Overview of Stock Market Operations
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Manikandan Ramalingam
• Started getting into Stock Market back in 4th year of my College (2005)
• Started a Blog and then bse2nse.com (2010)
• Authored “Art of Stock Investing” - (2011)
• Started a YouTube Channel (2012)
• Became a Partner for RK Global (2012)
• Got an Invite from Zerodha to become a Partner (2012)
• Quit my IT job (2014)
• Took Zerodha Chennai Branch (2014)
• Book will be published again in Physical Copy by “Notion Press” in English ,
Hindi and Tamil (2020)
Basic Stock Market Structure
IPO Listing Process
What are the Key Take Aways
• Company – Stock Market is the largest Fund Raising Platform
• Investors - It’s a good place to build a Long Term Portfolio, where one
can reap benefits of being a part owner of a Business / Economy
Investing in the Index ETF like N100, BankBees, NiftyBees is a good place to
start
Role of a Depository - maintenance of ownership records
SnapShot of my CDSL Holdings
My Stock Holdings Page in Zerodha
Types Of Orders
Various Segments
• Equity (Intraday or Delivery)
• Futures and Options (Intraday or Hold till Expiry)
• Commodity – Futures (Options recently introduced)
Margin Requirements
• Equity Delivery – Need to pay in Full
• Equity Intraday – You get leverage up-to 20X (This is getting revised
lower to around 4X by recent SEBI Regulations)
• Options and Futures Intraday – You get leverages up to 50X
• Options and Futures Overnight – You get leverages of around 20X
(Due to high risk to Broker)
Risks Of Being a Broker
• Initial Margin required to Enter a Trade covers Risk only to a point
• If a Trader Enters a Un-Limited Risky Trade (Naked Trade) and Market
moves Big against him - There is a possibility where the Trader
account may go into Negative also
• On such Rare event – if the Trader fails to pay up to cover the negative
Balance – the Broker has to settle it
• This happened recently during the Crude Futures Crash
• So a Broker may choose not to provide leverage when VIX is high
Brokerage
• A Broker charges for every Transaction or Trade done by a client and
its called Brokerage
• Brokerage Charges can vary from Broker to Broker
• Discount Broking is a Term given to Brokers who charge a flat fee
• Traditional Brokers used to charge Brokerage as a % of the Transaction
Value
What is a Index
• Purpose of Index like Sensex, Nifty for India, Nasdaq for US was to
compare the Economic Performance of Respective countries
• Brokerage Charges can vary from Broker to Broker
• Discount Broking is a Term given to Brokers who charge a flat fee
• Traditional Brokers used to charge Brokerage as a % of the Transaction
Value
Index Components
• Index Components are selected by
the Exchange
• There is a backup index called Nifty
Next 50
• Companies get replaced in and out
of the index
• Weightage changes as the share
price of a company changes
Index ETF
• Index ETFs are Safer to invest – than trying to invest in individual
companies directly
• Index ETFs have many simple inbuilt advantages
They are not emotionally attached to any one company
They ruthlessly follow the index component weightage
• N100 , NiftyBees, BankBees
IPO Listing Gains
• IPOs with more than 10X demand normally yield listing gains
• These demand numbers are updated on NSE website on a hourly
basis
• Currently Ongoing IPO - Mindspace Business Parks REIT
Understanding Big Waves and Small Waves
Zerodha Demo
• Entry Order Placement
• SL
• Target Order
Thank You
