Get the feel of actual Stock Market with Stock Trading Simulators

Stock Trading Simulator are stock trading based games that feature a virtual stock market. These games are developed and ideated mostly by stock brokers, to give its clients a feel of the actual stock market and get some hands on training and confidence before they begin trading in the actual Stock Market.

Stock Market simulators are of two different types, i.e. Financial Market simulators and Fantasy simulators.

Financial Simulators

Financial market simulators allow its users to generate a virtual portfolio which is based on real stock entries but is bought with virtual currency. A majority of the current active financial simulators use delayed data feed between 15-20 minutes to ensure that traders do not use their data to trade actively on a competing system.

The main purpose behind such a system is to let the investor get hands on practice with fantasy funds in a real-life situation so that they can understand and determine whether they would or not gain money by investing all by themselves.

Fantasy Simulators

Fantasy simulators trade in shares or derivatives of real world items or things that usually are not listed on a commodities trading list or market exchange. For e..g, movies, television shows, etc. Some of these simulators focus on sports and may or may not have been linked to active betting and wager based systems.

Technology behind these simulators

Many of these online stock simulators use Java, Javascript, ASP or php with a mysql or postgresql database. Many of them are based on open source and others are proprietary with the codes being marketed as priceless market software. This technology has been sold to a lot of film studios such as MGM and Lion’s Gate films and also to many popular science teams for usage in their PPX systems.

The stock market simulator engines can be customized for being used in other functions other than basic stock information tracking. The HSX engine has also been modified to trace popular science trends and is very useful in tracking YouTube videos.

Other various applications that can be used for implementation with this software including popularity tracking and ranking from a set scale rather than actual numerical values.

Many of these Stock market games are speculative that allow its players to trade in stocks or in a virtual or simulated share market.

There are many stock market games which exist in several forms but the basic concept in these games is to allow players to gain experience in trading in the stock market or just for entertainment by trading stocks in a virtual world where there is no actual risk.

Some stock market games do not involve real money at all. Players compete with each other to actually see who can predict the direction of the stock markets. Many stock market games are based on real life stocks from NSE, BSE, etc.

These games are useful for people who don’t know anything about the stock market but want to invest in stock market.

It allows them to get a feel of the actual market without involving any risk factor.

The difference between a financial and an investment advisor

Investment Advisor is either a firm or an individual that provides advice or guidance to its clients regarding securities (financial).

It guides and advices on securities such as investment in stocks, bonds, mutual funds, or exchange traded funds are investment advisers. Some investment advisers manage portfolios of securities.

The main difference between an investment advisory and a financial planner is that almost all financial planners are investment advisers but not all investment advisers are financial planners. Some financial planners assess every aspect of an individual’s financial life which includes savings, investments, insurance, taxes, retirement and in some cases estate planning as well. After their assessment, they help the individual to develop a detailed strategy, insurance, taxes, retirement and estate planning.

They also help you to develop a strategy or a financial plan for meeting your day to day financial goals.

Before hiring the services of any financial professional, one must know what kind of services is exactly required and what kind of a background does the financial professional hold. After all you are going to invest your hard earned money therefore it is very necessary for you to know everything about your investment advisory.

1)            To how many people do you provide advices regarding investments?

2)            What is your educational background?

3)            With which stock broking organization are you associated with?

4)            Which are the licenses you hold?

5)            What products and services do you offer?

6)            What is the commission that you charge for your services?

Also one needs to know how the investor advisers are paid in order to make better use of the services that are provided to them.

1)            A percentage of the total value of the assets that they manage for you.

2)            An hourly or daily fee on the basis of their handling of your work.

3)            A fixed fee for the services that they offer you.

4)            A commission on the basis of the securities that they buy/sell for you.

5)            A small combination of everything mentioned above.

All the compensation methods have potential benefits and possibly drawbacks, based on your individual needs. You must ask the investment advisory to explain you all the differences thoroughly before you do any business with them.

One must also ask if these service fees are negotiable or they are a onetime fixed amount. Based on your needs and requirements, the investment advisers will provide you with various strategies that will cater to your financial needs.

