Short Term Share Trading

[Saurav 22]

Dear All,

Till dae i have been a long term investor. I purchased shares for a long term period just purchased and slept.....

I have not sold any share till date but only purchased.

Now I want to be become a daily trader and make daily profits. What before i start I need someone to guide me all charges relted with the purchase like Brokerage, Tax etc

eg I purchased X shares for Rs 10,000/- and next day I sell them for Rs 10, 600/- making a profit of Rs 600/-. What will be my actual profit?

ie profit after after deducting brokerage chages, Tax & Misc etc.

I am thinking to opt for HDFC Online Trading. Pls guide...

[tanveer 59]

Share your tips and tricks with me too. I have never invested but was thinking of taking a plunge but the market fell drastically just as I was about to/

[Saurav 22]

is there an difference in Tax or brokerage if Trading is done on name of a senior Citizen (Parent).

[savramesh 37]

i enquired Religare for online trading 2 days back, they charge 0.25 % brokerage.. they charge 2999 for opening an account for online trading.. they will return 2500 back to us as we do transaction ie buy or sell shares.. ie they return the brokerage till 2500..

i need to clarify the following doubts from them tomorrow

1. we buy shares from whom? directly from the company or from religare or from other customers who are selling their shares ??

2. when we sell our shares who will buy from us ? the company itself or religare or other customers who wish to buy shares?

[rsalecha 0]

i enquired Religare for online trading 2 days back, they charge 0.25 % brokerage.. they charge 2999 for opening an account for online trading.. they will return 2500 back to us as we do transaction ie buy or sell shares.. ie they return the brokerage till 2500..

i need to clarify the following doubts from them tomorrow

1. we buy shares from whom? directly from the company or from religare or from other customers who are selling their shares ??

2. when we sell our shares who will buy from us ? the company itself or religare or other customers who wish to buy shares?

Just wanted to reply to your queries. here is 10 point intro to Stock Market.

1. First of all Shares are traded only in Stock Exchanges like NSE, BSE, KSE and so on...

2. There are lakhs of shareholders doing daily buying and selling of more than 5000 scripts on daily basis.

3. If you are new - go for the most liquid stock (i.e. Huge nos of Buyers and Sellers on NSE or BSE atleast).

4. After an IPO is released the Stock are available for trading in this stock exchange also known as Secondary Market.

5. So when you buy or sell - the seller or buyer is someone else who is interested.

6. To buy and sell in secondary market - you need to be either member (i.e Broker) or deal through a broker.

7. Religare / HDFC Sec/ Sharekhan / Angel Broking / ICICI Sec are all different kind of brokers that enables you buy and sell - for which they take brokerage.

8. They all have different brokerage and AMC and Demat charges.

9. As you buy and sell, your stock balance is reflected in your Demat Account maintained by the broker.

10. Nifty / Sensex are indices - set of few shares comibinations that tells you the general movement of then Exchange. NSE has Nifty of Fifty scipts and BSE has Sensex of 30 scritpts.

Hope you enjoyed this brief intro...

[Saurav 22]

What is the difference between

Equity Cash N Carry order & Equity Margin order?

[Saurav 22]

One ore Q

There is something Intraday trading..

I buy & sell the share on same date. At the end I have to pay or get only the difference. How can I place such an order?

[savramesh 37]

thanks for the information..

[Saurav 22]

Does HDFC provides day trading ie buying & selling on same day without delivery.

[Saurav 22]

ICICI Direct is offering WAP Trading, Trading on Move.

Does HDFC offers same?

[phonegeek 588]

ICICI Direct is offering WAP Trading, Trading on Move.

Does HDFC offers same?

Hi,

I am doing short term as well as long term trading for last 5 years. Though due to time constraint, my volumes are not so high. In last 5 years, I have traded through Sharekhan, Religare and Angel broking. I feel ICICI and HDFC are both very expensive as far as account opening charges and brokerage charges are concerned. Better start with Sharekhan or Angel which have good facilities with reasonable charges.

Both are charging around 100 bucks for account opening.

I will not recommend Religare due to their poor services.

I hope this helps !

[city02 63]

i use hdfc sec but their website s**ks hard.

i mostly end up phoning in my orders.

i have to setup my own excel worksheet to track my avg cost basis & update over the net.

hdfc can't always tell me the avg cost for stocks that were bought over a year ago or an IPO allotment.

since i'm not a day trader, i rarely place market orders [immediate execution at current price]

i mostly do limit orders and try to keep the ticket size over rs. 5 k since the min fees is rs. 25/- or 0.5%

e.g., if the price is currently rs. 123.45, i would place a buy limit of 50 shares @ 120/-

or a sell limit @ 125/-

whenever the price falls below my avg, i try to lower my avg cost by buying some more as long as it is a liquid script and a stable/known company which won't fold up in a few weeks/months

my biggest issue with indian stocks is that limit order expire at the end of the trading session

unlike the US where you can place them for 30-60 days [fire & forget]

this encourages longer term investors to put floors & ceilings on their gains/losses without resorting to options

i also wish someone would introduce ETF [exschange traded funds] that are linked to well known indices like

BSE Realty so we did not have to buy individual stocks of multiple companies just to get exposure to a particular sector

these are different from realty mutual funds due to their greater transparency and control

[this is true of all index based funds which are considered 'passive' vs. actively traded funds in general]

[phonegeek 588]

i also wish someone would introduce ETF [exschange traded funds] that are linked to well known indices like

BSE Realty so we did not have to buy individual stocks of multiple companies just to get exposure to a particular sector

these are different from realty mutual funds due to their greater transparency and control

[this is true of all index based funds which are considered 'passive' vs. actively traded funds in general]

They are available !!

