Types of Trading
The trading style can be broadly classified into 2 categories:
The trading style can be broadly classified into 2 categories:
On
the basis of Holding period - Investors/ Traders according to their trading capacity of
their analysis either trade and square off their positions Intraday or take a Delivery
of the stock.
Intraday Trade - When a trader squares off (closes the transaction) his position during the same trading session, it is known as Intraday trading. Here the trader would get an intraday trading limit/ leverage / exposure on his deposited amount.
Delivery
Trade
- A trade where the investor does not square off his trading position intraday
and carries over his trade for the next trading session, is known as Delivery
trading. Normally the client needs to pay full amount of the transaction value
and no leveraging benefit is available here. The brokerage too is more than
that of Intraday.
On
the basis of Trend - Traders can buy or sell the shares and then square off their
positions gradually on the basis of trend they perceive on a stock.
Buy/
Long
- A trader with a bullish (upward movement) view on the stock buys the share
first and then sells. Ex: A trader
is bullish on Reliance Industries trading @ 1000, he buys 200 shares at 10:30
am @ 1000 and then sells 200 shares @ 02:00 pm at 1010 (remember it is not always
that a client can sell his shares on a profit).
Short
Sell
- This is a very unique concept, where a trader sells a share first (without
having that share in his demat account) and then buys it back. The trader has a
bearish view on the stock here. Ex:
A trader is bearish on DLF limited, which is currently trading at 250; he sold 800
shares @ 250 at 10:30 am and bought back 800 shares @225 at around 03:00 pm,
making a profit of Rs 5000.
Here
the trader has to take huge care that he squares off his trading position
before the close of the market.
Modes of Trading
Online Trading -
Brokers have now developed their in-house Online trading software, which allows
the traders to trade from their home, office, travelling etc via a normal computer
and internet connection.
Mobile Trading -
Now traders who have a mobility access and WAP facility can trade online via
their hand held devices like mobile, tablets etc. Every Trading system is
connected to Exchange servers via broker's internal server and Risk Management System.
Exchanges have clearly prescribed for a dual password mechanism which has a
login and a trading password which expires every 14 days.
Offline Trading -
Traders who don’t wish to trade online or cannot operate computers, visit their
broker’s dealing room or calls their broker for trading, where a Dealer punches
orders for them.
Difference b/w Online and
Offline Trading accounts Points of Difference
|
Online
|
Offline
|
Trade execution
|
Self
|
Dealer
|
Trade mode
|
Desktop/ laptop/Mobile
|
Phone/ physical visit
|
Options available
|
Trading, reports, fund transfer etc
|
Only trading
|
Time saving
|
Huge
|
Later order punching
|
.
About DreamGains
DreamGains Financials India Private Limited formed in 2004 as an independent and privately owned company is build upon the principles of teamwork and partnership.It is a trusted name in the financial service arena and provides you with an entire gamut of services under one roof. It today has emerged as a premium Indian stock consultancy, with an absolute focus on business and a commitment to provide “Real value for money” to all its clients.
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