Indian stock market and companies daily report (June 08, 2012, Friday)

The Indian markets are expected to open in the red tracing negative opening in most of the Asian bourses and the SGX Nifty. Asian stocks were trading lower after comments by Federal Reserve Chairman Ben S. Bernanke overshadowed China’s first interest-rate cut since 2008.
The People’s Bank of China has lowered its benchmark lending and deposit rates by 25 basis points. The announcement, two days before China is due to report inflation, investment and output figures, may signal that the economy is weaker than the government expected. Bernanke said the central bank will need to assess conditions before deciding if more measures are needed to stoke an economy threatened by Europe’s debt crisis and U.S. budget cuts.
Meanwhile Indian shares extended recent gains on Thursday after the rupee breached the 55 mark to hit a two-week high against the dollar reflecting a return of appetite for risk. Talks of the government giving a big push to infrastructure development bolstered sentiments. Although there were reports of the Union Cabinet deferring a decision on the Pension Bill due to lack of consensus, the benchmark indices ended the trading day with significant gains.

Markets Today
The trend deciding level for the day is 16,617/5,039 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 16,713 – 16,777/5,070 – 5,091 levels. However, if NIFTY trades below 16,617/5,039 levels for the first half-an-hour of trade then it may correct up to 16,552 – 16,456/5,018 – 4,987 levels.

China cut borrowing costs
China reduced interest rates for the first time since 2008 and loosened controls on banks’ lending and deposit rates, in its bid to combat a deepening slowdown as Europe’s ongoing debt crisis threatens global growth. The one-year lending rate and one-year deposit rate were reduced by 25bps to 6.31%, and 3.25%, respectively. Banks are now given more leeway to offer upto 10% higher than benchmark deposit rate to depositors and to charge upto 20% lower than the key benchmark lending rate (previously 10%).

RIL plans a capex of Rs.100,000cr over next 4 years
Reliance Industries (RIL) conducted its Annual General Meeting (AGM) for FY2012. With cash and equivalents of ~Rs.80,000cr as of March 31, 2012 on RIL’s balance sheet, Chairman Mr. Mukesh Ambani announced that the company plans to invest Rs.100,000cr across business segments over the coming four years. It targets to invest ~US$3.5bn on shale gas. On its core petrochemical business, RIL aims to increase its capacity to 25mn tonnes from the current 15mn tonnes and also invest in operational efficiency projects. RIL aims to become a market leader in retail business and targets to achieve top-line of Rs.40,000-50,000cr over the next threefour years (current top-line Rs.7,600cr). Further RIL informed that although KG D6 production has declined over the past one year to 34mmscmd, it aims to raise total gas production to 60mmscmd by 2015. On profitability front, Mr. Ambani said that RIL aimed to double its operating profits in the coming five years. RIL has bought back 2.79cr shares at a cost of Rs.1,929cr under its share-buyback program. Alongside decline in KG D6 gas output, deployment of huge cash pile was amongst the key concerns on the stock. Clarity over deployment of cash is positive in our view. We maintain our Buy rating on the stock with a target price of Rs.879.

L&T bags orders worth Rs.2,410cr
L&T’s construction arm has won Rs.2,410cr new orders across various businesses during April-June 2012. The Buildings and Factories IC has secured new orders worth Rs.1,921cr. The orders are from leading developers for the construction of major residential towers across various cities in the northern part of the country. L&T Infrastructure IC has won orders to the tune of Rs.345cr for the design and construction of viaducts and three elevated stations from Delhi Metro Rail Corporation which also includes additional orders from various ongoing projects. Water effluent and treatment business has bagged new orders worth Rs.244cr from Bangalore Water Supply and Sewerage Board for upgrading the existing water distribution systems including additional orders from various ongoing projects.
At the CMP of Rs.1,277, the stock is trading at 16.7x FY2014E earnings and 2.4x FY2014E P/BV on a standalone basis. We have used the SOTP methodology to value the company to capture all its business initiatives and investments/stakes in different businesses. Ascribing separate values to its parent business on a P/E basis and investments in subsidiaries on P/E, P/BV and mcap basis, our target price works out to Rs.1,553, which provides 21.6% upside from current levels. We recommend Buy on the stock.

Economic and Political News
- People’s Bank of China cuts interest rates as economy continues to slide
- Monsoon 36% below average in first week: IMD
- PM's push for infra sector to boost investor confidence: CII
- Cabinet defers decision on pension reforms bill

Corporate News
- Tata Steel to set up Rs.30,000cr plant in Karnataka
- Suzlon to invest Rs.15,000cr to set up a 2,500 MW wind farm in Karnataka
- Dr Reddy's launches generic Parkinson's disease tablets in US
- BHEL commissions 250MW unit at UP thermal power project
- Jubiliant Life Sciences to invest ~Rs.1,000cr across businesses in Karnataka

Online share trading in India, open demat account in Angel Broking for stock market trading

What are the advantages and disadvantages of Online Trading?

