Wednesday, 25 September 2019

What are the terms and concepts that one needs to know before starting a career in the stock market trading floor?

Anything is quite easy to learn if one is genuinely interested in it.
While the terms and concepts can be a bit tricky, starting from the very basics can help you along the way.
There are three different markets where you can trade. Equities, Futures and Options. Since F&O (Futures and Options) instruments are essentially based on the underlying equities, it’ll be better if you make yourself comfortable with the basics of equities market, initially. This shall include terminologies, trading concepts and settlement system.

One can start trading easily, but in difficult situations, only conceptual clarity shall see you through, so always focus having strong basics.
You must have clarity on the following before you commence trading:
a. Basic buying and selling procedures;
b. Types of orders and their execution in the live market;
c. Clearing system and settlement;
d. Settlement of Profit or Loss (also called as Marked to Market);
e. Transaction costs (brokerage and taxes);
f. Margin requirements and settlement in F&O markets;
g. Leverage and margins.
While the list can be a long one, these should help you in having an insight into the trading world
All the best :)

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