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Stock Market Questions and Answers
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Through this documentation on stock market questions and answers, one can avail of innumerable trading opportunities and can smartly make investments.
Whether you want to invest in equity, mutual funds, commodities, derivatives, IPO, or maybe currency trading, you can clear all your trading doubts here.
These important stock market questions and answers will change the trading process from complex to easy without the help of full-service brokers, discount brokers, or stockbrokers.
These Indian stock market questions and answers will be helpful for each category of investment fields, such as equity, derivatives, commodities, currency trading, mutual funds, and much more!
Stock Market FAQs
1. Can I trade when markets are closed or shut down?
No, unfortunately, you cannot trade after the market is shut down. The normal trading hours are between 09:15 AM to 03:30 PM.
However, some passive traders can also place orders after the market is closed and that is known as After Market Orders (AMO).
Although several trading positions close during AMO creating volatility in the markets due to which the value of stocks rises dramatically.
2. Is it possible to have varied demat and trading accounts?
Yes, absolutely you can have a number of demat accounts and trading accounts. But you cannot have multiple demat and trading accounts with a single stockbroker.
Therefore, you must open more than one demat and trading account with different stockbrokers.
In case you open multiple accounts with a single stockbroker you need to pay annual maintenance charges for each account as per their rules and guidelines.
Want to open the demat account
3. Can I trade without a stockbroker?
As a matter of fact, trading without a stockbroker is not possible. NSDL (National Securities Depository Limited) and CDSL (Central Depository Securities Limited) are the government-registered depositories that handle and monitor a plethora of securities such as stocks, equity, derivatives, commodity, etc. in digital form.
The stockbroker acts as a liaison between the Depository Participant(DP) and the investor.
4. How many Sectors are there to invest in Stock Market?
The stock market has become another name for enhancing income prospects. Keeping in mind the widely spreading popularity, there are 11 different sectors in the stock market.
The categorization in the stock market helps the investors and portfolio managers properly allocate the funds in the respective sectors.
5. Can my demat account have joint holders?
Certainly, you can have multiple holders in your demat account. Many stockbrokers provide different categories for the holders.
Along with one Primary holder, two secondary holders can be a part of the account and it is mandatory to have one nominee in the demat account too.
6. Why is a demat account in trading so important?
The major objective behind opening a demat account is the safety of the essential securities. There will be no risk of theft or fraud.
Secondly, it is more convenient to have the securities in digital form i.e. dematerialized form rather than conventional physical form.
Thirdly, you can easily manage and monitor your trading performance through the demat account.
Finally, you can buy/sell any stock at any time and from anywhere without any long paper process. You are just required to follow simple and easy steps to transfer or receive shares.
7. What if I have another demat account with another stockbroker? What are the procedures or ways to transfer your demat account with another stockbroker?
You can transfer, exit, or sell your shares with ease. Also, you can convert the shares to physical form which will take 1 to 3 working days.
Shares can be transferred from one stock broker to another through a manual or online process. In the manual process, you are required to fill the Delivery Instruction Slip, commonly known as DIS slip from the stockbroker you hold your account with.
On the other hand, in the online process, you are required to register with CDSL through their website. On clicking the EASIEST link, a form will be generated.
Simply, print and forward the document to your new stockbroker.
8. Is a demat account compulsory to apply for an IPO in India?
You do not require a trading account however, having a demat account is mandatory since the credit of shares granted to you will be shared in this account.
9. What charges do I need to pay for account closure and securities transfer to another account?
As per SEBI guidelines, a stockbroker cannot charge from the demat account holder for transferring or removing the account.
10. What is bottoming out?
Bottoming out is the phase when the stock falls downwards to its lowest peak and is expected to reach to rise in the coming days. This phase seems as profitable by the investors as the stock is expected to rise rapidly.
11. Can any miss calculations be possible from brokers or CDSL, NSDL in terms of our investing money? If we buy or sell daily then how does the T+2 formula work?
Undoubtedly, no miss calculations can be possible from the brokers, CDSL or NSDL. The T+2 formula doesn’t work if we buy or sell daily.
12. In Intraday trading, do we also require a demat account along with a trading account? Can demat account services be stopped? If yes, how?
No, you do not require a demat account in Intraday trading.
Without a DIS slip, you can transfer your shares from one discount broker to another through the online process. Here, you are required to register with CDSL through their website.
On clicking the EASIEST link, a form will be generated. Simply, print and forward the document to your new stockbroker.
14. In how many days can we sell stocks in CNC?
If you buy CNC (delivery) you can sell stocks on the same day and only intraday charges are applied.
In case you sell the stocks on the second day of buying CNC, then only intraday brokerage charges are applied.
On the third day of selling the stocks, CNC delivery brokerage charges are applicable.
15. What are the IIFL DP Charges?
DP refers to the Depository Participants which act as an intermediate between depositories and investors or clients. Whenever a client buys or sells a stock, charges are levied by the stockbrokers and those charges are referred to as DP charges.
Depository Participant charges by IIFL:
CDSL charge Rs 5.5 per buy or sell and IIFL charges 0.04% of the transaction value (Minimum Rs. 25)
Yes, the normal Stock Market timings are between 9:15 AM to 03:30 PM. However, you can also place orders through AMO(After Market Order)
17. Is it safe to invest in Unlisted Stocks as a beginner?
As a beginner, there is a lack of experience, and investing in unlisted stocks can often accelerate the losses and drag the investor into a scam.
It is only advisable to invest in an unlisted stock as a beginner when there is strong trust and the possibility of future growth of the company.
18. How to Find Undervalued Stocks?
There are various companies that have unlisted stocks in the market and there are various ways to buy that.
A person can easily buy unlisted stocks by investing in start-ups, by giving the employees the chance to invest in the unlisted stock of their own company, and through AIF and PMS.
You can buy an unlisted stock very easily of the company you trust and expect to grow.
Conclusion
In a nutshell, the above stock market questions and answers are important for a beginner or an expert level trader as it helps them to gain a proper understanding of stock market.
Since the stock market complex, these questions and answers provide relevant information about the demat account, transferring an account, stock market trade timings, SEBI guidelines, trading accounts, IPO, and much more!
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