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The Stock Market
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QUESTION AND ANSWER
QUESTION AND ANSWER
Question 1: Is share market gambling?
Answer: No share market is not a gambling. This myth create because lack of knowledge in market.
Question 2. What types of myths related to share market?
Answer: 1.Stock Market Investing is Essentially Much like Gambling: ... 2. The Stock Market is Exclusively for Experts. ... 3. You Can Only Make Money By Investing A Lot of Money. ... 4. High Risk Means High Returns in the Stock Market. ... 5. I Should Just Try My Hand at Stock Market Investment.
Question 3:- What is range bond?
Answer: -A range-bound market is one in which price bounces between a specific high price and a low price.
Question 4:- What is Buy - Back?
Answer:-Buy-Back is a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than market price.
Question 5:- What is short selling?
Answer:शॉर्टसेलिंगम्हणजे, एखादाशेअरअगोदरजास्तकिंमतीतविक्रीकरायचाआणिशेअरचीकिंमतकमीझालीकितोखरेदीकरायचा. (फरकहाआपलानफाआहे.) A short sale occurs when the seller borrows stock from a brokerage, and sells it, expecting the price to fall. (Difference is our profit)
Question 6: What is dividend?
Answer:A dividend is the distribution of corporate profits to eligible shareholders.
Question 7: Who decided dividend?
Answer:• Dividend payments and amounts are determined by a company's board of directors.
Question 8: What is stock split?
Answer:A stock split happens when a company increases the number of its shares to boost the stock's liquidity. Although the number of shares outstanding increases by a specific multiple, the total dollar value of all shares outstanding remains the same, because a split does not fundamentally change the company's value.
Question 9: what is candle stick?
Answer: A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period.
Question 10: What time frame check for technical analysis?
Answer:The technical analysis time frames shown on charts range from one-minute to monthly, or even yearly, time spans. Popular time frames that technical analysts most frequently examine include: 5-minute chart. 15-minute chart.
Question 11: On which basis share price varies?
Answer:share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
Question 12: How to select stock for investment?
Answer:Here are seven things an investor should consider when picking stocks: 1. Trends in earnings growth. 2. Company strength relative to its peers. 3. Debt-to-equity ratio in line with industry norms. 4. Price-earnings ratio can give an indication of valuation. 5. How the company treats dividends. 6. Effectiveness of executive leadership.
Question 13: How to select stock for intraday trading?
Answer:Day traders should select stocks that have ample liquidity, mid to high volatility, and group followers. Identifying the right stocks for intraday trading involves isolating the current market trend from any surrounding noise and then capitalizing on that trend.
Question 14: What is intraday treading?
Answer:Intraday trading refers to buying and selling of stocks on the same day before the market closes. If you fail to do so, your broker may square off your position
Question 15: What is difference between investment and trading?
Answer:Investing and trading are two very different methods of attempting to profit in the financial markets. Both investors and traders seek profits through market participation. In general, investors seek larger returns over an extended period through buying and holding. Traders, by contrast, take advantage of both rising and falling markets to enter and exit positions over a shorter time frame, taking smaller, more frequent profits.
Question 16: What is market time?
Answer:Market timing is the act of moving investment money in or out of a financial market—or switching funds between asset classes—based on predictive methods. If investors can predict when the market will go up and down, they can make trades to turn that market move into a profit.
Question 17:What are the Types of Stock Market Trading?
Answer: 1. Intraday Trading [Types of Trading for Experienced Players] 2. Delivery Trading [Types of Trading for Beginners] 3. Short Sell [Types of Trading for Experienced Players] 4. Buy Today Sell Tomorrow (BTST) 5. Sell Today Buy Tomorrow (STBT) 6. Margin Trading.
Question 18: What is financial market?
Answer:It is a market where financial assets i.e. financial instruments are exchanged or bought and sold.
Question 19: when to entry or when to exit?
Answer:Trend lines don't just offer possible entry points; they can also provide potential exit signals. If you have a successful trade going but the stock closes below trend line support that may suggest the trend has run its course. Consider locking in any gains. The pennant pattern can also be applied to an exit strategy.
Question 20: what is pattern in stock market?
Answer:Patterns are the distinctive formations created by the movements of security prices on a chart. A pattern is identified by a line that connects common price points, such as closing prices or highs or lows, during a specific period of time.
Question 21: What type pattern we having in share market?
