OPEN SESAME

PEOPLE KEEP ON LOOKING FOR TREASURES ALL OVER WHEN ONE IS RIGHT IN FRONT OF THEM . MANY OF US HAVE TURNED THEIR BACK ON ONE OF THE MOST PROFITABLE INVESTMENTS IN OUR TIMES "STOCKS".
HERES AN ATTEMPT TO CREATE AWARENESS ABOUT SHARES IN THE COMMON INVESTOR'S MIND , AND SHOW HIM THE PATH TOWARDS HIS OWN TREASURE.

Friday 30 March, 2007

WHAT ARE THE TYPES OF TRANSACTIONS?

EVEN THOUGH EVERYTHING HERE IS ABOUT BUYING AND SELLING IT TOO INVOLVES SOME DEFINITE RULES AND REGULATIONS

1.INTRA-DAY:

JUST IN CASE YOU BUY A SHARE AND SELL IT ON THAT VERY DAY THEN IT BECOMES AN INTRA-DAY TRANSACTION.
LETS CONSIDER AN EASY EXAMPLE.SAY YOU BUY 1000 SHARES OF A COMPANY BY THE NAME XYZ LTD AT A VALUE OF Rs 50.40 EACH.AS THE DAY PROGRESSES THE VALUE SWINGS UPWARDS ,DOWNWARDS AND FINALLY SETTLES ON A FIXED PRICE AT THE END OF THE DAY.IF THE VALUE OF THE SHARE CLIMBS TO Rs 51.80 AND YOU SELL IT THEN YOU WILL EARN (51.80-50.40) * 1000 = Rs 1,400/-.
ITS INTERESTING TO NOTE THAT HERE YOU DON'T ACTUALLY PAY FOR BUYING THE SHARES (REMEMBER T+2) AND END UP EARNING Rs 1400/-.
THERE'S A BIT OF DAMPER THOUGH,YOU NEED TO SHELL OUT 30% INCOME TAX AND THE BROKERAGE (SAY 2%) FROM THIS AMOUNT.STILL YOU EARN
(1400 - 32%) = Rs 952/-.
ABOVE TRANSACTION SOUNDS GREAT ISN'T IT?ZERO INVESTMENT,NO PHYSICAL EFFORT AND QUICK MONEY TO BOOT.BUT THINGS AREN'T THAT EASY.
FIRST AND FOREMOST FOR CARRYING OUT AN INTRA-DAY TRANSACTION YOU NEED TO KEEP SOME AMOUNT AS DEPOSIT WITH YOUR BROKER.
SECONDLY YOU NEED TO HAVE AN INSTINCT ABOUT HOW THE PRICES ARE GOING TO FARE AND SOME RESEARCH SHOULD GO INTO IT.
MOST IMPORTANTLY WHAT IF THE PRICES SLIDE DOWN RATHER THAN MOVING UP?
AM I AT A LOSS?
WELL THINK OVER IT ,I WILL SOLVE THIS QUERY OF YOURS SOON.

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