I have a few simple questions?

#1
hi there.
I am new to all this. I have been studying about the stock market for the past few months and I have decided to try it. I am interested in day trading. I have a few questions:

1>> Suppose I have have Rs10000 as capital and I invest all of it on Company ABC today. How soon can I sell it and purchase another share of Company XYZ. If it takes a lot of time say a few days, why so?

2>> Suppose I make a gross profit of Rs1000 today, how much would I actually get after deducting all possible charges and taxes? are there any certain tax or charges that are not predictable?

3>> As I am a begineer, and also interested only in day trading. I want a broker who is reliable and provides good performance and practicality even if they charge higher so which Brokers do you suggest??

4>> HDFC and ICICI say they have seamlessly integrated all three accounts(saving/open, demat and trading). I want to know in what way this is going to help?


Thankyou.
 
#2
hi there.
I am new to all this. I have been studying about the stock market for the past few months and I have decided to try it. I am interested in day trading. I have a few questions:

1>> Suppose I have have Rs10000 as capital and I invest all of it on Company ABC today. How soon can I sell it and purchase another share of Company XYZ. If it takes a lot of time say a few days, why so?
If you are interested in Day Trading, then you will have to sell it on the same day. You will have to choose the timeframe depending upon how much profit/loss that you can take.
In case of intraday, you can sell it at any time, BUT, before 3.30 PM or whatever time your broker specifies to square off the intraday trade.

In case of delivery it takes T+2 days for the shares to reach your demat account after the settlement process.

There is also BTST, where you can sell the shares tomorrow, which you bought today. Check with your broker.

2>> Suppose I make a gross profit of Rs1000 today, how much would I actually get after deducting all possible charges and taxes? are there any certain tax or charges that are not predictable?
Refer - Charges-other-than-brokerage-stock-exchange-transactions

3>> As I am a begineer, and also interested only in day trading. I want a broker who is reliable and provides good performance and practicality even if they charge higher so which Brokers do you suggest??

4>> HDFC and ICICI say they have seamlessly integrated all three accounts(saving/open, demat and trading). I want to know in what way this is going to help?


Thankyou.
Refer - Brokers-trading-platforms
 

d_s_ramesh

Well-Known Member
#3
First advice, don't attempt day trading with 10K. It will vanish in thin air very soon. Start taking positional calls, have stop loss for every trade. Like how you don't go out without your clothing, a trade cannot be open without a stop. Risk a small percentage of your capital per stock, preferably 1 or 2%. Do not have more than 6% is open risk on all your positions put together.

By this you can sleep well, also make consistent returns. Record your trades, learn from every experience. Positional trades can be sold off only after two days from your trade day.

Commissions or brokerage form a considerable part of the expenses in this business. It depends on the broker you choose. ICICI or HDFC charge a little higher, but their concept of integrated accounts is the best I could recommend for a beginner. For a active trader some broking platforms like India Infoline or India bulls will do.

Learn, learn...... learn. Be open to all types of experiences, start observing, question yourself. The answers you get will be unique and totally for you. By doing so you will soon come to know what suits you psychologically, using that knowledge format a strategy, test it, optimize it. Then believe it with strong faith and follow with discipline.

Your road to riches is clearly set. This is a very brief explanation to becoming a trader. I believe this will be useful to many other aspiring new members too.
 
#4
Ok let me get this straight:
If I make a purchase of 100 shares @ Rs 100 each then:
Total turnover=RS(100x100)
=Rs10000
So what ever be my Profit or loss. the charges are all follows:
Brokerage charge+(STT+Transaction Charge+SEBI+Stamp duty+Sevice charge)
So what I actually get will be= total profit-{all the charges}

Am I correct? Which brings me to another question. Please observe the chart.


Can you please tell me what is RATE, SERVICE TAX and EFFECTIVE RATE ?
Are they going to be charged all at once for eg: Transaction charge= rate+Service Tax+effective rate?
Am I correct?

Thanks for your help guys.
 

d_s_ramesh

Well-Known Member
#6
Effective rate is what you are going to be charged. The chart display is to show that they charge what they say as their charges only and not service tax or anything else. It is assumed that the effective rate includes all the government levies.

A broker can keep off from charging you anything, but the government doest do that way. Every one has to pay the necessary levies. It is that the broker pays and takes the same from the charges he levies to you, getting his charges lesser to that extent.

I think I have made it understandable.
 
#7
Hmm, I think I get it now. I guess I will just have to do it to understand every thing.

Ok, I have One finale question. I am going to be a day trader. so I will be buying and selling the same shares by the end of the day. This is what we call square off right? now my real question is when can I use the money I got from selling these share to buy again? The next day or what?
 

d_s_ramesh

Well-Known Member
#8
Whatever is the gain or loss is transferred to your account in cash the same day or to be precise just as the position is liquidated. The cash is yours to trade other positions.
 
#9
ok. thanks a lot for clearing That out!

I got another question.
"Square Off Time" I understand that for intra day trading I have to square off before the square off time which is usually around 15:00 or whatever the broker decides.
I know that I definitely have to square off if I use margin trading or else I face some kind or penalties. But, do I face penalties if I am using only my bank balance? Even if I DID NOT use margin trading do I still need to square off before this time if I do not want to keep stocks overnight?

for Eg: I purchase some share using only my bank balance and the price falls. I am convinced that it will improve a day or two later. Can I just keep the share without squaring off if I DID NOT use margin trading? Please tell me what happens in this case.
 
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#10
^^

e.koren, IF you are going to do Intraday trading then you will have to square off, else the Broker will square off the transaction at the market price.
When you buy shares there will be option to select like - Whether you want to buy shares as Delivery OR Margin OR Intraday.
So, if you buy shares as Intraday the broker will automatically square-off at the cutoff time, i.e. 15:00 or 15:30 (depends upon Broker).

If you think that the price will increase in a day or two, then you will have to transfer the Intraday trade to Delivery (there will be option for this in the trading terminal).