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Stock Exchange Easy Way to Earn Money

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Title: Stock Exchange Easy Way to Earn Money


1
STOCK EXCHANGE
  • EASY WAY TO EARN MONEY,

2
WHAT IS STOCK EXCHANGE?
  • Definition of Stock Exchange The
    securities regulation act of 1956 defined stock
    exchange as an association , organization , or a
    individual which is established for for the
    purpose of assisting , regulating , and
    controlling business in buying ,selling and
    dealing in securities.
  • Meaning This comes under treasury
    sector ,which provides service to stock brokers
    traders to trade stocks ,bonds and securities.
    Stock exchanges helps the companies to raise
    their fund. Therefore the companies needs to
    list themselves in the Stock Exchange and the
    shares will be issued which is known as equity or
    a ordinary share and these shareholders are the
    real owners of the company the Board Of Directors
    of the Company are elected out of these Equity
    Shareholders only.

3
FEATURES OF STOCK EXCHANGE
  • It is an organized market
  • It is a securities market
  • It is an important constituent of capital market
    i.e., market for long-term finance
  • It is a voluntary association of persons desirous
    of dealing in securities
  • Stock exchange is a voluntary association, its
    membership is not open to everybody
  • In a stock exchange, only the members can deal in
    i.e., buy sell securities
  • The members of a stock exchange can buy and sell
    securities either as brokers for on behalf of
    their clients
  • The dealings in a stock exchange are under
    certain accepted code of conduct i.e., rules and
    regulations

4
IMPORTANT FUNCTION OF STOCK EXCHANGE
  • Provide central and convenient meeting places for
    sellers and buyer of securities
  • Increase the marketability and liquidity of
    securities
  • Contribute to stability of prices of securities
  • Equalization of price of securities
  • Smoothen price movement
  • Help the investors to know the worth of their
    holdings
  • Promote the habit of saving and investment
  • Help capital formation
  • Help companies and government to raise funds from
    the investors
  • Provide forecasting service

5
HISTORY OF STOCK EXCHANGE
  • The stock exchange was established by East India
    company in 18th century . In India it was
    established in 1850 with 22 stock brokers
    opposite to town hall Bombay .This stock
    exchange is known as oldest stock exchange of
    Asia.

6
Initial members who are still running their
business in stock exchange are
  • D.S.Prabhudas company
  • Jamnadas Morarjee
  • Champak lal Devidas
  • Brymohan Laxminarayan

7
BROKER AND JOBBER
  • BROKER He is one acts as a intermidiary on
    behalf of others. A broker in a stock exchange
    ,is a commission agent who transacts business in
    securities on behalf of non members.
  • JOBBER He is not allowed to deal with the public
    directly .He deals with brokers who are engaged
    with the investors . Thus, the securities is
    bought by the jobber from members and sells to
    members who are operating on the stock exchange
    as broker.

8
DIFFERENCES BETWEEN A JOBBER AND A BROKER
  • JOBBER
  • BROKER
  • A jobber is an independent dealer in securities,
    purchasing or selling securities on his own
    account
  • A jobber deals only with the brokers ,does not
    deal with the general public
  • A jobber earns profit from his operations i.e.,
    buying and selling activities
  • Each jobber specializes in certain group of
    securities
  • A broker deals with the jobber on behalf of his
    clients. in other words, a broker is a middleman
    between a jobber and clients
  • A broker is merely an agent, buying or selling
    securities on behalf of his clients
  • A broker gets only commission for his dealings
  • The broker deals in all types of securities

9
SPECULATION AND SPECULATOR
  • SPECULATION It is the transaction of members to
    buy or sell securities on stock exchange with a
    view to make profits to anticipated raise or fall
    in price of securities.
  • SPECULATOR The dealer in stock exchange who
    indulge in speculation are called speculator .
    They do not take delivery of securities purchased
    or sold by them , but only pay or rescue the
    difference between the purchase price and sale
    price . The different types of speculators are
  • BULL
  • BEAR
  • STAG
  • LAME DUCK

10
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.

11
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.

12
STAG DEER
  • He operates in new issue of market . He is
    just like a bull speculator . He applies large
    number of shares in the issue market only by
    paying , application money , allotment money. He
    is not a genuine investor because , he sells the
    alloted securities at the premium and makes
    profit. In simple he is cautious in his dealings
    . He creates an artificial rise in prices of new
    shares and makes profits.

13
LAME DUCK
  • He is speculator when the bear operator finds
    it difficult to deliver the securities to the
    consumer on a particular day as agreed upon , he
    struggles as a lame duck in fullfilling his
    commitment . This happens when the prices do not
    fall as expected by the bear and the other party
    is not willing to postpone the settlement to the
    next period.

