Share bazar online | stock morket

Frequently asked questions
Why do we invest in stock market?

What is share market?
  • Share Market which also a Stock Market. The key contrasts is that a stock market offers you some assistance with financial purposes like securities, bonds, mutual funds, etc. A Share market just permits exchanging/trading of shares. A Share Market is a place where the share are either provide or exchange.
  • Stock Exchange is the fundamental stage that will gives the facilities used to trade the company shares and invest into mutual funds or the bond which is related to company. Either you can buy or sell the stock only when that company is listed on an exchange. India top stock exchanges are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). That is the place where the traders or investors can meet to buy and sell.
  • THERE ARE TWO KINDS OF STOCK MARKETS – PRIMARY AND SECONDARY MARKET.
    • Primary Market: Here the company gets register to issue the share amount and raise money of each share. This is additionally called getting listed in a stock exchanges. A firm/company enters in primary markets is to raise the capital amount. For the first time the company sells the shares to public then, it is called an Initial Public Offering (IPO).
    • Secondary Market: Once new securities have been sold in the primary market, these share are traded in the secondary market. This is a chance for investors/traders to exit his/her investment and he/she can sell the shares for their profit. Secondary market transactions are refers to trades where one investors(buyer) purchases shares from another investors (seller) at the overall market price or at whatever the price, two gatherings concurs upon. Formally, investor direct such transactions by utilizing a brokers who does the transactions for them.
How to buy shares in share market?
  • Initially, you have to open a trading account and a demat account with the brokers. These accounts will be connected to your bank account for the easy exchange of cash as well as stocks.
  • Bonds: Companies need money to invest on some projects. They will pay back you by the money earned through this transaction. They are using bonds to raising the funds. If the company gets the amount from the bank means it is loan. Correspondingly, when a company gets from investors in return for agreeable installments of interest, it is known as a bonds. Thus, a bonds is a method for lending the money from others (investments). There is lots of benefit when you invest in bonds, it will demonstrate the face value of the measure of money being borrowed by the firms, the loan amount that the borrower (Company) need to pay, and the due date for paying the money back called as the maturity date.
  • Secondary Market: In returns for the cash, companies issue shares. Owning a share is much the same as holding a part of the company (i.e)., you also a one of investor in the company. These shares are then traded in the stock market. If the project get completed you will get a part of share from the profit. Share are in this manner, a declaration of responsibility for company. In this way, as a shareholder, your share benefits the company. As the company continues improving, your share will increment in quality.
  • Mutual Funds: These are investments that permits you to in an indirect way put invest into stocks or bond. Each MF plan issues units, which have a certain value quite related to share. When you contribute, you accordingly turn into a unit-holder. At the point when the instruments that the Mutual Fund plans invest into profit, as a unit-holder you also get your share.
  • Derivatives: The value of shares keeps incalculable then it is difficult to fix a particular price. Here the derivative instruments that help you trade in the today’s price for the future purpose. Simply mention in an agreement to either buy or sell a stocks or other instrument at a certain price which was fixed earlier.
What does the SEBI (Securities and Exchange Board of India) will do?
  • The Security and Exchange Board of India (SEBI) is ordered to govern the primary and secondary market in India. SEBI has the obligation of both development and regulation of the company market. It regularly turns out with far reaching regulatory measures for aiming the end financial benefits for company in securities.

    Its basic objectives are:

    • Protecting the interest of investors in stock.
    • Improvement the share market by advertising
    • Stock Market regulations
How are derivative contracts linked to stock prices?

Suppose assume you buy a Future contract of ABC shares at Rs 2,000, the stock cost of the IT company right now in the spot market. The agreement is cover to lapse after a month. As of now, the stock is trading at Rs 2,600. (i.e.) You make a benefit of Rs. 600 for each share. You are getting the stock at cheaper rates. If the price is unchanged, you have gotten nothing. Similarly, if the share price fell, you would have lost the same. As we see everything is depend on the underlying asset.

What are the pre-requisites to invest?

This has three key necessities for pre-requisites to invest:

  • Demat account: It is the unique account for every investors and traders. And this is the account which stores your securities in electronic form. Thus, no one can access your account without your authority.
  • Trading account: Here we conduct trade by this account. The account number can be viewed as your identity in the trading sector. It is connected to the demat, and in this manner guarantee that your share go to your demat account.
  • Margin maintenance: This pre-requisites tradings. While large number of money uses margin to conduct trader, this is transcendently used in derivative segment. Margin are act as a risk containment measure for the exchange and serve to save the integrity of the market.
  • You are required to deposit initial margin at very start. The amount you need to deposit is chosen by the stock exchanges. This initial margin is balanced daily by confidence available market value of your open positions.
  • The exposure margin is used to control changeability in the derived markets.
  • Beside the initial and exposure margin, you have additionally needed to maintain the Mark-to-Market (MTM). This covers the daily differences between the prices of the contracts and its closing price on the day of purchase. By this way, the MTM margin differs in day by day or time to time.
What are futures contracts?