Answer:1.Pennant 2. Flags 3. Double Top 4. Double bottom 5. Triple tops 6. Triangles 7. Wedges 8. Head and Shoulders, 9. Cup and handle
Question 22: What is Trend line?
Answer:Trend lines are a visual representation of support and resistance in any time frame. They show direction and speed of price, and also describe patterns during periods of price contraction.
Question 23: What is range bond?
Answer: A range-bound market is one in which price bounces between a specific high price and a low price. The high price acts as a major resistance level in which price can't seem to break through.
Question 24: What is support?
Answer:Support represents a low level a stock price reaches over time .Selling causes a stock price to stop rising and start dropping and create support
Question 25: What is resistance?
Answer:resistance represents a high level a stock price reaches over time. Resistance Materializes when a stock price rises to a level that prompts traders to sell.
Question 26:What is technical analysis?
Answer:Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analysing statistical trends gathered from trading activity, such as price movement and volume.
Question 27:What is fundamental analysis?
Answer:Fundamental analysis attempts to measure a security's intrinsic value by examining related economic and financial factors including the balance sheet, strategic initiatives, microeconomic indicators, and consumer behaviour.
Question 28:Types of trader’s personality?
Answer:1. the Accurate Trader. 2. The Administrative Trader. 3. The Artistic Trader. 4. The Adventurous Trader. 5. The Detailed Trader. 6. The Facilitative Trader. 7. The Fun Loving Trader. 8. The Independent Trader.
Question 29: What is PE Ratio?
Answer:The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).
Question 30:What is face value?
Answer:Face value is a financial term used to describe the nominal value of a security, as stated by its issuer. For stocks
Question 31:What is PB ratio?
Answer:Companies use the price-to-book ratio (P/B ratio) to compare a firm's market capitalization to its book value.It's calculated by dividing the company's stock price per share by its book value per share (BVPS). An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation.
Question 32:What is Industry PE?
Answer:Industry PE is the average price-to-earnings ratio of a particular sector or industry. It's used as a benchmark to compare the PE of a stock to the PE of an entire industry. ... If the PE of a stock is lower than its industry PE, then it's considered to be undervalued in comparison to its other peers.
Question 33: What is Book value?
Answer:Book value is the net value of a firm's assets found on its balance sheet, and it is roughly equal to the total amount all shareholders would get if they liquidated the company.
Question 34:What is NSE?
Answer:The NSE or National Stock Exchange is the leading stock exchange of India. It is the fourth largest in the world (based on equity trading volume). Based in Mumbai and established in 1992, it was the first stock exchange in India to offer a screen-based system for trading.
Question 35: What is BSE?
Answer:The BSE or the Bombay Stock Exchange is a lot older than its cousin. It was Asia’s first stock exchange. With a trading speed of 6 microseconds, the BSE is the fastest stock exchange in the world.
Question 36: What is IPO?
Answer:An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. An IPO allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes a share premium for current private investors. Meanwhile, it also allows public investors to participate in the offering.
Question 37: What is EPS?
Answer:Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its common stock. The resulting number serves as an indicator of a company's profitability. It is common for a company to report EPS that is adjusted for extraordinary items and potential share dilution. The higher a company's EPS, the more profitable it is considered to be.
Question 38: What is NET-WORTH?
Answer:Net worth is the value of the assets a person or corporation owns, minus the liabilities they owe. It is an important metric to gauge a company's health, providing a useful snapshot of its current financial position.
Question 39: What is liabilities?
Answer:A liability is something a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits...
Question 40: What is revenue?
Answer:Revenue is the money generated from normal business operations, calculated as the average sales price times the number of units sold.
Question 41: What is Diversification in stocks?
Answer:Diversification is the practice of spreading your investments around so that your exposure to any one type of asset is limited. This practice is designed to help reduce the volatility of your portfolio over time. ... One way to balance risk and reward in your investment portfolio is to diversify your assets.
Question 42:What is market price?
Answer:The market price is the current price at which a stocks can be bought or sold.
Question 43:What is liquidation in stocks?
Answer:Liquidation happens in the investment market when an investor wants to close his or her place in a specific asset or securities. An investor who is a stock long can decide to sell some or all of the shares held for cash in his portfolio. ... Can opt to liquidate his assets.
Question 44: What is FNO?
