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Online Trading offers lot of investment opportunities. You can trade or invest in Equities, Commodities, Futures, Derivatives, IPOs, Mutual Funds, Tax Saving Certificates and Forex Markets through paperless online transactions.

However, you need to thoroughly understand your service provider’s onscreen trading window, before carrying out any such transactions. A slight negligence may cost you a huge monetary loss.
There are two types of basic transactions namely ‘buy’ and ’sell’ orders. Again, ’sell’ orders are classified into ’selling long’ and ’selling short’ orders. While there is no confusion as far as a ‘buy’ order is concerned, one needs to understand ’sell’ order(s) properly before carrying out such transactions. When you are selling shares that you own in your Demat Account, you are selling ‘long’. In this case, shares owned by you will be sold out and the profit earned will be credited to your account.

A trader can make money by selling the shares without even owning them-’ short selling’-and buying them later when share prices fall. In such cases, the first transaction is ’sell’ and square-off or subsequent transaction is ‘buy’. Traders often resort to ’short-selling’ to earn profit when they sense a bearish stock market. But, such transactions must be squared-off on the same day before the stipulated timeframe set by the exchange, as technically it is not possible to convert such ’sell’ orders into delivery.

If you want to sell the shares from your demat account using the online trading website provided to you by your broker, you must allocate them first, or else, you may end up in ’short-selling’, In such a case, you need to square-off that transaction by buying them.
If you fail to do so, the system will square-off the transaction at the stipulated time. You may lose money if the share is trading above the price that you sold at. The best way to sell shares from your demat is to visit the demat allocation page of your online trading website and click on the ’sell’ button placed next to the equity you want to sell. This will automatically take you to square-off dialogue box.

Another way to prevent undesired ’short-selling’ is to set ‘auto-allocation of funds’ to inactive. In the event of a mistake made by you during trading, such an order will be rejected by the system due to lack of allocation of funds to carry out the transaction. Allocate funds only when you wish to buy shares.
To avoid these types of confusions, some brokerage houses now included separate buttons for ’sell’ and ’short-sell’ orders on the trading page of their website.
You should also be aware about buying or selling at ‘Market’ or ‘Limit’ price. You are executing your order at Market price, if you are transacting at prevailing price to meet required quantity of shares.

Market orders are executed almost immediately when they find desired quantity, irrespective of price factor. Disadvantage of this type of order is that trader does not know the price until trade gets executed and is very dangerous in volatile market. If you are placing an order at a pre-determined price, then you are carrying out a transaction at a price Limit.

It is safe to resort to Limit type of order than getting unfavourable results by transacting at Market price. And it is always better to refer the list of available bidders and offers at different prices and quantities before placing orders.

The other day I heard someone say that the investment community in India was being “over-literate” in its reaction to the US credit markets crisis. It’s an interesting idea, this over-literacy. What it means is that people are being over-knowledgeable about the crisis and are thus over-reacting to it. . Over the last few months, it has looked like that events around the world affect the short-term sentiment on the Indian stock markets far more than they affect other markets. Since I’ve always believed that being knowledgeable is a basic requisite for being good investors, I was surprised to find myself agreeing with this idea of over-literacy. However, in my opinion, over-literacy is really a problem at an individual level-professional investors and analysts should be as literate and knowledgeable as possible.

At the individual level, things are different. Many; perhaps most investors really do pay more attention to the big-picture side of investing than to the micro side. In this sense, the big-picture is what is happening to world and the Indian economy and the micro side is what is happening to your personal finances.

There is this childhood friend of mind who is a perfect example of this problem, and since he is a childhood friend, I feel at complete liberty to criticize him. Last week, he wanted to know if he should rethink which ELSS fund he should make his tax-saving investments based on the farm loan waiver or the US credit crisis.

I got really angry with him when I heard this.

Here’s a guy who pays out about 70 per cent’ of his salary on EMIs of various things he can do without, including an unneeded second apartment which is declining in value, a second car that’s far too fancy and various sundries like LCD TV s and video cameras, all of which are mere replacements for older models that work perfectly well. He saves nothing more than the Rs 1 lakh 80C limit and his PF.

As I told him with a great deal of frankness, his savings goals would be far more achievable if he focused on simply saving more money rather than being worried about stuff that P Chidambaram and Ben Bernanke can manage by themselves.

A very big determinant in how much money your savings and investments will make is to have more savings to begin with.

This sounds like a laughably simple idea but it isn’t. It’s the one thing that is under your control. It makes very little sense to read too many newspapers and watch too much business TV and keeps obsessing about those things rather than figure out how to save more. It’s a little bit like going to great lengths to choose a vehicle that has five per cent better fuel consumption when it’s so much simpler to just reduce your driving by five per cent.

