Presented By-Ashwin Mandowara Manvi Upadhyay Nitesh Gupta Priyanka Parte Surbhi Jain

A Journey into Stock
Markets
School of Economics, Davv
Presented ByAshwin Mandowara

Manvi Upadhyay
Nitesh Gupta
Priyanka Parte
Surbhi Jain
1
What to expect?
What is Stock?
How trading happens?
How to trade in stocks?
Kinds of Trades
Basic Terms and terminologies
What is a Stock
Its a means to own a company.

It is a kind of security.
(The definition of Securities as per the Securities
Contracts Regulation Act (SCRA), 1956, includes
instruments such as shares, bonds, scrips, stocks or
other marketable securities of similar nature in or
of any incorporate company or body corporate,
government securities, derivatives of securities,
units of collective investment scheme, interest and
rights in securities, security receipt or any other
instruments so declared by the Central
Government.)
Prerequisites for Trading
We need to have DP(DEPOSITORY

PARTICIPANT) account.
We need to have a Trading account.
And of course money
How Trading Happens?
People using
terminal
provided by their
brokers
Stock Exchange
Ex : NSE,BSE
Which companies one can trade
Ones which are listed in that exchange
IPO
Secondary market
More of IPO later
Kinds of Trading
Intra-day Trading
Delivery based Trading
Intra-Day Trading
Buying and Selling on the same day
Brokerage will be different for intra-day

and delivery based trading, intra-day
being lesser
ExampleVolume 1 lac
Intraday Brokerage 30 rs(Generally .03 pasia of volume)
Delivery Brokerage 300 Rs (Generally .30 pasia of volume)
Delivery Based Trading
Buying and Selling are on different days
Brokerage will be higher than intra-day
Their will be minimum delivery charges
How does it happen
Ex :
You buy the share on 27/11/2015(Today).
It will be delivered to you on
29/11/2015(Day after tomorrow)
settlement period (T + 2) normally.
10
What is short selling?
Selling something which you dont have.

Ex: Lets consider a company RIL.
Its priced at Rs 1000/- before opening.
You know its going to fall that day
because of some
reason. But you dont have any shares
with you of RIL.
But still you can sell the shares, this is
called as short selling.
11
Contd
Assume you sold 10 RIL shares in morning
at
Rs 1000/-. By evening as you had thought,
it had
Fallen down to Rs 900/-. Now you buy back
Those 10 shares what you had sold.
So the difference in amount, 1000 900 =
100
100 * 10 = 1000, is yours. This process of
buying
back is called short covering.
12
What if you dont Short Cover?
You will become a defaulter.
Lets understand this with an Example.

Assume you short sold on Monday, as you
havent short covered it, you need to deliver
it on Wednesday(T + 2). But you dont have
the shares to deliver. So NSE or BSE will buy
the shares on behalf of you in auction
market, and deliver it to the buyer in (T + 3
days). In auction market max price is 10%
higher than in normal market.
13
Question
Assume Ram bought on Monday 100 shares
of
RIL at Rs1000/- , on response to some good
news it rose high on Tuesday to say Rs
1100/-.
So Ram is in a whooping profit of (100 *
100)
Rs 10,000/- in a day.
School ofit.
Economics, Davv
Ram plans to sell
14
DAY
PRICE
Monday
1000
Tuesday
1100
Wednesday 1120
Thursday
1170
Friday
1050
15
Ram actually ended up in

loss!!!
( I was a victim of such a trade when I executed my 2 nd
trade 2 years back )
16
How to select stocks?
Fundamental Analysis
Technical Analysis
17
What is fundamental Analysis?
Analyzing a stock based on the

fundaments of the country, the sector,
and the company individually.
It includes going through balance sheet

and profit-loss statement of the individual
company and checking various ratios.
18
3 Important Ratios
EPS :
shares
PE :
P/BV
value
PAT Dividend/ No of
Present share Price / EPS
Present share price / Book
19
BULL {TEJIWALA}
He is speculator who expects the future raise in price of securities

he buys the securities to sell them at future date at the higher price.
He is called as bull because his activities resembles as a bull , as

the bull tends to throw its victims up in the air through its horns. In
simple the bull speculator tries to raise the price of securities by
placing a big purchase orders.
20
BEAR {MANDIWALA}
He is speculator who expects future fall
in prices , he does an agreement to sell
securities at future date at the present
market rate .
He is called as bear because his

altitude resembles with bear , as the
bear tends to stamp its victims down to
earth through its paws . In simple the
bear speculator forces of prices of
securities to fall through his activities.
21
What is Technical analysis
Forecasting the future direction of prices

through the study of past market data,
primarily price and volume.In its purest
form, technical analysis considers only
the actual price and volume behavior of
the market or instrument.
22
Basic definitions in Technical

analysis
Support : Where one buys
Resistance : Where one sells
Some Examples
23
Technical Analysis
Up Trend-Line
24
25
A Brief into Primary Market
PE Firms
QIP, HNI, Retail
Fixed Price and Book Building Process
Lower band and Upper Band and Cut off

price
Lot size
26
Contd
Face Value
Premium
27
Some tips for primary

market
Please Read IPO document carefully.
Read about the promoter's group.
Understand their business, and compare

them
With the companies listed already in
market
28
Other facts
Market Cap
Dividend
29
Buy Back
Bonus
Split
Record Date (Bonus/Dividend allotment

date)
30
What is an Index
What is NIFTY, SENSEX
How are they Calculated?
31
Some Tips to newbies
Execute couple of paper trades before

you actually execute the real trade, we
have many simulators and games
available now
Always follow strict entry and exit points
Always execute a limit order
Never buy and sell for full amount in one
go,
Spread it across a range, it will give
much better bottoms and tops
Never average
a losing trade
32
Q&A
33
HAPPY TRADING
34

Presented By-Ashwin Mandowara Manvi Upadhyay Nitesh Gupta Priyanka Parte Surbhi Jain

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A Journey into Stock

School of Economics, Davv