14
Largest stock exchanges
  • IN THE WORLD
  • IN INDIA
  • LONDON STOCK EXCHANGE
  • NEW YORK STOCK EXCHANGE
  • SHANHAI STOCK EXCHANGE
  • AUSTRALIA STOCK EXCHANGE
  • TOKYO STOCK EXCHANGE
  • HONG KONG STOCK EXCHANGE
  • TORONTO STOCK EXCHANGE
  • DEUTSCHE BORSE
  • BMF BOVESPA
  • NASDAQ OMX STOCK EXCHANGE
  • NATIONAL STOCK EXCHANGE
  • BOMBAY STOCK EXCHANGE
  • CALCUTTA STOCK EXCHANGE
  • COCHIN STOCK EXCHANGE
  • MULTI COMMODITY EXCHANGE
  • DERIVATIVES EXCHANGE
  • OTC EXCHANGE
  • PUNE STOCK EXCHANGE
  • INTERCONNECTS EXCHANGE

15
LONDON STOCK EXCHANGE
  • It was the first stock exchange established
    by east India company in 18th century in London.
    The top gainer of LONDON STOCK EXCHANGE is Blue
    chip shares.

16
BOMBAY STOCK EXCHANGE
  • It is oldest and first stock exchange of India
    established in the year 1875. First it was
    started under baniyan tree opposite to town hall
    of Bombay over 22 stock brokers. The top gainer
    in BSE is 100 companies in that GMR infra is first

17
NATIONAL STOCK EXCHANGE OF INDIA(NSE OR
NSEI)The NSE of India is the leading stock
exchange of India, covering 370 cities and towns
in thecountry. It was established in1994 as a
TAX company. It was established by 21 leading
financial institutions and banks like the
IDBI,ICICI,IFCI,LIC,SBI,etc.
  • Features of NSEI
  • Nation wide coverage i.e., investors from all
    over country
  • Ringless i.e., it has no ring or trading floor
  • Screen-based trading i.e., trading in this stock
    exchange is done electronically.
  • Transparency,i.e.,the use of computer screen for
    trading makes the dealings in securities
    transparent.
  • Professionalization in trading, i.e., it brings
    professionalism in its functions

18
OVER-THE-COUNTER EXCHANGE OF INDIA(OTCEI)The
OTCEI is a national,ringless and computerized
stock exchange. It was established in
october,1990.it started its operation in
september,1992.
  • Features of OTCEI
  • It is a nation-wide stock exchange. Its
    operational areas cover entire India.
  • It is a ringless stock exchange. The trading
    ring(i.e., trading place)commonly found in a
    traditional stock exchange is not found in the
    OTCEI.
  • It is a computerized stock exchange
  • Advantages of OTCEI
  • It helps the investors to have easy and direct
    access to the stock exchange
  • It helps investors to get fair prices for their
    securities
  • It provide safety to the investors
  • To provide computerized trading system
  • To provide investors a convenient,effcient and
    transparent mode of investment

19
SECURITIES AND EXCHANGE BOARD OF
INDIA(SEBI)The SEBI was constituted on 12th
April,1988 under a resolution of the Government
of India. On 31st january,1992,it was made a
statutory body by the Securities and Exchange
board of India Act,1992.The Companies
(Amendment) Act,2000 has given certain powers to
SEBI as regards the issues and transfer of
securities and non-payment of dividend
  • Function Of SEBI
  • Regulating the business in stock exchange and any
    other securities markets.
  • Promoting and regulating self-regulatory
    organization.
  • Registering and regulating the work of collective
    investment scheme,incluing mutual funds.
  • Prohibiting fraudulent and unfair trade practices
    relating to securities market.
  • Promoting education, and training of
    intermediaries of securities market

20
  • Power of SEBI
  • Power to approve the bye-laws of stock exchange
  • Power to inspect the books of accounts
  • Power to grant license to any person for the
    purpose of dealing in certain areas.
  • Power to delegate powers exercisable by it.
  • Power to try directly the foliation of certain
    provision of the company Act

21
How to see the value of shares in stock exchange
  • SENSEX is an indicator to checkout in BSE
  • NIFTY is an indicator to checkout in NSE

22
Latest news of BSE and NSE
  • Most profitable company in BSE is GMR Infra
  • Most profitable company in NSE will be RELIANCE
    and ICICI
  • During last three months nearly only 26 of
    profit is earned by our stock exchanges the
    working hours will be
  • From 930 to 330 from Monday to Friday

23
The Daily graph of the companies will be showed
in following manner
24
How stock exchanges get money
  • They get their money by listing fees paid by the
    corporation to have their company traded

25
HOW TO DEAL AND INVEST IN STOCK EXCHANGE
  • In order to deal with a securities one as to
    have an account called Demat a/c or Trading a/c.
    It is just like a bank account. Same procedure of
    opening the bank account is followed to open the
    a/c. But all the banks does not give this
    facility of opening the account , only few banks
    provide this facility. After demat a/c or Trading
    a/s is opened then the securities is bought and
    sold. The banks which gives facility of demat a/c
    in India is
  • ICICI Bank
  • Citi Bank
  • Bank of Baroda

26
HAPPY INVESTMENT WITH LOTS OF PROFITS
  • END

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