Answer:Futures and Options (F&O) are the most common derivative contracts where two parties enter into a contract. It is speculative in nature and considered a safer option than the share market.A future contract requires a buyer to purchase shares and a seller to sell shares on a specified future date Option contract gives the buyer and seller the right, but not the obligation to sell or purchase
Question 45:What is equity and derivatives?
AnswerEquity refers to the capital contributed to a business by its owners; which may be through some sort of capital contribution such as the purchase of stock. Derivative is a financial instrument that derives its value from the movement/performance of one or many underlying assets
Question 46: What is commodity in share market?
Answer:A commodity market is a marketplace for buying, selling, and trading raw materials or primary products. Commodities are often split into two broad categories: hard and soft commodities. Hard commodities include natural resources that must be mined or extracted—such as gold, rubber, and oil, whereas soft commodities are agricultural products or livestock—such as corn, wheat, coffee, sugar, soybeans, and pork
Question 47:What is moving average?
Answer: A moving average is a calculation used to analyse data points by creating a series of averages of different subsets of the full data set. In finance, a moving average (MA) is a stock indicator that is commonly used in technical analysis. The reason for calculating the moving average of a stock is to help smooth out the price data by creating a constantly updated average price.
Question 48:Can I trade when market are closed?
Answer:Most trading takes place during this time of day. But trading activity isn't restricted to this time of day. It does, in fact, take place after the market closes—once normal business hours are done. This is known as the after-hours trading session.
Question 49:What is AMO?
Answer:Stock market opens at 9.15 am on weekdays and closes at 3.30 pm. ...The After Market Order (AMO) feature, which helps you to place an order beyond the regular trading hours.
Question 50:How many sectors are there in stock market?
Answer:There are 11 stock market sectors, as classified by GICS, which stands for Global Industry Classification Standard. These sectors include healthcare, materials, real estate, consumer staples, consumer discretionary, utilities, energy, industrials, consumer services, financials, and technology.
Question 51: It is safe trading in unlisted stocks
Answer:You can reap the benefits of investing in unlisted shares in India through PMS schemes that pick up unlisted shares as part of the investment strategy. This is much safer than direct purchase because: You can diversify the risk across the constituents of the portfolio.>
Question 52:How to find undervalued stocks?
Answer: undervalues stocks are shares with a market price significantly lower than what their actual value should be. The value of the company is based on certain fundamental financial indicator. Price to Earnings Ratio. Impact of News. ... PEG Ratio. ... Change in Fundamentals. ... Free Cash Flow. ... The Disruptiveness of the Business Model. ... Price to Book Ratio. ... Key Takeaways.
Question53:How to find good company for investment
Answer: There are N number of stocks present, and it can be overwhelming at times to decide to invest in the right ones. However, there are a few ways to find the right companies to invest in: 1. Pick an industry you are interested in, then find the ETFs (Exchange-traded funds). ETFs, keep a check on the industry performance. Also, check what stocks they are investing in. 2. Apply certain constraints to filter your stock choices. These constraints can be industry, sector, etc. 3. Search extensively. Be updated on the current financial news and read the stock analysis. Consider all possibilities
Question 54:Where can i get company's financial reports?
Answer:Financial information can be found on the company's web page in Investor Relations where Securities and Exchange Commission (SEC) and other company reports are often kept. The SEC has financial filings electronically available beginning in 1993/1994 free on their website.
Question 55:How to apply IPO?
Answer: Login to your trading platform and select the desired issue (company) in the Current IPO section. * Enter the Number of lots and price at which you wish to apply for. * Enter your UPI ID and click on submit. With this your bid will be placed with the exchange.
Question 56:What is criteria for applying IPO?
Answer:Net tangible assets of at least Rs. 3 crore in each of the preceding three full years of which not more than 50% are held in monetary assets. However, the limit of 50% on monetary assets shall not be applicable in case the public offer is made entirely through offer for sale.
Question 57:What is blue chip companies?
Answer:A blue chip refers to an established, stable, and well-recognized corporation. Blue-chip stocks are seen as relatively safer investments, with a proven track...
Question58: what is more profitable small cap or blue chip?
Answer: small caps can offer higher returns as compared to blue chip stocks. For those who are looking for lower risk investments should prefer blue chip.
Question 59: How many stocks should buy in portfolio?
Answer: The average diversified portfolio contains between 20 and 30 stocks. While there is no one-size-fits-all answer to this question, it is influenced by a variety of factors, including your investment horizon, risk tolerance, and current portfolio diversification.