ICICI prudential SEnsex fund(SPICE fund)

Kotak Sensex Fund

Other are also there, look here choose category as "ETF"

Edited February 9, 2009 by saurabh159

[ssr 10]

my biggest issue with indian stocks is that limit order expire at the end of the trading session

unlike the US where you can place them for 30-60 days [fire & forget]

this encourages longer term investors to put floors & ceilings on their gains/losses without resorting to options

me too feel same 

[ACS 130]

Just wanted to reply to your queries. here is 10 point intro to Stock Market.

1. First of all Shares are traded only in Stock Exchanges like NSE, BSE, KSE and so on...

2. There are lakhs of shareholders doing daily buying and selling of more than 5000 scripts on daily basis.

3. If you are new - go for the most liquid stock (i.e. Huge nos of Buyers and Sellers on NSE or BSE atleast).

4. After an IPO is released the Stock are available for trading in this stock exchange also known as Secondary Market.

5. So when you buy or sell - the seller or buyer is someone else who is interested.

6. To buy and sell in secondary market - you need to be either member (i.e Broker) or deal through a broker.

7. Religare / HDFC Sec/ Sharekhan / Angel Broking / ICICI Sec are all different kind of brokers that enables you buy and sell - for which they take brokerage.

8. They all have different brokerage and AMC and Demat charges.

9. As you buy and sell, your stock balance is reflected in your Demat Account maintained by the broker.

10. Nifty / Sensex are indices - set of few shares comibinations that tells you the general movement of then Exchange. NSE has Nifty of Fifty scipts and BSE has Sensex of 30 scritpts.

Hope you enjoyed this brief intro...

Lets continue with few more basic points:

11. First of all, medium-long term trading makes more sense. You actually invest in a Company as a shareholder & expect annual dividends/bonuses in return. You also enjoy having a say in the decision making depending on the 'share' you hold. Daily trading is like gambling.

12. There are crores of ppl sitting on stock markets, Bullion, Forex, commodity markets for short gains. Among these group of ppl, many gain on others expense & vice versa. Basically there's no productivity coming out of this exercise.

13. Governments have officially re-named this kind of activity from Speculation to 'Trading'. They try to make some sense & some Transaction Tax out of this overall non-productive exercise.

14. Brokers also take a cut from Buyers/Sellers involved in this activity. They gain anyways, unless wrongly invested themselves.

15. Mututal Funds/FII's are the real giants cum profit makers who play on the basic economic principles of Demand & Supply. They buy heavy, we all follow & buy.. then they sell & we crash. But all this while till 2008 when ppl were making profits - "Samajh mein kuch nahi aata hai, bus behti ganga mein haath dho lete hain.."

So when the West went into recession, these guys have pulled out their 'mutual fund' money out of India to help their Principles & we are missing their powerplay as the Sensex tumbles.

16. Q1, Q2, Q3, Q4 results of a Company make lesser contributions to upswing & downswings.. Market speculations & the external environment contribute heavily. What irony!

17. They used to say that the Stock Exchange is the actual Economic/Health indicator of a Country.

Thats's why when it grew by 500% from 2004-2008, we just grew by about 9-10% anually.

As it recently fell by 50% last year, we therfore project GDP growth at 6-7% ?

18. Many Banks/Institutions/Organisations have gone bankrupt mainly due to exposure towards Stock Market. Bad Debts are smaller issues comparatively. Except Citibank, maybe.

19. News channels running bloomberg have surprisingly grown from 2 to 10. All the so-called experts never discussed the above points. Its heart-burning to see everybody talking about this un-productive activity whole day & make no sense out of it actually.

20. When ppl were making money during the upswing, nobody bothered about Regulation etc. Today they talk about controlled movement.

21. Rahul Bajaj (Bajaj Holdings) is the single largest individual share holder of ICICI Bank (about 20%). He lost 2000 Crore during the dowturn. Now he seems vociferous about the so called 'loss' & demands controlled movement of the market.

22. Ambanis were in the paper for being the Richest in the World sometime recently.. What an embarrassment for the nation now! 'Notional Wealth' was the culprit perhaps.

23. Crude Oil reached $140 a barrel & fell down to $40 due to this.. Gold is no more affordable due to this.. But then why are only essential Commodoties banned from trading? Why not all of these?

Sensex itself has fallen flat off late.. when are we going to question the fundamentals of such kind of 'Trading Activity' ?

Well, to make myself clear at the end.. ive not tasted sour grapes yet. i.e. till date never invested in Stocks.

But always wanted a debate on this.. In fact i was going to start a new Topic on this Forum long back.

But short trading seems to be more of a Culprit rather than blaming 'all kinds of Trading' entirely.

Lets not have a 'herd mentality'. Its time to think out of the box.

[Saurav 22]

I am 100 shares of RCOM purchased 2 yrs ago. Now if I purchase 20 new shares of RCOM & sell 20 shares will I have to pay short term gains tax?

[phonegeek 588]

I am 100 shares of RCOM purchased 2 yrs ago. Now if I purchase 20 new shares of RCOM & sell 20 shares will I have to pay short term gains tax?

NO, for shares, holding period to determine short term or long term capital gain is one year, in your case, its more than 1 year and eligible for long term capital gain but further long term capital gain tax on shares is currently exempt, so you dont have to pay anything !!!

[KumaarShah 143]

@saurav,

Check with your CA for more precise info.

IMHO, to avoid problems with the taxman, I think you should first sell 20 shares from your existing 100 and then purchase the same 20 shares to enjoy LTCG benefit. I do not know if I am wrong, others with more knowledge on this may please advise here.