A future contract is an declaration between two parties a buyers and a sellers. The previous agrees the purchase from the last, a fixed number of share or a index at a particular period in future at a predetermined price. These will be decided at the time of transaction. As future contract are standardized as far as expiry date and contract sizes, they can be traded on exchanges. A buyers may not know the identity of the sellers and the vice versa. Further, every contract is ensured by the exchange. Future contract are available on various kinds of assets such as stocks, index, commodities, currency pair, et cetera.

What are index future?

A stock list is used to view the change happened in the price of a group stock over a certain time. It is developed by selecting the stocks of similar company. Some files represent to a certain segment or the general market thus help the value of companies. Future contract are likewise accessible on these list. Here are a few elements of index future

  • Contract size: Similar to stock futures, these contract are additionally managed in lots of part. In any case, how could that be the point at which the index is basically a nonphysical numbers? No, you don’t need to buy future of the stock fitting in with the index. Rather, stock indices points in the estimation of the index are changes over into rupees.
  • Expiry: A open position in index future can be settled by directing a opposing exchange prior to the day of expiry.
  • Duration: As on account of stock future, index futures too have three contract arrangement open for trading at anytime – the near month (1 month), next month (2 months) and far month (3 months) index futures contract.
What are future contract pricing?

Future are derivative product whose quality depend to a great scope on the price of the fundamental stock or indices. On the other hand, the pricings is not direct. There remain a difference between the price of the fundamental models in the trade and out the derivative segment. This distinction can be apprehend through two simple pricing models for future contract. These will permit you to assess how the pricing of a stock futures or index future contract may carry on. These are:

  • The Cost of Carry Model
  • The Expectancy Model
What is basis?

A difference between the future price and the spot price is known as the basis. On the off chance that the futures price of an asset is trading higher than its spot value. then, basis for the asset is in negative stage. That is the market are depend upon to the rise in the asset value in futures. Otherwise, if the spot price of the asset is higher than its futures price, the basis for the asset is in positive stage. That is, is representative of a bear run on the market in the futures.

What are options?

It is a kind of security that can be buy or sell at a pre-defined price within a pre-determined time, in exchange for a non-refundable forthright deposit. An option contract offers the buyers the privilege to buy, not the commitment to buy at the pre-determined price. Options are a kind of derivative products. The right to sell a security is called as a ‘Put Option’, and the right to buy is called as the ‘Call Option’. The usage of the option is as follows:

  • Leverage: Option offer you profiting from some change in offer prices without putting down the maximum of the share.
  • Hedging: Similarly they can be used to protect yourself from change in the price of a shares and giving you a chance to buy or sell the shares at a pre-decided prices. Generally as future contract reduces the risks for buyer by setting a pre-decided future price for an underlying asset, Option contract do the same and then, without the commitment to buy that exists in a future contracts. The sellers of an option contracts is known as the ‘option writer’. There is no physical exchange of reports or documents in option contract.
 
IMPORTANT TERMS IN OPTIONS CONTRACTS:

STRIKE PRICE:It is also known as “exercise price”. The price at which a particular derivative contracts can be exercise. Strike price is used to show stock and index options, in which strike prices are settled in the contract. For call options, the strike price is the place the where the securities can be bought, while for put option the strike price is the price at which share can be sold.

 

STRIKE PRICE INTERVAL : These are the diverse in strike price at which an option contract can be exchange. Strike price is controlled by the exchange on which the assets are traded. There are regularly not less than 11 strike prices declare for each kind of option in a given month – 5 price over the spot price, 5 price beneath the spot price and one price is equivalent to the spot price.

 

EXPIRE DATE: A future date is on or before which the option contract can be expire. Option contracts have 3 different durations as we mentioned below:

  • Near-month (1 month)
  • next-Month (2 month)
  • Far-Month (3 month)

*Please note that long terms option is available for Nifty index. Future and Option contract typically expires on the last Thursday of the particular month; if it is holiday then it will take the previous working day as expire date.

 

AMERICAN AND EUROPEAN OPTIONS: The expressions in terms of “American” and “European” refers to the sort of underlying asset in a options contract and when it can be executed/expires. ‘American options’ are Options that can be execute whenever at the time before their closing date. ‘European options’ are Options that can be execute on the expire date.

Indian market follows only the Europe market.

