How to Buy & Sell Stocks in India
Trading stocks listed on Indian-based stock exchanges such as the National Stock Exchange of India or the Bombay Stock Exchange presents the active investor with the opportunity to take advantage of one of the world's largest and fastest-growing economies. With the formation of the SENSEX, a stock index comprised of thirty of the largest publicly traded companies on the Bombay Stock Exchange, and the Standard and Poor's company CNX Nifty index, comprised of a diversified selection of 50 of the largest stocks traded on the National Stock Exchange of India, investors can trade and monitor India's stock market.
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Instructions
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Write a professional trading business plan. If you intend to trade these markets in real time, recognize that there is approximately a twenty-four hour difference between the United States and India. Your trading plan should take into account how you plan to execute your trades given the time zone difference in the hours of business operation. Limit orders can always be placed with your broker allowing you to determine in advance the price you are willing to buy and sell at in the market. For instance, if your professional strategy indicated that you should buy an Indian stock at one percent below where it closed the previous trading session you could easily place a limit order to buy the stock at that price as soon as the Indian market opened. Be sure to discuss how you plan to carry out your trading with your U.S.-based broker. Decide on how much risk capital you will commit to your business.
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Begin your research for a broker by focusing on U.S.-based international brokerages that offer their clients access to the Indian stock market. You can and should trade Indian stocks listed on and Indian stock exchange through a U.S.-registered brokerage. Conduct a background check on the brokerages you are considering by contacting the Financial Industry Regulatory Authority. The Financial Industry Regulatory Authority has an online database you can search for free by visiting their website or by contacting them in writing or by phone.
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Complete all of the necessary account paperwork provided by your chosen brokerage. Read the "Customer Agreement" and "Terms and Conditions" documents provided to you by your broker as they describe your rights and obligations associated with your account.
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Deposit your risk capital. Be sure you meet your broker's account minimum. Most brokerages allow you to mail in your risk deposit or you can deposit your funds via a wire transfer. If you have any questions regarding how to fund your account, be sure to contact your broker.
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Commence trading your account according to the professional trading strategy described in your business plan. If you will be using a broker to place your orders rather than doing it yourself online you will need to establish a protocol of how you transmit your orders. This can be done over the phone or by e-mail. Give careful consideration as to how you will manage your trades.
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Tips & Warnings
Trading is a skill that takes time to learn. Practice your trading strategy before you begin to trade your risk capital.
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