Does that mean that big picture doesn’t matter? It does, but it’s pointless to worry about that before you fix the small stuff. Look at it this way. If you manage to start driving five per cent less, then it will be far better to also have a car that consumes five per cent less fuel.

For the second time in four weeks, Jeev Milkha Singh faltered at the doorsteps of victory and finished runner-up at the inaugural Ballantine’s Championships. Jeev lost in the third play-off hole to Northern Ireland’s Graeme McDowell. At one stage, the Indian led McDowell by three shots and it looked like smooth sailing as he was hitting the ball superbly.

Jeev, who shared the top spot when play started this morning, carded a final round of six-under 66 and ended in a tie with McDowell at 24-under 264 after regulation play. Jeev had four amazing rounds of 68, 66, 64 and 66 but the bogey on the 17th proved crucial as that 9pened the door for McDowell to get into a play-off. “It was terribly disappointing to have come so close and not make it. That 17th proved to be the crucial hole,” ’said Jeev.

“But I am very happy with my overall game. A score of 24-under is satisfactory under any circumstances, but having come this close it is an empty feeling to finish second. Maybe I will just take the positives and I am sure there are better things in store for me,” said Jeev, who played with a ligament injury on his right leg and a bout of flu, which dogged him all through.

Jyoti Randhawa (67) finished tied 11th that snapped his streak of top-10 finishes. Jyoti has been in top-10 for the last five weeks. Gaurav Ghei (72) was 57th. In the morning, Jeev seemed to be cruising to victory as he birdied three of the first four holes. At that stage he was 21-under and three clear of McDowell, with whom he had shared overnight lead.

Jeev started with a par but birdied the next three holes to pull ahead as McDowell birdied the third and bogeyed the fourth.

By the turn, Jeev was still two shots ahead. On the back nine, Jeev birdied the tenth, but McDowell eagled the same to close the gap to one. McDowell birdied the 12th to tie with Jeev, but the Indian nosed ahead again with a birdie on 13th. It happened again on 15th when McDowell birdied the hole to draw level only to see Jeev inch ahead with a birdie on 16th. With a lead of one, Jeev needed to hold, but a horrible tee shot on 17th saw him finish with a bogey. Both parred the tough final hole, with Jeev holing a clutch putt from 10 feet to get into a play-off.

The players halved the first two times on the 18th and then the third time, Jeev had a great pitch to leave himself a five-footer, but McDowell went one better coming to less than two feet. Jeev missed the putt and McDowell holed it to clinch his first title in four years. This was the second runner-up finish for Jeev, who was also second at the Astro Enjoy Indonesia Open four weeks ago. Paul McGinley (67) finished third af17-under 271 and Shingo Katayama of Japan shot 69 to finish fourth at 15-under 273.

When state and national elections loom in the not-too-distant horizon, the UPA government’s farm loan waiver scheme has predictably triggered a wave of competitive populism across the political spectrum. Regional parties and rival formations have been forced to step up their aam aadmi rhetoric to not appear out of step with the UPA’s largesse to the country’s farmers. Uttar Pradesh Chief Minister Mayawati took out a full-page ad in which she criticised the Union Budget for not providing loan waivers for other segments of agricultural India, including landless people, artisans, weavers, among others.

The BJP has now joined the bandwagon by asking the Centre to demonstrate its commitment to farmers by preparing a 10-year action plan for the revival of the agricultural sector. But what sort of commitment did the BJP led NDA government display for farmers when it was in power from 1998-2004? In the back and frothing going on between the two political formations, Prime Minister Manmohan Singh forcefully told Parliament that the farm loan waiver was nothing more than picking up the unpaid distress bills left behind by the NDA government.

This solicitude for farmers is welcome, although it happens to surface only at election time. But do these parties have any serious ideas to revitalise crisis-ridden Indian agriculture? The UPA government thinks that its farm loan waiver scheme is well intentioned.

But is it well designed? The cut-off of two hectares for categorising small farmers regardless of agro-climatic variations might well result in the scheme not benefiting the intended beneficiaries. Ms Mayawati is hopping mad that this scheme will not benefit the backward region of Bundelkhand where the size of land holdings is bigger. Sadly, the BJP has not come up with any new ideas either to rejuvenate agriculture beyond platitudes that it will lower interest rates if voted to power.

The last word here really belongs to farmer leader Sharad Joshi who points out that farmers don’t really need a free lunch but equal access to the market. Is the political class listening?