Nikhil Walavalkar Moneycontrol News
Buoyant stock markets and tepid performance of traditional investment options such as gold and real estate have made many investors to venture into shares. Many of these are employed or self-employed and they can’t access the market in trading hours due to their professional commitment. That impedes their investments in stock markets. To invest more effectively they can leverage the below facilities provided by the brokers.
Price alerts
If you are going to see the stock prices after markets close, there is a fair chance that you will be looking at the closing prices only. Novice investors generally miss the intermittent price action. Also, there is a possibility that you may forget to check the price of a scrip that you have long identified. To overcome such a situation, it makes sense to create a portfolio or watchlist of stocks. More important is to set a ‘price alert’ on these stocks. This facility ensures that an email or an SMS or both are sent to you if the stock reaches the defined price.
Traders use price alerts to act on them quickly. In some cases the stock price moves by a wide margin in the trading hours. Even if you come to know about it after the market hours, it will bring the stock back on your radar and you can take appropriate action about it.
Choose the right method to order your trade
If you login into your account after market hours, all your regular orders to buy or sell stocks are not accepted. In that case you should opt for ‘after-market orders’ facility. In your broker’s mobile app or the web-based transaction platform it is shown as ‘AMO order’. This allows you to place your orders after 4 PM till 8:59 AM. The broker collects these orders and lines them up when the markets open the next day. Each broker may specify different time-slots for placing AMO orders. Some brokers entertain AMO orders only when they are placed online. Some do allow you to call the broker for placing an AMO order.
If you want to buy a share at a particular price, you can also place a ‘valid till cancelled or VTC order’. If such an order is placed, the broker keeps placing it every day on the exchange till it gets executed. You need not keep placing the order every day. However, a word of caution: do not forget the order you have placed. If your view changes on the stock, do cancel the order.
You should also offer facilities such as limit order and bracket order to your advantage. A limit order allows you to buy or sell shares at a particular price. Bracket order, on the other hand, saves you from the trouble of placing multiple orders for stop loss and profit-booking. Right choice of order placement can help you improve your trade.
While a price alert and AMO facility can empower you to trade effectively, there are some of us who have decided to keep buying a set of stocks at regular interval. The idea is to build a portfolio that will deliver over a very long period of time. Such investors may avail of a facility called equity SIP.
Equity SIP
This facility allows you to buy a stipulated number of shares at regular interval – say weekly or monthly. For example, you can ask your broker to buy 10 shares of a company on 7th of each month.
Once you opt for this facility, the broker places the order for the stipulated number of shares at the prescribed interval. This way you can keep accumulating the desired number of shares at regular intervals without getting into the operational trouble of placing the orders at regular intervals.
Optimal use of these facilities can help you trade better and achieve your goals without much stress.
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