Share Market FAQ

Online Demat Account Opening

IPO /PRIMARY Market

  • What is IPO?
    • Initial Public Offering (IPO) is when a Private Companies want raise Investment capital offering their shares to public first time is called IPO

  • What is Primary Market ?
    • Primary Market is entirely IPO based market where Private Companies offers their share to public to get list on Exchange , People who are interested to buy share of those companies before listing on Exchange its called Primary Market .

  • Can I apply an IPO without having Demat Account ?
    • Nobody can not apply IPO without Demat Account for IPO application you must have a Demat Account .

  • What is FPO ?
    • FPO (follow on Public offering ) is offering of shares for those public companies which are currently listed with Exchange but they has gone through IPO Process

  • What is the process to apply IPO Online ?
    • 1.Login on your NetBanking Account.

      2.Click on the link of "IPO Application".

      3.Select one of the IPOs you want to apply and mention up to 3 bids.

      4.Need to Enter your depository details.

      5.Place and confirm your Order for IPO.

  • What are Syndicate Members and their role in IPO processing ?
    • Syndicate Members are those Broking houses,they having right to distribute IPO applications,which they received from Investor and get Upload data on the stock exchange IPO shares bidding platform (NSE / BSE).

Stock Exchanges In India

Taxes and other Charges on Trading , Demat and Commodity Account

  • What is GST ?
    • Goods and Service Tax (GST) always levied on Brokerage charges by stock broker.

  • What is STT ?
    • Securities Transaction Tax (STT) maximum 0.1% is levied on per transaction to buy and sell any securities .

  • What is CTT ?
    • Commodity Transaction Tax (CTT) maximum 0.1% is levied on per Transaction to buy and sell any commodity future and option contracts

  • What is SEBI Charges ?
    • SEBI Turnover Charges levied minimum 0.0001% and Maximum Rs 15 cr on every transaction executive to buy and sell any securities

  • What is Exchange Transaction and Clearing Charges ?
    • Exchange Transaction Charges and clearing charges levied by the Exchanges for every executed Trade to Buy and sell any securities

  • What is stamp Duty Charge?
    • Stamp duty is levied on transaction or may be whole day turnover to buy and sell any securities on exchange its charge different in other state to other state

  • What is PIP in Currency Trading ?
    • PIP (Percentage in Points ) is difference of Bid and ASK in currency pair which trades on Exchange.

  • What is DP Charges ?
    • Depository Charges (DP) is levied, when any investor sell his holding from demat then dp charges levied on that transaction executed on exchange

Depositories In India

  • What is Depository ?
    • Depository are those organisation which holds electronic assets of retail and Institutional Trader and Investor like securities , bonds and MF etc.

  • Who is depository Participant (DP) ?
    • DP are those intermediaries who link with Depository Houses to serve the retails Trader and Investor to settle all the holding transaction

  • What is NSDL ?
    • National Securities Depository Limited is an Indian central securities depository based in Mumbai. It was established on 8 November 1996 as the first electronic securities depository in India

  • What is CDSL ?
    • Central Depository Services Ltd, is India’s 2nd central securities depository based in Mumbai. They holding securities either in certificated or uncertificated form, to enable book and Track entry transfer of securities

Non Individual Demat Account in India

  • What is Corporate Demat Account ?
    • Any Private and Public company can open Corporate Demat Account for Share Trading and Investment

  • What are the documents required to open corporate Account for a Public and Private Company ?
    • 1. PAN card copy of the Company and the PAN card copies of each Authorised Signatory/ Whole Time Director of the firm.

      2. Address proof copy of the Company and the address proof copy of each of the Authorised Signatory of the Company.

      3. Income proof documents of the Company

      4. The Certificate of Incorporation of the Company

      5. (MOA)The Memorandum of Association and( AOA)the Articles of Association of the Company.

      6. A FACTA declaration of the Company

  • What is HUF Demat Account ?
    • Hindu Undivided Family (HUF) Karta can open Demat Account with stock broker

  • What are the Documents required to open HUF Demat Account ?
    • 1. HUF Pan Card and the PAN card copy of the Karta.

      2. Address proof copy of the HUF along with address proof copy of the Karta of the HUF.

      3. Income proof in the form of the of the HUF

      4. Photocopy of the PAN card of the HUF’s Co-parcener.

  • What is Limited Liability Partnership (LLP) Demat Account ?
    • LLP Limited Liability Partnership is Partnership Demat Account

  • What are the documents required to Limited Liability Partnership (LLP) Demat Account ?
    • 1. Copy of the LLP Agreement duly attested by a notary public (investment clause must be mentioned).

