Basic Terminology


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Closing your position the same day you trade in is called Intra day, which attracts lesser commissions. While Delivery is taking the stock to your demat account or a position carried overnight. Here your brokerage will be higher.


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You buy TATASTEEL at 400 per share in the morning, the stock moves up to 415 in the course of the days trading. Well before closing you feel that the profit the stock has generated is enough. You sell your stock the same day at 415.

The brokerage here will be 400 X 0.05% = 0.20 per share on buying and 415 X 0.05% = 0.208 per share on selling. Your profit will be 15.00 - 0.41 brokerage(plus taxes), Rs 14.59 per share.

The same situation, if you are selling the shares after few days or months say for a price of 450 per share. You make a profit of 50 per share, but your brokerage is not the same. You need to pay 400 X 0.75% =3.00 for buying and 450 X 0.75% = 3.38 per share on selling and along with this all the taxes and beneficiary charges will be added.

Both have advantages and disadvantages. Intra day your brokerage is less and the profits are also restricted to that days moves. On delivery you can hold and sell at a better price but have to pay a higher brokerage. As a beginner please get used to delivery trades, learn all the intricacies of the market from every move. Observe your mind and feeling as you go through each trade. Record all your trades, re-visit after few months after closing your positions. Check what is the market doing at present, you can get some strategies from it.

Watch the movements of the market on a daily basis then on the intra day basis, find out which one bests suits you. Formulate a strategy, a plan of action. Test it well, do some optimization. Once you are second nature to your rules and plans, then start trading. You will be greatly successful.

You need anymore resources, please get in touch with me by PM. I think I have made the writeup understandable. Brokerages that I have calculated are of one brokerage house, it may differ from each operator, also depends on your rapport with your broker. Keep in mind, brokerage and slippage are one of the major expenses of this business.


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Thank you....Mr. Bosch, I think I spelled it right.
ya Ramesh.......y r rite
Please explain how to calculate ST,STT,and other taxes with a suitable example....
your previous example was lucid and simple that gave me a clear idea abt I asked ...


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Mr. Bosch,
This questions of yours put me to think, only now that I realize knowing about the percentages would have helped to making others aware. To be frank, I have been trading & investing for the past 20 years, I know all these levies exist, while as I go through my statement I will calculate my commissions adding all these levies and have a total percentage which I feed into my record keeping spreadsheet. Once I feed it there I just don't bother about it until I get suspicious or some new taxes have been proposed by the government.

As they are small percentages, I did not bother about it much. But now I seriously think I should know about it. You will come to know of it as you trade, if you have doubts, after receiving your contract note, let me know I will surely help you and you know,in the process it will enable me to learn too.

I feel that there is some aura in you that is asking me to have a word with you. Though there were few sentences in your post compared to mine which was enormously elaborate, it shows you have a real passion. Can I have your contact number, just to make our friendship a little better. Please PM me your contact number.

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