LOT SIZE: Lot size is the fixed number of units of the underlying asset, that frame a portion of a single Futures and Option contract. The standard lot size is different for every stock and is chosen by the exchange on which the stock is traded.

E.g. Reliance Industries option contract have a great lot size of 250 shares for every contract.

 

OPEN INTEREST: Open Interest refers to the aggregate number of extraordinary positions on a specific option contracts over all members in the market at any given purpose of time. Open Interest becomes the empty past of the expire date for a particular contract.

For example: In the event the trader A buys 100 Nifty options from trader B where, both A and B are entering in the market unexpectedly for the first time, the open interest would be 100 futures or 2 contracts. The following day, A Trader offers his/her contract to C Trader. This does not change the open interest, as a decrease in A’s open position is balanced by an increasing in C’s open position for this particular asset. Now, if A buys 100 more Nifty Future from another D trader, the open interest for the Nifty Future contract would get to be 200 futures or four contracts.

 

TYPES OF OPTION: Options are 2 types call option and put option.

 

CALL OPTION: A call option, primarily named a “call”, it is a financial contract between two parties, the buyer and seller. The buyer of call option has the right, however it is not the commitment to buy a number of a particular product or financial related instruments (the underlying) from the seller of the option at a certain time, the closing date at a certain price (the strike price). The seller is committed to sell the product (commodity) or financial related instruments to the buyer, if the buyer wants to buy, the buyer pays money (premium) for this right.

PUT OPTION:  Put Option gives the holder privilege to sell a particular asset at the strike cost at whatever time before it expire for a premium paid in advance. Since you can sell a stock at any given purpose of time, if the spot price of a stock falls during the contract period, the holder must protect from this fall in price. This clarifies why put option turn out to be more important when the price of the basic stock falls. Also, if the price of the stock rises during the contract period, the seller just loses the premium pay and does not endure lost the whole price of the asset. Put options are diminish as “P” in market criteria.

How are options contracts priced?
  • Option Contract can be bought for an underlying asset at a small amount of the price of the asset in the spot market by paying a forthright premium. The amount paid as a premium to the seller is the cost of entering an options contract. We have to know some fundamental terms like In-The-Money, Out-Of-The-Money & At-The-Money. We need to examine you may be tackle with any of these situations while trading options:
  • You will get surplus by practicing option.
  • Out-of-the-money: You will make no profit by practicing the option.
  • A no-profit, no-loss situation in the event that you can decide to practice an option. A Call Option is ‘In-the-money’ when the spot price of the advantage is higher than the strike price. A Put Option is ‘In-the-money’ when the spot price of the advantage is lower than the strike price.
How the premium pricing is arrived?

The price of an Option in the Premium is controlled by two variables they are intrinsic value and time value of the option.

 

  • VALUE: It is the distinguish between the strike price of an option & cash market spot price. It can either be positive (on the off chance that you are in-the-money) or zero (in the event that you are either at-the-money or out-of-the-money). A profit can’t have negative Intrinsic Value.

 

  • TIME VALUE: The time value is the time left between the present date and the expire date of contracts.

For example: Contract A is longer than Contract B, Contract A has higher Time Value. Because of the contract value with longer expiry date which gives the holder more adjustable on when to exercise their option. This more extended time window brings down the risk for the contract holder & keeps them from arriving in a tight spot. Towards the start of a contract period, the time evaluation of the contract is high. In the event that the options remains in-the-money, the option cost for it will be high. If the option goes out-of-money or stays at-the-money this influences its intrinsic value, which gets to be zero. In such cases, just the time value of the contract is considered & the option value goes down. As the expire date of the contract approaches, the time evaluation of the contract falls, contrarily influencing the option price.

How the premium pricing is arrived?

The price of an Option in the Premium is controlled by two variables they are intrinsic value and time value of the option.

 

  • VALUE: It is the distinguish between the strike price of an option & cash market spot price. It can either be positive (on the off chance that you are in-the-money) or zero (in the event that you are either at-the-money or out-of-the-money). A profit can’t have negative Intrinsic Value.

 

  • TIME VALUE: The time value is the time left between the present date and the expire date of contracts.

For example: Contract A is longer than Contract B, Contract A has higher Time Value. Because of the contract value with longer expiry date which gives the holder more adjustable on when to exercise their option. This more extended time window brings down the risk for the contract holder & keeps them from arriving in a tight spot. Towards the start of a contract period, the time evaluation of the contract is high. In the event that the options remains in-the-money, the option cost for it will be high. If the option goes out-of-money or stays at-the-money this influences its intrinsic value, which gets to be zero. In such cases, just the time value of the contract is considered & the option value goes down. As the expire date of the contract approaches, the time evaluation of the contract falls, contrarily influencing the option price.

