Want to buy shares? Before learning about how to buy shares I recommend reading about
How To Invest In Stocks For Beginners. In India, to buy shares in online you need two things.
- Trading Account
- Demat Account.
Once you got your account opened, now it’s time to invest your hard earned money. Our main goal for right now is learning but not earning.
First, we learn by investing less amount. Once we got to know how it works then we can eventually invest huge amount.
I will be using Zerodha trading platform to explain about buying shares online. But the concept remains same for any trading platform.
How to buy shares online?
Now I am going to buy Tata Power Company Limited shares. As of today, the share price of Tata Power company is 80.55 Rupees.
I am not telling you to invest in Tata Power Company Limited. It’s just for an example. You need to research before you buy shares.
Now I am going to login into my trading account to place the order.
Now we need to add funds for buying shares. You can find that option in your trading platform.
Once you add funds to your account. Now it’s time to place your order. You can search for the stock name and click on “Buy”.
In India, two major stock market/exchange will allow you to buy/sell shares. One is NSE (National Stock Exchange) and the other one is BSE (Bombay Stock Exchange).
You can find the difference between NSE & BSE in the below screenshot.
I am selecting NSE(National Stock Exchange) as of now. You can see I am buying shares of TATAPOWER (NSE). You can select your own stock of your choice and place buy order.
Now look at the screenshot above and try to understand the options they have provided.
Market Order (MKT): A market order is a buy or sell order to be executed immediately at current market prices.
Limit Order (LMT): A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to execute.
Stop Loss (SL): It is an order placed with a broker to buy or sell once the stock reaches a certain price. A stop–loss is designed to limit an investor’s loss on a security position.
CNC (Cash and Cary): It is nothing but Delivery trading.
What is Delivery Trading?
In Delivery trading, you buy shares and sell them anytime you want.
What is intraday Trading?
In Intraday trading you buy shares today and you must sell them the same day. Else they will be executed at the closing time of the market.
Margin Trading (MS): It is nothing but you are borrowing money from a broker to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stocks.
Now I am going to Buy 200 shares of TATAPOWER(NSE) at 80.55 Rupees. Once your order is executed place Sell order.
Note the quantity(200) should be same as the quantity you placed for Buy order.
And I am going to sell it when it reaches to 90 Rupees. And the order will be executed once it reaches to target(90 Rupees). Now let me show you how much you can earn from this stock TATAPOWER(NSE).
Stamp duty charges will vary from state to state. You can find below screenshot including stamp duty charges for Andhra Pradesh.
So, Net profit you earn from this stock is 1839.33 Rupees. This is how you buy shares in the stock market. Hope you understood.
Any queries please comment below. Happy to help you. Share this article if you liked it.