Stock Market Investment in India
Being one of the rapidly growing economies in Asia and the world, investors from all over the world should consider investing in the Indian stock market. If you want to participate in India’s stock market investment, you must trade at the NSE (National Stock Exchange) or BSE (Bombay Stock Exchange). The trading mechanism at the NSE and BSE is the same; it is done through a limit order book whereby the matching of orders is electronically done by a computer.
When/why should you invest in stock?
There are many questions from traders about when to invest in stock and why to invest in stocks. The answer to the question of when to invest in stock is now. The answer to the question why to invest in stock is because of the good returns.
Why invest in India stock market and any other?
The reason why you should choose the Indian stock market investment is that there are no specialists or market makers. The entire process of trading is driven by orders – meaning that the market orders which the investors place are automatically matched with the best possible orders of limit. In consequence, the sellers and buyers in the Indian stock market investment remain anonymous. Orders in the system of trading are placed through stock brokers. The stock brokers provide vital stock market tips for local and foreign investors in India. The institutional investors can invest through the DMA (Direct Market Access) option whereby they use terminals of trading (which are usually provided by the brokers) for direct placing of orders in the Indian stock market.
Futures and Options Trading
What is future & option trading? In simple words, a futures contract refers to one whereby one undertakes to take or make the delivery of a certain productat a future date at a price that is set out and determined at the present. In the formal futures trading in India, there are standardized agreements that specify the quantity, price, and time of delivery. In the past, futures trading was about agricultural products. These days, various products such as currencies, precious metals, and stock indices can be traded on options and futures. Options are similar to insurance; the buyer of the option pays premiums to the seller of options for the right of buying or selling of a futures contract at price that is specified. Like insurance, the buyer of options can choose to exercise or not to exercise his or her rights.
How the investment in futures and options can give good returns compare to other investments
There are two main reasons for the existence of the markets of options and futures in India, namely price discovery and risk transfer. The losses or gains in the trading of futures are dependent on changes in prices. After selling futures contracts, you will realize profits if there is a fall of prices. For a buyer of a futures contract, an increase in prices will lead to profit. To realize profit on trade in futures, you can buy low first and sell high later, or make a reversal of the order and sell at a high price and then buy at a low price.
One of the vital stock market tips to all investors is that they should invest in commodities. Commodities are the best option for those investors who are interested in diversifying their portfolios of investment beyond real estate, bonds and shares. The commodities being talked about here are silver, gold, crude oil and even oilseeds in the market of futures.
How does commodity exchange trading work?
Will the prices of gold increase? Will the prices of crude oil decrease? Because of the prevailing drought, will the prices of soya beans increase? If you have reasonable grounds to believe that any or all these predications can turn true, and you are prepared to bet some money on them you should try doing so in the commodity futures market. This is how the commodity futures market works.
Why invest in commodities?
Compared to the stocks, commodities trading is cheaper because the margins are significantly lower as compared to stock futures. The brokerage is also lower in the commodity futures. Because of this reason, commodity exchange is the best choice for those investors who love speculating about the future happenings in the market.
There are various options of investments which offer different rates of return. There are various risks associated with such investments which you need to be aware of before you make any investment decision. Whether you are a beginner or novice trader, it is good to sign up for equity and commodity advisory services when to invest in stock and other vital stock market tips that will help you stay informed about the latest happenings in the market to make a wise investment decision