I saw that the Bank Nifty lots size was changed all of a sudden. Why was this? Were the lot sizes for other contract changes as well?

SEBI mandates that the contract value of all F&O contracts remain between 5 to 10 Lakhs. Due to this, NSE reviews the contract value/lot size periodically (every 6 months), if the contract value of a scrip is beyond this range, there is an upward or downward revision in lot size.

In this review, 17 F&O contracts will have a reduction in lot size and 48 will have an increase.

What is Marked to Market (MTM)?

On contract date, it is the difference of the passage approval and close cost for the day. If there should be an occurrence of carry forward position, Marked to Market is the distinguish of the market price value less yesterday’s end cost.

What is derivatives markets?

Derivatives market is the financial business sector for derivatives, financial instruments like future contracts, which are derived from distinct types of assets.

The derivative market in India similar to abroad, is progressively picking up centrality. Since the time derivatives were presented, their popularity has developed tremendously. This can be seen from the way that day by day turnover in the derivatives segment on the National Stock Exchange.

What is the use of derivatives?

The two most widely recognized advantages attributed to derivative instruments are amount discovery and risk management.

Earn cash on shares:

So you would prefer not to sell the shares that you bought for long -term, however you need to earn money for the short-term process. This market permits you to direct trade without selling any of the share. This type of process is also called as physical settlement.

Advantage from arbitrage:

Arbitrage trading is nothing but buys the share in fewer rate and sells the same in high rate.

Risk Transfer:

The most imperative utilization of these derivatives is transfers the risk from one to another. Risk-averse investors used derivatives to upgrade the safety, while the same risk loving investors like the risks, contrarian trades to increase their profit.

Who are the participants in derivatives markets?
  • Derivative markets is like whatever other financial market and the participants of derivatives markets can be classified into four categories – hedgers, speculators, margin traders and arbitrageurs. They are explained as under:

 HEDGERS: Hedgers are investors with a current or expected exposure to the hidden assets which are liable to price risk. Hedgers utilizes the derivative market fundamentally for the price risk management of asset.

  • SPECULATORS:Speculators are people who take a perspective on the future moves of the markets. They take a perspective whether prices would rise or down in future and as needs be buy/sell the shares to attempt and make an advantage from the future price movements of the fundamental resource.
  • MARGIN TRADERS: Margin traders are the large number of speculators trade use of the payment mechanism to the derivative markets. This is called as margin trading. When you are ready to trade in derivative products you are not at all required to pay the aggregate amount of your position in advance. Rather than you are just required to deposit just a small amount of  total amount called margin. With a small deposit, you have the capacity to keep up a huge unpredicted position. The leverage factor is fixed; there is a limit to the amount you can borrow. The speculators can buy four to five times the amount that his capital investments have permitted him to buy in the cash market. This kind of trade is called settlement.
  • They take positions in financial related markets to obtain riskless profits. The arbitrageurs take short-term and long-term process, in the same or different contracts, in the mean time to make a position which can create a riskless profit.
How to trade in derivatives market?
  • Research: Research is the more important for the derivative market. The techniques are different from the stock market. For instance, you want to buy stocks that are liable to arise later on then you buy a transaction. This would need you to go into a sell transaction in derivatives market.
  • For the requisite margin amount: Stock market rules require you to always keep up your margin amount. You can’t withdraw this amount from your trading account at whatever time until the trade is well-settled. Also, the margin amount may differ as the price changes. So, we suggest you to keep extra amount in your account.
  • Conduct the transaction through your trading account: You have to ensure that your account allows you to trade in derivatives market. If not, inform your broker and get the required services to be initiated. When you do this, you can submit a order either in online or through phone with your broker. Select your stocks and their contract basics amount, the margin requirements, the price of the fundamental shares, and the price of the contracts. You have to pay a little amount of money to buy the contract. You have to hold up until the contract is schedule to be expired to settle the trade. You can pay the full amount or you can entre in opposing trade.

For example, you put a “buy trade” for Infosys futures at Rs 5,000 a week prior to expired. If you leave the trade before, you can put a ‘sell trades’ future contracts. On the off chance that this amount is higher than Rs 5,000, you can get profit or else, it may end up with loss.

What are stock futures?

Stock futures are derivative contracts that give you the ability to buy or sell a contract of stocks at a fixed cost within a specific date. When you want to buy the contract, you are committed to maintain the terms and conditions.

             Characteristics of future contracts:

  • Contract size: In the derivatives market, contracts can’t be traded for a isolated share. Rather, every stock future contracts comprises of a fixed and lot of the basic share. The span of this lot is controlled by the exchange markets on which it is traded on.

