Before we begin with different types of margins, let us look back at what margin trading is. Suppose I is an investor and B is a Broker. I is extremely sure of an investment strategy that he has developed. But due to the limited capital, his gains are limited. So, he goes to his broker B and says that I have 10$ but I would like to invest worth 100$. Would you like to provide me with the remaining 90? B says, that he is willing to provide the same but he would charge some extra commission for that. A agrees and pays the 10$ , B gives him the remaining 90 and A then invests the 100$. He makes a profit and then returns the 90 plus the extra commission to B. The transaction above in layman terms is margin trading.
Primary Market: Basic Concepts
Primary Markets are where firms issue new shares or bonds to the public for the first time. The primary market is where the IPO (Initial Public Offering) of shares takes place. The primary market also facilitates bond offerings for both – public sector and private sector companies.
Have you ever been confused on how to start with a technical analysis of a stock, index, commodities, Currency etc.? This article aims at solving the puzzle.
First of all, Technical analysis isn’t the only way, there are fundamentalists too. But fundamental analysis tends to lag because, Fundamentalist studies the cause of the market movement, and Technician studies the effect.