      2. PAN card copy of the Firm.

      3. PAN card of each individual Partner (Attested by each such partner).

      4. Address Proof copy of the Firm.

      5. Address Proof copy of all the partners (Attested by Each Individual Partner).

      6. Income Proof

      7. Copy of Balance Sheet of the Firm for the last 2 Financial Years

      8. Aadhaar of the Authorized Person as per the Letter of Authority on the letterhead of the firm.

      9. Copy of Certificate of Registration

      10. Latest percentage interest of each partner/

      11. FATCA Declaration

  • What is Partnership Account ?
    • Partnership is a Partnership Demat Account Under sec 1932 Partnership Act as per Partnership Deed

  • What are the documents required to open Partnership Demat Account ?
    • 1. PAN card copy of firm and the PAN card copies from each Partner of the firm

      2. Address proof copy of the firm and the address proof copy of each of the Partner’s of firm.

      3. Income proof documents of the firm,

      4. A Foreign Account Tax Compliance Act Declaration from the Firm

      5. A copy of the Certificate of Registration .

Margin for share Trading

  • What is Margin for Trading ?
    • Margin is extra amount which providing by the stock brokers to their Clients as per the amount Deposited in Trading Account .

  • How to trade Margin in Intraday Trading ?
    • A deposited Rs 10000/- in Demat Account , but want purchase Rs 50000/- worth share , so here Rs40,000 is Margin Money which is providing by a stock broker.

  • What is Margin Lending ?
    • When Any stock broker give Loan against Securities its called Margin Lending

  • What is span Margin ?
    • SPAN margin calculated by a system called standardized portfolio analysis of risk (SPAN),this is the system which identified how much margin required and adopted by Future and Option Exchanges .

  • What is Exposure Margin ?
    • Exposure Margin provided by stock broker along with span margin to manage margin risk of trader and investor.

  • What is Intraday Limit ?
    • Intraday Limit provided by the stock brokers to their clients against n number of times Whatever they deposit in Trading account .

  • Intraday Position Squareoff
    • When stock brokers gives Margin to their clients along with margin they have to Right to close these position on given time its called Intraday Position squareoff.

Trading Platform

Stock Market Basic

  • What is stock market ?
    • Stock or Share Market is place where we can buy and sell shares and financial Instruments online get the benefit to trade on different exchanges

  • What is financial market?
    • Financial Market is wide Market term , where people buy and sell and Buyer and seller participate in Trade Equity, bond , currency and derivative markets .

  • What is secondary Market ?
    • Secondary Market is place where buyer and seller participate directly in equity Market online for those securities which they got listed on exchange .

  • How to buy shares online ?
    • Firstly Need to open Demat Account after that will buy and sell share online .

  • How many segments are in stock market for trading ?
    • There are 5 segments in the stock market to trade

      1.Equity , 2.Equity Intraday ,3.Future and Option , 4.Currency derivative ,5.Commodity

  • What is Dividend on shares?
    • Dividend is a portion distribute by company to their shareholders from there earnings ,can be paid in Cash payment, Cheque Payment or Online Transfer .

  • What is bonus issue of share ?
    • Bonus issue of share does not involve cash flow of payment , it is issued from company’s reserve to every shareholder of this particular company but it does not affect company net assets as well .

  • What are large cap Stock?
    • Large Cap stocks there Market cap is very high and keep Heavy weightage in Benchmark Index Like Nifty and Sensex

  • What is small cap stock?
    • Small cap stock ,there Market Cap is Very Low they does not affect benchMark indexes

  • What is Midcap stock?
    • Mid cap stock, there Market cap is Much Higher from small cap stocks but they does not affect Benchmark indexes

  • What is Nifty ?
    • Nifty is a Benchmark Index of Nation stock exchange of India(NSE) represent India growth story

  • What is Sensex ?
    • Sensex is Benchmark and first Index of India by Bombay Stock Exchange represent India’s Growth story

  • What is Derivative Market ?
    • Derivative Market derive from Underlying asset which is trading on exchanges like Equity , Currency and Commodity through 3 month contracts with monthly expiry .

  • What is Equity Market ?
    • Equity Market is a place where Buy and sell the share online through demat Account

  • What is Currency Market ?
    • Currency Market is a place where we buy and sell the currency pair as per the exchange guideline in India 4 Currency Pair registered on Exchange USD/INR, EUR/INR, GBP/INR and JPY/INR

  • What is Commodity Market ?
    • Commodity Market is a place where we buy and sell the commodity like Gold , silver , zinc etc as per the exchange Guideline Exchanges in India .

  • What is Bank Nifty ?
    • Bank Nifty is Leading Benchmark Index from National Stock Exchange represent Banking Heavyweights Shares Like HDFC,AXIS BANK , ICICI BANK .

