Invest And Trade

Equity also commonly known as stock/ share represents the ownership in a company. Owning one share is enough for a investor to the part of that company’s assets and earnings. The returns earned in equity depend upon the profits made by the company, company’s future growth etc

It is a preferred asset class for investment as it provides inflation beating returns compared to traditional asset classes of fixed deposits and bank deposits interest rates.

Equity is listed in the stock exchanges where customers can use these products for trading and investment perspective. Trading is buying and selling on same trading date and investing is buying and holding it for shorter period (Less than 1 year) long term (More than 1 year).

Why Equities?
Equity investors are entitled to receive a dividend from the company. It is one of the main sources of investment income.

Investment in equity offers better returns than traditional investment products like fixed deposit.

Equity is listed on stock exchanges have the benefit of any time liquidity.

Investors can start investing in equity with a relatively small amount of money

Equity Trading Types:

Day Trading (Intraday Trading)
It is the activity of buying and selling with the intent of profiting from price movements in the stock within a single trading day. They are automatically squared off before the market close to avoid overnight exposure risk.

thik    Leverage
thik    No overnight risk
thik    Lesser Transaction Costs

Delivery Trading:
Delivery based trading means buying shares and holding them for certain period of time .The shares that is bought will be credited to the investor demat account of the investor on T+2 day (T being the day of execution of the order) The investor can hold the shares as long as they want with no time constraints until they get the desired profit.

thik    It is useful for medium-to-long-term investors.
thik   Eligibility of corporate benefits announced by the companies like Dividends, Bonus shares ,Rights issues can be availed by the investors if they hold the shares for the longer duration These benefits the companies offers to its shareholders time to time.

Minimum amount to invest in Equity:
Shares are traded in the stock exchanges of price ranging from paisa to thousands. The investors are required to keep the of amount to the extent of transaction value i.e. number of shares that they are going to buy * price per share

For example if investor wants to buy one share of ASHOK LEYLAND of Rs.150, then they have to keep Rs. 150. Similarly for purchase of 10 share of the ASHOK LEYLAND, it will require Rs. 1500. So there is no minimum limit to trade.

PSB offers trading leverages according to the trading product type’s i.e.

Leverages is nothing but buying a stock by borrowing funds for trading / investing from a company to increase the potential return of an investment.

Different types of leverages

Intraday Leverage - Leverage up to 7 times of your initial margin money for equity intraday trading

The initial margin money could be either in the form of cash or exchange approved stocks e.g. If you have account balance credit of Rs.1000, you can buy stocks of value to the extent of Rs.7, 000.i.e Amount required is approximately 15 % of share price.

Delivery Based Trading
T + 2 day - Buy stocks by just paying an exchange minimum delivery margin as on the date of transaction and pay the remaining balance before the stock exchange pay-in date (2nd trading date from the date of transaction).

T + 2 + 5 day (Temporary Funding) - Funding facility @ nominal rate of interest commencing from the 2nd day (from the exchange payment due date) .Facility to hold the positions by maintenance of minimum threshold margin percentage and the balance to be paid on or before 7th day from the date of purchase. The company will honor the payment to the exchange on your behalf on the due date .If the balance payment is not received on or before the 7th day, company shall sell the shares in the market to recover the debit / suspend from further trading.

This facility will empower the customer the extra buying power and to grab the ultra-short term opportunity available in the markets.

Margin Trading Funding (MTF - Long Term Funding)
Margin trading allows you to buy more stock than you'd be able to normally.
It amplifies customer to take exposure in the equity markets over and above their funds to enhance the investment strategy. Customer has to pay initial margin of 50 % (Not less than the exchange prescribed margin) on the purchase value and for the balance value, company will extend loan. The stocks purchased will act as collateral for the loan. MTF is extended against initial margin deposited by the customer which could be either in the form of cash, or by pledging the exchange approved equity shares. This facility is as per SEBI norm.