A Share Market is a marketplace where shares are publicly traded and issued, while buyers and sellers exchange documents. The Bombay Stock Exchange and the National Stock Exchange are the primary stock exchanges in India trading in quality Stocks. There are different ways to invest money, such as Initial Public Offerings and Stocks.
You need to open a Demat Account online to hold your shares. You can do so in a hassle-free manner from home within minutes. It is an electronic mode of holding dematerialised shares, protected from loss, theft, or damage, unlike physical share certificates.
To open a Trading Account, you require some documents. These include a PAN Card, Aadhaar Card, a cancelled cheque with your name from your active Bank Account, a six-month bank statement, residence proof accepted by the broker, depository participant, or relevant bank, income-proof documents, and passport size photographs.
Unique Identification Number
According to Securities and Exchange Board of India guidelines, every investor gets a UIN that helps access the database for checking any details of any disciplinary charges faced by intermediaries like brokers or agents.
A Trading Account helps buy and sell securities in the Stock Market. Ensure to link your active Bank Account withit. It also helps in seamless money inflows and outflows from your account while trading. Most brokers make it mandatory to link your Bank Account to Demat and Trading Accounts.
Now, for instance, if you want to trade in Futures and Options, deposit an initial margin with the broker. This initial margin gets calculated using the SPAN Margin calculator or Standard Portfolio Analysis Of Risk using a complex algorithm. SPAN margins are revised six times a day, and hence the value varies accordingly.
The margin calculator, in simple terms, is a computational tool used to determine the marginal requirements of the trade. It is essential as it helps determine the amount you need to deposit with the broker. It considers factors like the risk-taking capacity of broking house, balance available in the Trading Account, and the stock price, making it reliable for calculation.
Margin calculators help traders compute the margin required to initiate a trade. They also serve as an excellent way to estimate the amount involved in purchasing securities, thus helping in outlining the financial map. Calculating the margin beforehand helps understand if the amount is sufficient to go ahead. They maintain transparency and accuracy while calculating transactions with the concerned broker.
How to use it?
Select the exchange on the calculator. Choose either Futures or Options and check the ticker symbol. Select the type of trade, either Put or Call Options, with the expiry date and the strike price. Enter the lot size and click on calculate.
Once you complete the required formalities and start trading, the process becomes simple. Remember, any buy or sell activity in shares gets undertaken after carefully considering the investment horizon and financial goals.