 For example: A Reliance Industries Ltd.,want to buy future contract has a lot of 250 Reliance Industries Ltd shares, i.e., when you buy one future contract of Reliance Industries Ltd, you are really trading 250 shares of Reliance Industries Ltd.

  • Expiry: All 3 maturities are traded at the same time on the exchange and failure on the last Thursday of their individual contract months. On the off chance that the last Thursday of the month is an occasion or any formal holiday for exchanges, they expiry on the previous business day. In this way as close month contracts expires, the middle-month (2 months) contracts get to be close in a month (near-month)(1 month) contracts and the far-month (3 month) contracts becomes middle-month contracts.
  • Duration: Contract is an agreement for transactions. How long away future contract is chosen by the contract duration. Future contracts are available in duration of one month, two months & three months. These are called as near month, middle month & far month respectively. When the contracts expire, another contract is presented for each of the 3 durations. The month in which it expires is known as the contract month.
What are the advantages & disadvantages of futures contracts?

Advantages of future contracts:

  • The risk is for speculators.
  • Gives idea to the traders about the futures price of a stock or evaluation the index value.
  • Based on the current future value, it helps in determining the future demand and supply of the shares
  • It depends on margin trading, it permits small speculators to participate and exchange the futures market by paying a small margin rather than the whole value of physical property. Then again, you have to know about the risks in future contracts. The principle risk stems from the enticement to speculate unnecessarily because of a high leverage factor, which could open up losses in the same way as it increases profits.
What is the cost of carry model?

The Cost of Carry Model await that the market trends have a propensity to be excellently productive. This implies that there are no differentiation in the cash & future price. This accordingly, removes the arbitrage; there the traders utilize price differences in 2 or more markets. The contract is held till the maturity, so that a reasonable price can be attained. The price of a futures contract will be equivalent to the Spot Price in addition to the net expense caused in carrying the asset till the maturity date of the futures contract.

futures contract  = Spot Price + (Carry Cost – Carry Return) Here Carry Cost suggest to the cost of holding the asset till the future contract evolve. This could include storage expenses, interest paid to secure and hold the asset, financing charges and so on. Carry Return refers to any income got from the profit while belongings it like dividends and so on. A net of these 2 is known as the net cost of carry. The primary concern of this pricing model is that keeping a position open in the cash market can have benefits or losses.

What is the expectancy model of futures pricing?

The Expectancy Model of future pricing states that the future price of an asset is fundamentally what the spot price of the asset is relied upon to be in future. That is, if the overall market towards a higher price for an asset in future, the future price of the asset will be increase and profitable. Same way, if the market fell down the future price of asset also in loss. Not at all like the Cost of Carry model, has this model trusted that there is no relationship between the current spot price of the asset and its future price. Only difference is what the future spot price of the asset is relied upon in future.

What is initial margin?

It is the base rate of the contract value required to be stored by the individuals/customers to the trade before starting any new purchase or sell position. This must be kept up for the duration of the time their position is transparent returnable at conveyance, activity, expiry or closing out.

What is Stop Loss (SL)?

It is a request to restrain a investor’s loss on the position he holds. By putting in a Stop Request, Investor really set a loss level which the investor is willing to attempt.

What are the Prerequisites of trading?

Resident: Indian PAN

Related Bank investment account

Trading Account

What are the Prerequisites of trading?

Resident: Indian PAN

Related Bank investment account

Trading Account

Share bazar online | commodities

Frequently asked questions Commodities

What is a commodity market?

It is a market that exchanges primary products instead of manufactured products. Soft commodities are horti-cultural product, for example, wheat, espresso, cocoa and sugar. Hard commodities are mined, for example, gold, silver and  crude oil etc. Investors’ accesses around worthy commodity markets worldwide with absolutely financial transactions progressively overshadow physical trade which traders are conveyed. Futures contract are the most seasoned method for putting resources into products. Future are secured by physical asset.

Why invest in commodities?

Diversification: Commodity returns have verifiably had low or negative connections with the profits of other significant assets, and may be utilized to differentiate a portfolio. Different variable remain same, differentiated portfolios with low total correlation have a tendency to have lower expected of profits. Thusly, expansion may enhance risk balanced returns. Transparent: The transparent is the huge cooperation has guaranteed commodity futures.

