Stock Market Investment#
Getting Started#
Demat Account
- Holds shares in electronic form
- Required for trading
- Through depository participants (DP)
Trading Account
- For buying and selling shares
- Linked to demat and bank account
Types of Investments#
1. Equity Shares
- Ownership in company
- Dividends + capital appreciation
- High risk, high return
2. IPO (Initial Public Offering)
- New share issuance
- Retail and institutional allocation
3. F&O (Futures & Options)
- Derivatives
- Hedging and speculation
Investment Strategies#
Long-term Investment
- Buy and hold
- Fundamental analysis
- Blue chip stocks
Intraday Trading
- Buy and sell same day
- Technical analysis
- High risk
Value Investing
- Undervalued stocks
- Margin of safety
- Warren Buffett style
Key Metrics#
| Metric | Meaning |
|---|---|
| P/E Ratio | Price to Earnings |
| EPS | Earnings Per Share |
| ROE | Return on Equity |
| Book Value | Net assets per share |
Risks#
- Market risk
- Liquidity risk
- Company-specific risk
- Regulatory risk
Tax on Stock Profits#
- Long-term: 10% (above ₹1 lakh)
- Short-term: 20%
- STT (Securities Transaction Tax)