Risks and Fees Associated with the Stock Market
May 21, 2021
The fact that a stock market is a risky place is not hidden from the world. People end up losing their retirement funds and whatnot in this market. But as risky as it may seem, it is equally profitable. According to research if someone were to invest ₹20000/month straight for 30yrs in Nifty, then after 30yrs that principal amount of ₹72lakh would amount to ₹22crores. That is the power of compounding. Well of course this only holds if the market grows for the next 30yrs as it grew for the previous. No other banks or schemes can offer such returns. Well, the only thing giving the traditional banks an edge is their assurity of keeping money safe and providing fixed returns, no matter what. The same cannot be expected from the stock market as it is highly volatile and nothing can be guaranteed. Even the experts also can only merely predict. Losses are something that can never be avoided completely. It’s a part of the game. For intraday traders, losses are completely inevitable. So margin calculator is something that helps traders get an idea of their losses.
When these traders make trades, they require to have a stipulated amount of money with them to cover for losses if incurred any. The amount of money kept separately for this is known as margin and is commonly employed by intraday traders. With all the volatility in the stock market predicting a margin amount becomes a fairly difficult task. To overcome this difficulty one can utilize a margin calculator. It calculates the margin amount after taking into consideration several parameters. This calculator employs complex algorithms and ML techniques and observers the global markets before giving an amount. This calculator is capable of calculating the margin for every position.
The uncertain dance of stocks is the root cause of all the problems. Some factors which are believed to affect the price of a stock are listed below:
- The behavior of investors: The investors also have a hand in the price fluctuations in the stock market. Like if the customers choose to more risk aversive and funnel large sums of money then the market is bound to shoot up. On the other hand, if someday customers choose to play the game and stay low then they’ll invest small sums of money. Hence pulling the market down.
- Availability: The most basic factor involved. The thumb rule of economics says that if there is a shortage of something and it is in high demand then its price is bound to shoot up. For instance, the city of Delhi only has 1000kg of tomatoes. People flock to buy more than that. Then obviously the one paying the most will get it. The same is the case in the stock market too. If a stock is not open for sale for very long neither is any holder keen on selling it, then the price of that stock is bound to shoot up.