 

  • Simple: Product exchange is about the simple financial aspect of demand & supply. More the demand for a commodity to higher is its cost and vice versa Trade on Low Margin: Commodity trading are required to store low margins, around 5 to 10% of the aggregate estimation of the contracts, much lower contrasted with other assets classes.Inflation protection.
  • Changing macroeconomic variables tend to affect items uniquely in contrast to other budgetary items. Cost of goods and services arise in pair with input cost, while cost of stock and bond tend to delay due to rising commodity costs which put more important on the wealth and lower the estimation of futures cash flow.
  • Wide Participation: The online exchanging stage and the transparent policy strategy has pulled in a wide support in commodity market.
  • Reasonable Pricing: The evaluating characterizes for commodities would be more handy practical and less nonsensical prompting to Fair Price Discovery Mechanism in light of the quantity of members in the market.
  • Hedging: It gives a stage to makers to hedge of their positions as indicated by development of the prices of the commodity..
What are the tradable commodities?
  • Bullion: Gold and Silver
  • Oil and Oilseed : Soy Seeds, Castor Oil, Castor Seeds, Soy supper, Crude Palm Oil, Groundnut Oil, Mustard Seed, Mustard Seed Oil,Refined Soy Oil, Cottonseed Oilcake, Cottonseed.
  • Savour: Pepper, Red Chili, Jeera, Turmeric, Cardamom.
  • Metals: Steel Long, Steel Flat, Copper, Nickel, Tin, Steel, Aluminum, Zinc ingots
  • Fiber : Kapas, Long Staple Cotton, Medium Staple Cotton
  • Beats: Chana, Urad, Yellow Peas, Tur, Yellow Peas Grains: Rice, Basmati Rice, Wheat, Maize, Sarbati Rice, Jeera
  • Vitality: Crude Oil, Natural Gas, Brent Crude
  • Others: Rubber, Guar Seed, Guar gum, Cashew, Cashew Kernel, Sugar, Gur, Coffee, Silk, Sugar.
What is a futures contract in commodity market?

Future Contract is a kind of forward contract. Futures are trades exchanged contract to sell or purchase standardized financial instruments or physical items for transportation on a pre-decided future date at a agree cost.

What are the charges in commodity trading?
  • Brokerage
  • Service Tax as per the rates applicable
  • Exchange Transaction Charges
  • Stamp Duty: As per State Law
Who regulates the commodity market?

SEBI which regulate the stock market & the Forward Markets Commission (FMC), which regulates the commodity markets.

Which are the major commodity exchanges in india?

There are 24 commodity trades in India. There are 3 national level commodity trades to exchange all allowed commodities market. They are:

  • Multi Commodity Exchange of India Ltd, Mumbai (MCX) www.mcxindia.com MCX is a free and demutualised multi thing trade. MCX highlights amongst the world`s main three bullion trades and main four vitality trades. Its key shareholders are Financial Technologies (I) Ltd., State Bank of India and its partners, National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Ltd. (NSE), Fid Fund (Mauritius) Ltd. – a member of Fidelity International, Corporation Bank, Union Bank of India, Canara Bank, Bank of India, Bank of Baroda, HDFC Bank and SBI Life Insurance Co. Ltd.
  • National Commodity and Derivative Exchange, Mumbai (NCDEX) ncdex.com A consortium of establishments advances NCDEX. These incorporate the ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSE).
  • National Multi Commodity Exchange of India Ltd, Ahmedabad (NMCE) nmce.com It is the first demutualised electronic multi-commodity Exchange of India. Some of its key promoters are Central Warehousing Corporation (CWC), National Agricultural Co Operative Marketing Federation of India Limited (NAFED), Gujarat Agro Industries Corporation Limited (GAIC) and Punjab National Bank (PNB).
  • National Spot Exchange Limited (NSEL) National Spot Exchange Ltd (NSEL) is a best in class electronic, demutualised commodity spot market. The Exchange is advanced by Financial Technologies (India) Ltd (FTIL) and National Agricultural Cooperative Marketing Federation of India Limited (NAFED).
What is a forward contract in commodity market?

A forward contract is an understanding for conveyance of goods or the underlying asset on a particular date in future at a cost incurred on the date of contract. Under Forward Contracts (Regulation) Act, 1952, every one of the contract for conveyance of products, which are settled by installment of cash contrast or where conveyance and installment is made following a time of eleven days, are termed as forward contract.

Can I take delivery of the commodity?
  • A settlements happen either through squaring off your position or with money settlement or physical delivery. Squaring off is taking an inverse position to the beginning position, which implies on account of a unique purchase get a investor would need to take an sell contract.
  • Investors who plan to plus or minus delivery would need to advise his agent of the same before they begin of delivery time. In the event of delivery, a stockroom receipt will be given. Delivery is at the option of the seller, a buyer can take delivery just if there should arise an occurrence of an eager seller. All unmatched/rejected/excess position are money settled, every single open position for which no delivery data is submitted are additionally money settled. Under money settlement, the different between the contract cost and settlement cost is to be paid or got from them. In online commodity exchange, customers can’t go for delivery option and all positions are cash settled.

