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Share is the proof of ownership in a company. The physical proof of this ownership is a record called a share certificate. Today, shares are kept in electronic format or it is also termed as dematerialized format. You can still hold a share in a paper format,
You might have heard of the demat account. In order to start trading in Indian stock exchanges you need to open the demat account. Dematerialisation is a term used for converting physical share certificates to a de materialised on electronic form share. After you convert to any electronic form share the physical form will not exist in India this conversion is done by central securities depository Ltd and national security is depository Ltd they also keep custody of dematerialised shares on behalf of share holders. The central securities depository Ltd acts as a depository for Bombay stock exchange (BSE). The National Securities Depository Ltd Is the Depository for NSE
Analyzing the risks to take is the soul of good investing and the becomes your basis of getting good returns from your investments. This cannot be done without thorough research and analysis.
Take the right decision by yourself. Do not let other factors bother you from your investment policies. Investing without adequate research is like gambling. By gambling on your investments you are not protecting your investments and may incur heavy losses.
Trading in Stock markets involves huge risk. Remember that it can even wash out your capital. Never try to take the risk which you are not comfortable with. As a stock trader, emotion is always your enemy. Emotions can drive your thinking and it may deviate from wise decisions. Variable emotions during trading is one of the prime reason for most traders to fail in stock trading. In order to be a successful trader, you have to control your emotions. For this, it is always best to reduce the risking money and limit it to your comfortable levels. If you are getting sleepless nights for losing Rs.5000 on a trade, then it is advisable not to take the risk of more than Rs.5000. If a loss of upto Rs.3500 is bearable to you, then risk up to Rs.3500 only. In this way emotions will not drive your thinking and wise decisions can be taken to have profitable trades everyday.
A face value has no relation with the market value of the shareMarket value of the share will always change depending upon the market conditions. But the face value is a fixed value of the share as per the books of the company.
A Face value or par value of the company share always remains the same, irrespective of the market price of that share. Companies have to right to split the face value of the share to Rs. 5, 2 or 1 to bring more volatility to the share.Dividend is calculated on the basis of face value only.Hence you are not getting the dividend on market value of the share.
It is an continuing debate over whether it's preferable to buy shares that will grow in value, or shares that pay good dividends. The answer to this question should always lie with the individual investor. It is always suggested to avoid chasing dividends. We refer to the practice of certain investors of buying a share just before a dividend is expected to be announced. Please note that the price of the share will already have taken the dividend into account so you will be paying for it in any case.
Rights issues are the shares issued by a company only to its existing shareholders which will be cheaper than the current market price of that company share. Sometimes companies come out with a batch of new shares and may choose not go to the public (like IPO). Company may just approach only the existing shareholders (those who own the shares of that company). These shares are called a rights issue. In other words, only the existing shareholders have a right to buy these shares.
Example : If the market price of the share is Rs 200, the company may offer the rights issue shares for Rs 180. So if you are an existing shareholder, you get more shares at a cheaper rate than the market.
Bonus shares in India are issued in a definite proportion to the existing holding. (Eg. Ratios against the number of shares holding by the shareholder)
Example - A 2 : 1 bonus would mean that you will get two additional shares (free) for every one share you hold in the company. If you hold 50 shares of a company, a Bonus share of 2:1 will get 100 Bonus shares FREE. So your total number of shares in that company will be 150 instead of 50, without any additional cost (is that exciting!!)
Demat Account:
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