Participants in the Stock Market range from small individual Stock investors to large hedge fund traders, who can be based anywhere. Their orders usually end up with a professional at a Stock Exchange, who executes the order. Stock trade is nothing but trading of stocks.

What are the advantage of Stock Trading?

1)Better returns. Actively trading stocks can produce better overall returns than simply buying and holding.
2)Huge Choice. There are thousands of stocks listed on markets in the US (such as the New York Stock Exchange and NASDAQ) and around the world. There is always a stock whose price is moving - its just a matter of finding them.
3)Familiarity: The most traded stocks are in the largest companies that most of us have heard of and understand - Microsoft, IBM, Cisco etc.

Stock Trading Popularity In India

What are the disadvantage of Stock Trading in India?

1.Leverage. With a marginalized account the maximum amount of leverage available for stock trading is usually 4:1. Meaning a $25,000 could trade up to $100,000 of stock. This is pretty low compared to forex trading or futures trading.
2.Pattern Day Trader Rules. Requires at least $25,000 to be held in a trading account if the trader completes more than 4 trades in a 5 day period. No such rule applies to forex trading or futures trading.
3.Uptick Rule on Short Selling. A trader must wait until a stock price ticks up before they can short sell it. Again there are no such rules in forex trading or futures trading where going short is as easy as going long.
4.Need to Borrow Stock to Short. Stocks are physical commodities and if a trader wishes to go short then the broker must have arrangements in place to borrow that stock from a shareholder until the trader closes their position. This limits the opportunities available for short selling. Contrast this to futures trading where selling is as easy as buying.
5.Costs. Although online trading costs for stock trading are low they still add considerably to the costs of day trading. Online futures trading is about 1/4 of the cost for the equivalent value. In the UK 0.5% stamp duty is also levied on all share purchases making trading virtually impossible - Hence the popularity of spread betting.

Recommended Resources on Stock Trade in the Subcontinent

To learn ins and outs and the ups and downs of the stock market we highly recommend A beginners guide to short term trading

Useful Links on Stock Trade

Bombay Stock Exchange at http://www.bseindia.com/

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