Question60:What is stop loss?
Answer:A stop-loss order is an order placed with a broker to buy or sell a specific stock once the stock reaches a certain price. A stop-loss is designed to limit an investor's loss on a security position. For example, setting a stop-loss order for 10% below the price at which you bought the stock will limit your loss to 10%.
Question61: Types of charts for technical analysis
Answer:The four types that are most common are line chart, bar chart, point and figure chart and candlestick chart.
Question62: Which char is better for technical analysis?
Answer : Whatever colours are chosen, they provide an easy way to determine at a glance whether price closed higher or lower at the end of a given time period. Technical analysis using a candlestick charts is often easier than using a standard bar chart, as the analyst receives more visual cues and patterns
Question 63: What is the use of indicator?
Answer:Market indicators are quantitative in nature and seek to interpret stock or financial index data in an attempt to forecast market moves. Market indicators are a subset of technical indicators and are typically comprised of formulas and ratios. They aid investors' investment/trading decisions
Question 64: What is volume in stock market?
Answer:Volume is the amount of an asset or security that changes hands over some period of time, often over the course of a day. For instance, stock trading volume would refer to the number of shares of a security traded between its daily open and close.
Question 65: Timing for commodity trading
Answer: Internationally Referenceable Non-Agri Commodities 09.00 AM 11.55 PM Internationally Referenceable Agri Commodities (Cotton, CPO &Kapas) 09.00 AM 09.00 PM All Other Commodities 09.00 AM 05.00 PM
Question66:Timing for currency trading
Answer:9:00 a.m. to 5:00 p.m.
Question67: What is derivative market?
Answer: A derivative can trade on an exchange or over-the-counter. ... Common derivatives include futures contracts, forwards, options, and swaps.
Question68: What is Nifty?
Answer:The Nifty meaning is a derivation from the mix of two words, i.e. “National Stock Exchange” and “fifty”. It is an abbreviation of the National Stock Exchange Fifty. It is a collection of top performing 50 equity stocks that are actively trading in the index. However, 51 stocks are currently trading on Nifty. Hence, Nifty is also known as Nifty50 or CNX Nifty.
Question69: What is Bank nifty?
Answer:Nifty Bank, or Bank Nifty, is an index comprised of the most liquid and large capitalised Indian banking stocks. It provides investors with a benchmark that captures the capital market performance of Indian bank stocks.
Question 70: What is SEBI?
Answer :The Securities and Exchange Board of India (SEBI) is the leading regulator securities markets in India, analogous to the Securities and Exchange Commission in the U.S. SEBI has wide-ranging regulatory, investigative, and enforcement powers, including the ability to impose fines on violators.
Question71:What is options treading?
Answer:Options are a form of derivative contract that gives buyers of the contracts (the option holders) the right (but not the obligation) to buy or sell a security at a chosen price at some point in the future. Option buyers are charged an amount called a premium by the sellers for such a right. Should market prices be unfavourable for option holders, they will let the option expire worthless and not exercise this right, ensuring that potential losses are not higher than the premium. On the other hand, if the market moves in the direction that makes this right more valuable, it makes use of it.
Question72: What is future trading?
Answer:Futures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price. The buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date.
Question73: Effect of news on stocks
Answer: • Positive news will normally cause individuals to buy stocks. Good earnings reports, an announcement of a new product, a corporate acquisition, and positive economic indicators all translate into buying pressure and an increase in stock prices. • Negative news will normally cause people to sell stocks. A bad earnings report, a lapse in corporate governance, big-picture economic and political uncertainty, and unfortunate occurrences all translate to selling pressure and a decrease in the prices of many if not most stocks.
Question74: What is bull in stocks market?
Answer:A bull market is the condition of a financial market in which prices are rising or are expected to rise.
Question75: What is bear in stocks market?
Answer:A bear is an investor who is pessimistic about the markets and expects prices to decline in the near- to medium term
Question 76: What is call in share market?
Answer:Call options are financial contracts that give the option buyer the right but not the obligation to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period. The stock, bond, or commodity is called the underlying asset. A call buyer profits when the underlying asset increases in price.
Question77: what is put in share market?
Answer:Put options are a type of option that increases in value as a stock falls. A put allows the owner to lock in a predetermined price to sell a specific stock, while put sellers agree to buy the stock at that price.
Question78: What is strike price?