  • What is Bull and Bear Market?
    • Bull Market is called Market is in Uptrend

      Bear Market is called Market is in Downtrend

  • What is Call option ?
    • Option are type of Derivative Securities , so call option describe Uptrend of market

  • What is put option ?
    • Option are type of Derivative Securities , so call option describe Downward Trend of market

  • What is Index future ?
    • Index Future are those Derivative Contracts which are cash settled future contracts on the value of a particular stock market Index.

  • What is stock future ?
    • Stock future are those Derivative Contracts which are cash settled Future contracts on the value of underlying Individual Equity share values.

  • What is KYC(Know your Client ) ?
    • This is One time process while Dealing in securities Market , Once the KYC done through SEBI registered intermediary (Broker, DP and Mutual Fund etc.)this is called KYC Process

SEBI for stock market .

Brokerages Charges on Trading , Demat and Commodity Account

POA for Demat Account

NRI Demat Account in India

  • What is NRI (Non Resident Indian ?
    • Non-Resident Indian (NRI) means a “person resident outside India” who is a citizen of India

  • What is the process of investment in shares through stock exchanges in India?
    • As per Reserve Bank of India (RBI) guidelines, NRI who desire to invest in shares in India through a stock exchange need to approach the designated branch of any authorized dealer (bank) authorized by reserve bank to administer the PIS (Portfolio Investment Scheme) to open a NRE (Non Resident External) /NRO (Non Resident Ordinary) account under the scheme for routing Investments.

  • What is PIS (Portfolio Investment Scheme )
    • Portfolio Investment Scheme (PIS) by reserve bank of India to NRI to Buy and Sell any securities of india companies on stock exchanges Under this scheme

  • What is OCI (Overseas citizen of india) ?
    • OCI Scheme operational from 02nd Dec 2005 government of India decided to grant overseas citizenship of India (OCI) its known as “dual citizenship”.

  • What Documents Required to get open NRI/OCI/PIO Trading Account in India?
    • List of documents to be taken while registering NRI/PIO/OCI Clients as may be applicable •

      Document ensuring status of entity In case of Indian passport - Valid passport, Place of birth as India,

      Valid Visa – Work/Student/employment/resident permit etc. In case of foreign passport : Valid passport and any of the following

      • Place of Birth as India in foreign passport

      • Copy of PIO / OCI Card as applicable in case of PIO/OCI

      • PIS Permission Letter from the respective designated bank

      • PAN Card

      • Overseas Address Driving License/ Foreign passport /Utility Bills/ Bank statement (not more than 2 months old)/ Notarized copy of rent agreement/ leave & license agreement/ Sale deed.

      • Photograph of Investor.

      • Proof of respective bank accounts & depository accounts.

  • is this mandatory for any NRI to provide Indian Address proof to open NRI trading Account ?
    • In such case if any NRI want to provide Indian Address Proof to open NRI Trading Account additionally in that case they need to provide document evidence in support local Address

Online Share Trading and Investing

  • How to start Online Trading ?
    • To start Trading you need to open a demat account first with stock broker , Once Demat Account get open , add money from your saving bank account and start Online Trading .

  • Introduction to online share Trading
    • Online share Trading is a easy way to Invest and Trade in financial Market through any stock broker they Provide Trading platform for online share Trading .

  • Online Share Trading Vs Offline share Trading
    • Online Share Trading : this is the new way of trading through online software , mobile application there is no need to call to broker placing orders.

      Offline Share Trading : this is the Traditional way of trading where you need to call and Trade to stock broker .

  • How to start Investing in stock Market ?
    • Investment in stock Market is very easy now a days , need to open Demat Account with any stock broker , Once the Demat Account get Open you can Invest in shares and Mutual Funds etc.

Trading support and Tool

  • What is Margin Calculator ?
    • This Unique tool Provided by Online stock broker to calculate Margin for Derivative Market Lot and funding calculation

  • What is Brokerage Calculator ?
    • This Online Brokerage Calculation Tool available on the most of the stock brokers to calculate brokerage charges before placing orders

  • What is GTC ?
    • The need for a GTC order is made when an investor or trader place an order to buy or sell a stock and then wait till it is canceled or is not complete, which is called a GTC order.

  • What is Bracket Order and Trailing stop loss ?
    • Bracket Order is new type of Order where you can Place your set price for buy and sell along with Target Price , stop loss and Trailing stop Loss simultaneously

  • Online Trade and PNL Report
    • This is tool providing by broker to manage Ledger and PNL and report for executed Trades

  • Back Office Tool
    • This is the tool where you can check All the trading related reporting which help to Track all the details