Equity & Derivatives Trading

Equity shares are nothing but ordinary shares that represents a kind of part ownership for shares. Here a shareholder is a fractional owner who undertakes maximum entrepreneurial risk associated with any venture. The shareholders are also members of the company. Voting rights also vest in them.

An account period settlement is a settlement of trades pertaining to a period of time. In this account, the settlement is done within a day or more. For instance, trades for the period from Monday to Friday are settled together. The obligations for the accounting period are settled on a net basis. Account period settlement has been discontinued ever since January 1, 2002, pursuant to SEBI directives.

You can contact any broker or a sub-broker who is registered with SEBI. He is responsible for carrying out your entire transactions related to the capital market.

Secondary Market alludes to a market where protections are exchanged in the wake of being at first offered to people in general in the essential market through an IPO as well as recorded on the Stock Exchange. The dominant part of the exchanging is done in the secondary market. The secondary market also contains value markets and obligation markets.
For the general financial specialist, the auxiliary market gives a productive stage to exchanging his protections. For the administration of the organization, Secondary value markets fill in as an observing and control conductor—by encouraging worth improving control exercises, empowering execution of motivating force-based administration contracts, and conglomerating data (by means of value disclosure) that aides the board choices.

Those shares which are easily and readily available for direct trading in the stock market are called free float. It excludes promoters' holding, government, and strategic holding and other locked-in shares. This will not come to the market for trading in the normal course.
E.g., MMTC has Rs. 5 crore outstanding shares, out of which 4.97 crore shares are held by the Government under promoter category. Only the balance 3.34 lakh shares comprise of the free float of the company.

A forward contract is a contract for two parties who agree to trade at some future date. Here price and quantity should be specified and stated prior. There is no change in money matters time when the deal is signed.

Expiration Day is the last day on which your contracts expire. Options and futures contracts expire on the last Thursday of whichever the expiry month is. However, if last Thursday is a trading holiday, the contracts will expire on the previous trading day. For instance, January 2008 contracts matured on January 31, 2008.

Margins are definitely collected online and then computed. It is collected on a real-time portfolio basis. This task is done at the client level. All the members are required to collect an upfront margin from the client and report it back to the exchange immediately.

The entire block of Futures and Options contracts are settled on a daily basis. It is settled in cash only at the expiry of the respective contracts or as the case may be. Clients or trading members are not specifically required to hold back any stock in futures or options market. The money option contracts are worthless at the expiry or maturity.

You can anytime short sell your shares in future segments. There is no bar on your holdings in a Demat account.