The process informs their decisions but your requirements remain paramount. So, the question is – What is the Process of Investment? Explains.

    The Concept is to Explain the Process of Investment.

    The investment process governs by the two important facets of investment they are the risk and return. Therefore, we first consider these two basic parameters that are of critical importance to all investors and the trade-off that exists between expected return and risk.

    Given the foundation for making investment decisions the trade-off between expected return and risk- we next consider the decision process in investments as it is typically practiced today. Although numerous separate decisions must be made, for organizational purposes, this decision process has traditionally been divided into a two-step process: security analysis and portfolio management. Security analysis involves the valuation of securities, whereas portfolio management involves the management of an investor’s investment selections as a portfolio (package of assets), with its unique characteristics.

    Security Analysis:

    Traditional investment analysis, when applied to securities, emphasizes the projection of prices and dividends. That is, the potential price of a firm’s common stock and the future dividend stream are forecasted, then discounted back to the present. This intrinsic value is then compared with the security’s current market price. If the current market price is below the intrinsic value, a purchase recommendation, and if vice versa is the case sale recommend.

    Although modern security analysis is deeply rooted in the fundamental concepts just outlined, the emphasis has shifted. The more modern approach to common stock analysis emphasizes return and risk estimates rather than mere price and dividend estimates.

    Portfolio Management:

    Portfolios are combinations of assets. In this text, portfolios consist of collections of securities. Traditional portfolio planning emphasizes the character and the risk-bearing capacity of the investor. For example, a young, aggressive, single adult would advise buying stocks in newer, dynamic, rapidly growing firms. A retired widow would advise purchasing stocks and bonds in old-line, established, stable firms, such as utilities.

    Modern portfolio theory suggests that the traditional approach to portfolio analysis, selection, and management may yield less than optimum results. Hence a more scientific approach needs, based on estimates of risk and return of the portfolio and the attitudes of the investor toward a risk-return trade-off stemming from the analysis of the individual securities.

    Characteristics of Investment:

    The characteristics of investment can understand in terms of as:-

    • Return,
    • Risk,
    • Safety,
    • Liquidity etc. 

    Now, explain;

    Return:

    All investments characterize by the expectation of a return. Investments are made with the primary objective of driving return. The expectation of a return may be from income (yield) as well as through capital appreciation. Capital appreciation is the difference between the sale price and the purchase price. The expectation of return from an investment depends on the nature of the investment, maturity period, market demand and so on.

    Risk:

    The risk is inherent in any investment, the risk may relate to the loss of capital, delay in repayment of capital, nonpayment of return or variability of returns. The risk of an investment is determined by the investments, maturity period, repayment capacity, nature of return commitment and so on.

    Risk and expected return of investment are related. Theoretically, the higher the risk, the higher the expected return. The higher return is compensation expected by investors for their willingness to bear a higher risk.

    Safety:

    The safety of investment identifies with the certainty of the return of capital without loss of time or money. Safety is another feature that an investor desires from investments. Also, Every investor expects to get back the initial capital on maturity without loss and delay.

    Liquidity:

    An investment that is easily scalable without loss of money or time says to be liquid. A well-developed secondary market for security increases the liquidity of the investment. An investor tends to prefer maximization of expected return, minimization of risk, the safety of funds and liquidity of the investment.

    Investment categories:

    Investment generally involves a commitment of funds in two types of assets:

    • Real assets
    • Financial assets
    Real assets:

    Real assets are tangible material things like building, automobiles, land, gold, etc.

    Financial assets:

    Financial assets are a piece of paper representing an indirect claim to real assets held by someone else. These pieces of paper represent debt or equity commitment in the form of IOUs or stock certificates. Also, investments in financial assets consist of – Securities (i.e. security forms of) investment Non-securities investment.

    The term ‘securities’ used in the broadest sense, consists of those papers which quote and are transferable.

    Under section 2 (h) of the Securities Contract (Regulation) Act, 1956 (SCRA) ‘securities’ include:

    Shares., scrip’s, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or another body corporate. Government securities. Such other instruments may declare by the central Government as securities, and, iv) Rights of interests in securities.

    Therefore, in the above context, security forms of investments include Equity shares, preference shares, debentures, government bonds, Units of UTI and other Mutual Funds, and equity shares and bonds of Public Sector Undertakings (PSUs). Non-security forms of investments include all those investments, which are not quoted in any stock market and are not freely marketable. viz., bank deposits, corporate deposits, post office deposits, National Savings and other small savings certificates and schemes, provident funds, and insurance policies.

    Another popular investment in physical assets such as Gold, Silver, Diamonds, Real estate, Antiques, etc. Indian investors have always considered the physical assets to be very attractive investments. Also, there are a large number of investment avenues for savers in India.

    Some of them are marketable and liquid, while others are non-marketable, Some of them are highly risky while some others are almost risking less. The investor has to choose proper avenues from among them, depending on his specific need, risk preference, and return expectation. Learning is best things, How to Earn a Profit process of investment?

    Investment avenues can be broadly categorized under the following heads:

    1. Corporate securities: Equity shares, Preference shares, Debentures/Bonds, GDRs /ADRs, Warrants, and Derivatives.
    2. Deposits in banks and non-banking companies.
    3. Post office deposits and certificates.
    4. Life insurance policies.
    5. Provident fund schemes.
    6. Government and semi-government securities.
    7. Mutual fund schemes, and.
    8. Real assets

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    What is the Process of Investment Explains
    What is the Process of Investment? Explains, Image credit from #Pixabay.