Share bazar online | Demat account

Frequently asked questions Demat Account

The key advantage of participating in a depository?

The key advantages are:

  • You need to eliminate the risk which is usually associated with physical securities such as pilfering, fraud securities, damages..etc.
  • One can transfer the securities immediately.
  • Stamp Duty is not applicable on securities transfer.
  • Paperwork will reduced seriously as everything gets updated in online.
  • When there is a change in the address recorded with DP the same gets updated with all the brokers where the investors holds the securities
  • Transaction cost also gets reduced.
  • You can nominate.
  • Even transmission is also done by depository participant thereby correspondence with brokers eliminated.
  • All in one account where it is investment in equities, government securities and debt instruments.
  • Share issues will get automatically transferred to the Demat account.
What are the facilities client can enjoy in a DP account?

Facilities in a DP account are the following:

  • De-materialisation which means conversion of physical share certificates into electronic / online form
  • Re-materialisation which means conversion of electronic demat from into physical share certificates.
  • It helps in re-purchase of mutual funds units.
  • It settles the trade through online procedures.
  • It facilitate the pledging or hypothecation of de-materialized securities
  • In the public issues it enables electronic credit of securities.
  • Non-cash benefits such as bonus from securities are automatically credited into respective accounts.
  • One can also block a demat account so that the debit can be stopped
  • Nomination will be possible in there accounts.
  • Facilities related to change of address is possible with atmost ease.
  • Facilities such as stock lending, borrowing options, debt instrument holdings ..etc
If I have to change the signature, what will be the procedure?

A request in writing has to be submitted to us. Your signature has to be attested by your banker in whose bank the dividend is credited into accounts.

If I have physical share certificates with different sequence of names of me and my spouse what should be done in such case?

In such cases you can open only 1 account with your name or in your spouse name as the account holder and then you may apply for de-materalization.

Is it mandatory to give my bank account details during account opening?

Yes it’s mandatory to share your bank details. And more over your bank account number will be mentioned on the interest or dividend, warrant you are authorize to receive – in this way it help.

Is it possible to change the details of my bank account?

Yes it’s possible. You can give us a request with the bank account details in desire requested format and same will be updated in the DP and Trading Account.

Is it possible to add or remove account holder or change ownership priority?

A demat account does not allow you to do this so . If you may prefer you can open a new account and transfer the share to the new or exist account.

If my address gets changed should I update to all the brokers/companies of which I hold share?

You need not inform to all the companies you just have to intimate your DP who will take care of the rest. The address gets automatically updated with all the companies/brokers you hold share.

Can I make use of the nomination facility?

Nomination can be used only by individual holding account, singly or jointly. Non-individuals like corporate, partnership firm ..etc cannot nominate.

Can Joint account holders nominate?
Yes they can. In case of the death of a holder the ownership will be transferred to the next holder. When all holders are dead it is transferred to the nominee in the account which is given.
Is it possible for a minor to nominate to this trading & demat account?

No it is not possible.

Who is eligible to be a nominee?

A nominee has to be an individual. It cannot be add a nominee to non-individual like partnership firm, karta, power of attorney etc..

Is it possible for a minor to be a nominee in trading and demat account?

Yes, it’s possible. A minor can be a nominee in such cases the guardian has to give his documents.

Possible to have more than one nominee?

YES, it’s not possible. You can add 3 nominee is allowed per account.

Can be possible to make separate nomination for every securities held in a depository account?

No it’s not possible. Nomination can be made only account wise and definitely not on securities wise.

Can we add NRI to be a nominee?

Yes it’s possible for a NRI as a nominee but it will as per the regulations in effect as per the exchange norms.

What is the procedure for nomination?

The procedure to nominate is in two simple step :

  • Filling of nomination form with nominee details in the nominee form.
  • The nominee has to sign the form and attach the photo & share the contact details. In case of minor, guardian details have to be besides submitted.
Can I change a nominee?

Yes, it’s possible change a nominee by filling the nomination form, with a request stating the change with the current nominee details submitted.

When does transmission happen in demat accounts?

If a holder is deceased his shares are transferred to the living holder / nominee by submitting relevant documents this process of transmission is really very simple and easy with DP.

When an account holder is departed, how can the nominee commence the transferral process to his name?

In case death of an account holder, the nominee has to submit required documents like transfer form, notarized copy of death certificate, and affidavit as per the requested format. After inspection is done from the DP will initiate the transmission of the shares.

Is it possible to have an account with a nomination and what will happen to the account after the account holder is departed?

Yes it’s possible that account holder may not mention any nominee. But the death of an account holder it will be transferred to the legal heir as decided by the court of law. In case of share worth less than 5 lacs with relevant document submission like letter of guarantor, guarantee, affidavits and no objection certificate.

