What is option trading ? stock market

Option trading
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Are you a beginner in the stock market? Want to know about the stock market and what is option trading? You are not the only person everyone wants to know about Option trading. In this article we will discuss what is trade in stock, what is option trading, what is put and call in share market, what is Banknifty, what is Nifty 50 and what us sensex. 

Table of Contents

  • Introduction
  • What is Trade in Stock?
  • What are Options in Stock Market?
  • What is Put and Call in Share Market?
  • What is Expiry in Share Market?
  • What is BankNifty?
  • What is Nifty 50?
  • What is Sensex?
  • How to Invest in the Stock Market?
  • Benefits of Investing in the Stock Market
  • Risks of Investing in the Stock Market
  • Common Misconceptions About the Stock Market
  • Strategies for Successful Investing

Introduction

Stock market is a platform where people can buy and sell stocks and other securities publicly. People can buy and sell stocks in those companies who are listed in the stock exchange. It is a great opportunity for people to invest money and make more profit. The stock market also comes with risk, so before investing you should know about the basic stock market. Here we tell you what you need to know about stock market. 

What is trade in stock?

In simple words, trade in stock means you are buying and selling in stock market, when you are buying and selling stocks that is called trade in stock. When you buy a stock you become a part owner of that company, as per company value moves up and down your stock value also moves up and down. Continue

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What are options in stock market?

Options in stock market is a financial contract that gives the right to the buyer to buy or sell  underlying assets at a specific price and time. In stock market options means when you go to invest in the top 50 companies in India you don’t need to pay a full amount, you just need to pay a premium amount to buy. Options have lots of rules and regulations when you know that you can easily trade in options in stock market.

What is put and call in share market?

Options in stock market have two options to buy and sell stocks. When the market goes up you can buy Call or sell put, similarly when market price goes down you can buy Put or sell call.when you sell put or call here you need more capital as per lots. Lots means there is a fixed number of unit stock you need to buy, you can’t buy one or two units of stocks in Option. 

What is expiry in share market?

The expire date is a date which day  option contract will expire. After the expiration date of the option value similar to zero, you can’t trade on that option. Every Thursday is the expiration date of every week and the last Thursday of the month expires. 

What is banknifty ?

Banknifty is an index that represents a group of banking sectors in the stock market. This index includes stocks of 12 banks listed in National stock exchange (NSE).

What is Nifty 50?

Nifty 50 is an index that represents the top 50 companies’ performance which are listed in National Stock Exchange (NSE). It includes various sectors like banking, technology, health care etc. 

What is sensex?

Sensex is an index which represents the top 30 companies listed in Bombay Stock Exchange (BSE). It is the one of the oldest indexes in India and widely used for performance of the Indian stock market. 

How to invest in the stock market ?

Investing in stock market can be a great way to build wealth, but the stock market also includes risk so it is important to know about stock market research about stocks analysis companies, educate yourself, you need to follow these steps to minimise your risk. 

Here are some steps : 

Educate yourself : educate yourself is the most important factor to start investing in the stock market. You can read books, watch videos, take online/ offline courses to educate yourself.

Financial Goal: before investing, set your investment goal, so you can stay for a long time in the stock market. And set your risk tolerance, how much you can tolerate. 

Choose a broker : choosing the right broker is important to make your portfolio. Research about brokers and their brokerage charges and select the right one for you . 

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Create a portfolio : Investing in different industries with different companies to minimise your risk and make a good portfolio. 

Monitor Investment : after investing keep track of your investment and adjust your portfolio as needed. 

Benefits of investing the stock market

Investing in the stock market is various benefits

  1. Potential for high return : Stocks have historically proved it provides higher return than other investments like savings accounts or bonds.
  2. Good portfolio : you can build a good portfolio by investing in stock market, you can minimise your risk by investing in different industries with different companies. 
  3. Passive income: stock market offers passive income, some companies pay a dividend which can be your passive income. 

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Risk of investing in the stock market

Risk involved when you come to invest in the stock market. 

Market fluctuations : stocks price can be moved as per market fluctuation, market fluctuation depends on economic conditions, events, and company news. 

Company risk : investing in individual companies can lose your money, as per companies risk like bankrupts, management change or legal issues. 

Loss of capital : there is always a risk of losing your capital, when you invest in stock market. You need to invest in various industries with different companies.

Common misunderstands about the stock market.

There are lots of misunderstands about the stock market, some of misunderstand are : 

Stock market is a Gamble : Stock market is full of research and analysis then you can earn money, but when some people come with their luck and invest in stock market without research and lose money or earn money they are told stock market is gambling. Learn More 

Only experts can invest : Anyone can invest in the stock market with knowledge of without, there is no restriction for investing in stock market. But it’s important to know the basics about the stock market before starting to invest. If you start without learning, you may lose your money.

Short term gain is key : Short term investment always comes with high risk. You can follow a long term strategy and keep patience.

Strategy of investing in stock market

Here are some investment strategy ro make money in stock market: 

Good portfolio : To make a good portfolio not easy  you need to follow some rules and discipline and invest in various sectors and different companies. It will minimise your risk. 

Invest in long term : one of the best investment strategy is long term investment, in long term strategy you can minimise your risk 

Do your research : you need to do your own research before investing in the stock market. You need to research company fundamental and technical research. 

Stay patient : when you invest in stock market for long , keep patient to receive high returns. 

conclusion

Investing in stock market is a great way to make money. But you need to know the basics about the stock market. We discuss what is trading in stock? What are Options in Stock Market? What is Put and Call in Share Market? What is BankNifty? What is Nifty 50? What is Sensex? And How to Invest in the Stock Market?

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FAQs

Stock market is a platform where anyone can buy and sell stocks publicly in those companies who are listed in stock exchange.

Options in stock market is a financial contract which give right to buyer to buy and sell stocks in a price and certain time. 

Put option gives right to buy for a certain time, when market going down you will buy put option, similar to call option. When the market goes up you will buy a call.

Expire is a date which date option contract expires. You can’t trade after it expires. 

Sensex is an index which includes top 30 companies’ performance in india. It is one of the oldest index listed in Bombay stock exchange (BSE). 

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