Due to the problems that arose during paper shares, there was a need of a system that would make share transfer, buying/selling of shares, etc. an easier affair.

Therefore in 1996, the Indian parliament passed the Derivatives act, which allowed online transaction of shares, thus making it much easier for the broker and investor.

In the new online Trading system, an investor must open a demat account with one of the Stock Brokers to start trading online.

A demat account is a must for an investor to trade online.

Mentioned below are some of the advantages of trading online:

1)            Easier and convenient way to own shares

2)            Immediate transfer

3)            Zero stamp duty on transfer of shares

4)            Safer than paper shares, e.g., fake signatures, delay, thefts, etc.

5)            Lesser paperwork for transfer of securities

6)            Less transaction cost

7)            No “odd” problems. Even a single share can be sold.

8)            DP registers a change in address with all companies. No need for the investor to contact the companies immediately.

9)            DP transmission of securities, thus eliminating the need of notifying the companies.

10)          Automatic credit in demat accounts

11)          Both equity and debt instruments can be held by a demat account

The depository system aids in reducing the expenditure of new issues due to lesser printing and distribution costs. It increases the efficiency of the registrars and transfer agents and the secretarial department of a company. It provides better facilities for communication and timely service to shareholders and investors.

The disadvantages of online trading are mentioned below:

1)            Investors, who are trading for the first time, go with the flow and get immersed in technology and actually temporarily forget that they are actually using their real money. 

2)            There is no relationship that of a mentor between a professional broker and an online trading account holder, thus leaving the investor on his own to make choices of the right shares.

3)            Users who are not familiar with the ins and outs of the basics of brokerage software can make mistakes which can prove to be a costly affair.

4)            This is like any other financial strategy, where your commitment to online trading takes research and dedication to make sure by yourself that everything is up to par. You have to take time out to do your own research where you will have to overcome a great learning curve to make some money from online trading a possibility.

Online share trading in India, open demat account for stock market

Equity and Equity Investments in India

In accounting and finance, Equity means the residual claim or interest of the junior level of investors in assets, after all the liabilities have been paid for.
If liability is more than the amount of assets, it becomes negative equity.
In the context of accounting, shareholder’s equity (or stockholder’s equity, shareholder’s funds, shareholder’s capital or any such similar terms) is represented by the remaining interest in assets of a company which is spread amongst individual shareholders of common or the preferred stock.
In the beginning of a business, the owners invest some funding into the business to the finance operations. This forms a liability on the business in the form of a capital as the business becomes a separate entity from its owners. Businesses can also be considered, for accounting purposes, sums of liabilities and assets; thus this is the accounting equation.

After the liabilities have been accounted for any positive remainder, it deems the owner’s interest in the business. This definition is helpful for understanding the liquidation process in case bankruptcy occurs. Initially, all the secured creditors must be paid against the proceeds from various assets. Afterwards, the series of creditors, who are ranked in terms of priority sequence, have the next claim or right on these residual proceeds.

Ownership equity is the last or residual claim against these assets, which is paid only after all other creditors are paid. In such a scenario, even the creditors who do not get enough money to pay their bills, there is nothing over to reimburse the owner’s equity. Thus, this makes the owner’s equity to zero. The ownership equity also becomes known as the risk capital or liable capital.

An equity investment is generally referred to as the buying and holding of shares in a share market by various individuals and companies in anticipation of an additional income from dividends and/or capital gains as they expect the value of the stock to rise.  When the equity holder receives the right to vote, it means that he can vote for the candidates for a majority of the board of directors as well as some major transactions and residual rights, which means that they share some portion of company’s profits as well as may help in recovering some of the company’s assets in the event of bankruptcy or any untoward incident that might harm the company’s liquidity. This is possible despite they having the lowest priority in recovering their investments.
It might also refer to the acquisition of ownership or participation in a private or a startup company. These equities which are held by private individuals are often known as mutual funds or other forms of collective investment scheme. Many of these have quoted prices that might be listed in financial magazines or newspapers.
The mutual funds are managed by prominent fund management firms that allow such holdings in the hands of private investors and pension funds, who are subjected to hold shares directly. In such institutional environment, many clients who hold their own portfolios have what we know as segregated funds. As opposed or in addition to the pooled mutual fund alternatives.
A calculation made can be made to assess whether equity is overpriced or underpriced, in comparison to a long term government bond. This is known as the yield gap or the yield ratio. It is the ratio of the dividend yield of equity and that of the long term bond.
Online share trading in India, open demat account in Angel Broking for Stock market