Can you explain the procedure for transferral in case of Joint Accounts?

When the surviving account holder submits the transmission form and a notarized copy of the deceased account holder he can claim the same. You have to make sure the surviving holder his / her name mentioned in the same method as mentioned in the account.

What is the meaning of de-materialization?

De-materialization is the process in which the physical share certificates are converted into electronic form which can be done by submitting a Demat Request Form to the DP with all the requested all the details need to be filled.

Is it possible to de-materialize any share certificates?

You can be allowed to de-materialize only those share which are registered in your name and its listed securities admitted for de-materialization at CSDL.

Precautionary measures to be taken while defacing a share certificate?

It has to be de-materialized before it’s vandalize therefore taking due care is necessary with the DP before doing so.

How much time does it take to dematerialize?

It’s usually take 30 days for dematerialization process to complete..

How much time does it take to dematerialize?

It’s usually take 30 days for dematerialization process to complete..

How to demat share with Pre-marital or maiden name?

If you may prefer so then you will have to submit original marriage certificate along with the Demat Request Form with specimen signature.

What are the different type of securities available for de-materialization?

The different types are as follows :

  • Share, bond, debenture, debentures stock, scripts, or other marketable securities of similar nature of any incorporated companies or body corporate including underlying share of ADRs(American depositary receipts) and GDRs(Global depositary receipts).
  • Unit of mutual fund and certificate of deposits, rights under collective investment scheme and venture capital fund, commercial papers, securitised debts, money market instrument and unlisted securities are the securities available for de-materialisation.
What is the DIS annexure that I have to submit in order to sell my shares off market. I didn’t have to submit this for my earlier transfers, why is it required now?

As per CDSL norms, In case of Off-market where the reason of transfer is a sale, as a Depository participant, it is mandatory for us obtain following payment details in the DIS from the client.

 

a) Payment Mode

b) Bank Account Number

c) Bank Name

d) Branch Name

e) Transferee Name

f) Date of Issue / Transfer

g) Cheque / Reference Number

Possible to De-materialize my shares which are pledge in bank who is also a DP?

Yes it’s possible to de-materialize your share with the permission of your brokers

Is it possible to ‘De-materialize’ odd lot of shares?

Yes it’s possible to de-materialize odd lot of shares.

What does Re-materialization mean?

‘Re-materialization’ is the process in which the de-materialized share in electronic format are transferred to physical form which happens with the help of a ‘Remat Request Form’ (RRF) filled and duly signed by the account holders.

What do these word mean ‘ Market Trade’ and ‘ Off-Market Trade’?
  • ‘Market Trade’ are those trade where in the trade have taken place with the involvement of a clearing corporation. These type of trades are done by stock broker on a stock exchange.
  • ‘Off-Market Trade’ are those trade which are done between the two party directly without the involvement of the clearing corporation.
  • in either cases same Delivery instruction (DIS) slip is used.
What types of settlement are required on the delivery instruction slip(DIS)?

It is always occupied by the market type and the settlement number. You just got to mention the appropriate settlements details as required in the contract note given by the brokers.

How would I be getting my cash allotment in the form of dividends and interests to my account?

All the companies of which you are a shareholders do hold the details of your bank account which is as per your demat account. And all the profit gained are transferred to your account directly and automatically whenever such cases arise.

Then how my bonus shares or other non-cash allotment benefits reach me?

All the non-cash benefits are passed to your CDSL depository or NSDL depository account directly whenever such benefits are to be transferred to you.

Who will an investors confirm that the bonus / rights allocation are credited to his account?

The issuer R&T agent who issues bonus / right allocation will send an allotment information to the investor and the DP will share a transaction statement carrying the same. The investors can compare both and confirm.

How to suspend my account?

Yes it is possible to suspend the account against any further debit. And no further debit will be permitted till it is frozen. Only after a request letter is given it will be un-freeze.

Does it become necessary to have a depository account if I apply for shares in Rights Issue / IPO(Initial public offering)?

It is not necessary to have a depository account in case if you applying for shares in Rights Issue / IPO(Initial public offering). But however it is most recommended through demat account which is very safe and fast and you can avoid the losses caused due to physical damages,masslending, bad deliveries, fake, theft.. etc

Possible to have the other shares in my same demat account?

Yes it is possible to have other shares in the same demat account.

Possible to buy and sell shares through trading ?

Yes it is possible to buy and sell shares through trading in the most easy way. And we welcome you to do so.

Can we dematerialize all my securities through the same account?

Yes it’s possible to dematerialize all your shares through the same account provided the account holder details are the same.