With changing times investing in the stock market has become easier and instant. The Internet has made it possible to learn about different investment strategies and trading methods easily. As everything has moved online, online stock trading has become a popular concept with so many benefits. There are many stock trading facts unknown to many investors. Let us discuss the 5 facts about online stock trading –
1. The golden rule of 72
The rule of 72 investors is a very fundamental concept in the stock market and one of the popular stock market facts. This rule is used by investors to calculate the time required to double the investment. If the fixed rate of annual interest is known you can determine the time required for the investment to become double. Let us understand this share market fact with an example.
Let us consider an investor who has invested Rs 5,00,000 and the interest rate is 8%, using the rule of 72 the time required to double the investment will be 72/8=9 years, i.e. it would take 9 years to double your corpus. You can use this rule efficiently for the low rate of interest.
2. Mistakes will happen
Quantity and price are crucial parameters and investors must focus on them before making any investment decision. The investor must be mindful of his decision when it comes to price and quantity. Even a minor confusion of mistaking price for the quantity and vice versa can lead to huge losses. The Indian stock exchanges operate at the speed of few microseconds and once the order is placed cannot be reversed.
3. BSE is the oldest stock exchange in Asia
This is one of the interesting facts about the stock market, BSE is the oldest stock exchange in Asia. It was founded in the 19th century by the Indian businessman Premchand Roychand. He was popularly known as the cotton king, bullion king, and the Big Bull back in the times. Initially, when the Bombay Stock Exchange was found it was known as the Native Share and Stockbrokers Association. The BSE is the oldest exchange in Asia and over 500 companies are listed on this exchange. This also makes BSE the only exchange with such a huge number of listed companies in the world. Including BSE there are 23 more exchanges in India. Before 1995 only physical trading was carried out but to make the trading execution more efficient dematerialization was introduced.
4. The most expensive stock in the world
Berkshire Hathaway is the costliest stock in the world and one share of this company costs you over Rs 2 crore. Berkshire Hathaway Inc is an American Multinational Conglomerate with its headquarters in Nebraska, United States. It is one of the largest financial service companies which generates the highest revenue in the world. This company is managed by Warren Buffett and Charlie Munger and they serve as Chairman and Vice-Chairman respectively in the company. On February 1, 2019, the share was sold for $313,350 which made it the most expensive stock in the world. It is one of the costliest shares as the stock was never split and has not paid dividends except for only once.
5. The Bull and the Bear Market
If you are familiar with the fundamentals of trading, you must have come across the bull and the bear market concepts. The market is said to be bullish when the stock prices are soaring high and the overall market is positive. The rising stock prices are compared to the horns of the bull which are always pointed towards the sky. Whereas when the market is referred to as the bearish market it symbolizes the palm of the bear which is always facing the ground. Thus, when a market is bearish the stock prices are falling, and the overall sentiment of the market is negative
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