Answer:A strike price is a set price at which a derivative contract can be bought or sold when it is exercised. For call options, the strike price is where the security can be bought by the option holder; for put options, the strike price is the price at which the security can be sold.
: Timing for intraday trading
Answer: 9:15 AM to 3:20 PM
Question80: What is portfolio?
Answer: A portfolio is a collection of various assets owned by investors. You can include gold, stocks, and units of mutual funds, derivatives, real estate property, bonds, and other valuables in your portfolio. You may invest in such assets to generate profits while you want your assets' value to be protected.
Question 81: What is investors?
Answer:An investor is any person or other entity (such as a firm or mutual fund) who commits capital with the expectation of receiving financial returns. Investors can analyse opportunities from different angles, and generally prefer to minimize risk while maximizing returns
Question 82: What is Trader?
Answer:A stock trader is a person who attempts to profit from the purchase and sale of securities such as stock shares. Stock traders participate in the financial markets in various ways. Individual traders, also called retail traders, often buy and sell securities through a brokerage or other agent.
Question 83: What is Risk management?
Answer:Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings
Question 84:What is liabilities?
Answer:The debts and obligations of a company or an individual. Current liabilities are debts due and payable within one year. Long-term liabilities are those payable after one year. Liabilities are found on a company's balance sheet or an individual's net worth statement.
Question85:what is leverage in stock market?
Answer: Leverage refers to the use of debt (borrowed funds) to amplify returns from an investment or project. ... Companies use leverage to finance their assets—instead of issuing stock to raise capital, companies can use debt to invest in business operations in an attempt to increase shareholder value.
Question 86: What is risk?
Answer:Risk is defined in financial terms as the chance that an outcome or investment's actual gains will differ from an expected outcome or return. Risk includes the possibility of losing some or all of an original investment.
Question87: What is risk and reward ratio?
Answer: The risk/reward ratio marks the prospective reward an investor can earn for every dollar they risk on an investment. Many investors use risk/reward ratios.
Question 88: What is trend line?
Answer:Trend lines are a visual representation of support and resistance in any time frame. They show direction and speed of price, and also describe patterns during periods of price contraction
Question89: What is penny stock?
Answer:Penny stocks are those that trade at a very low price, have very low market capitalisation, are mostly illiquid, and are usually listed on a smaller exchange. Penny stocks in the Indian stock market can have prices below Rs 10.
Question90:What is equity capital in stock market?
Answer:Equity capital is funds paid into a business by investors in exchange for common or preferred stock. This represents the core funding of a business, to which debt funding may be added. ... Owning a sufficient number of shares gives an investor some degree of control over the business in which the investment has been made.
Question91: What is valuation of the company?
Answer:Valuation is the analytical process of determining the current (or projected) worth of an asset or a company. ... An analyst placing a value on a company looks at the business's management, the composition of its capital structure, the prospect of future earnings, and the market value of its assets, among other metrics.
Question92: What is cash flow?
Answer:Cash flow per share is the after-tax earnings plus depreciation on a per-share basis that functions as a measure of a firm's financial strength. Many financial analysts place more emphasis on cash flow per share than on earnings per share (EPS).
Question93: What is RSI in share market?
Answer:The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.
Question94: What is pivot point?
Answer:A pivot point is a technical analysis indicator, or calculations, used to determine the overall trend of the market over different time frames. The pivot point itself is simply the average of the intraday high and low, and the closing price from the previous trading day.
Question95: What is liquidity in share market?
Answer:A stock's liquidity generally refers to how rapidly shares of a stock can be bought or sold without substantially impacting the stock price.
Question96: What is primary market?
Answer:The primary market is where securities are created in the primary market, companies sell new stocks and bonds to the public for the first time, such as with an initial public offering (IPO).
Question97: What is secondary market?
Answer:the secondary market is where those securities in primary market are traded by investors.
Question 98: Where to find live charts for technical analysis?
Answer:1.Tradingview. 2. Investing.com 3. Stockcharts.com 4. FinViz
Question 99: Where to find information for fundamental analysis?
Question100: What is FII?
Answer:A foreign institutional investor is an investor in a financial market outside its official home country. Foreign institutional investors can include pension.
Question 101: What is DII?
Answer: Domestic Institutional Investors are institutions like insurance companies, mutual fund houses, pension funds, or provident funds. DIIs generally pool money from the small investors of the country and then trade in different securities and assets of the country.
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