Off to the Market

8220;Of an estimated 21,000 day traders, some 15,000 will be people operating out of homes,8217;8217; says Gagan Banga, country sales and marketing manager of Indiabulls, a major online brokerage firm.

But as they gain in experience, the likes of Asha Todawal are also looking to play the market better. So if earlier she used to be largely dependent on her broker for information, today she sits in a brokerage firm in front of a terminal she8217;s hired. She has to pay 5 basis points on the volumes she transacts each day, that is approximately 0.5 paise per Rs 100 made, which is approximately Rs 500 per lakh made. This way she doesn8217;t have to deal with the broker, relying instead on other day traders like her who do trading from the brokerage firm.

8220;I have increased my volume many times,8217;8217; Todawal smiles as she logs on to the Bombay Stock Exchange site to check the results update.

Todawal is just one among the many like you and me who8217;re getting into the market. Retired government employees, company executives, and even army officers are increasingly turning to day trading.

If players like Todawal are happy making a little money here and there8217;s a lot more money to be made and adopt a focused approach . Take for example financial analyst Arun Kejriwal.

Kejriwal sits along with ten other day traders inside a 10ft by 12ft cabin in a broking house, all of them staring at terminals dotted with numbers, company names and blue and red highlights indicating price movements.

Similarly, on the top of the terminal, BSE and Nifty figures get highlighted in red and blue indicating their movement.

Unlike normal brokers, who thrive on major variations in the market, Kejriwal and other day traders play it safe and operate on much smaller margins. Day traders like him transact over Rs 10,000 crore per day. Day trading contributes more than 70 per cent in retail volumes of the market, says Banga. Time is the key. Since the margins are so small, buying and selling decisions are taken in split seconds.

His own master

And who does Kejriwal work for? No one but himself.

A day trader basically operates on his own. He need not register himself at a stock exchange like a broker. Which simply means that that someone who is using a broker8217;s terminal will not need to get himself registered as well. His broker, however, will be registered at the stock exchange.

8216;8216;A day trader will only be paying the broker a fee for using his services,8217;8217; says Banga.

Netting the market

How is the trader able to net the market?

8216;8216;Simple,8217; says Kejriwal picking up a notebook filled with company names and numerals written together so tightly that it looks like the pages are made of figures.

8216;8216;These are details of each stock I am trading in with their movements in the last few weeks. This helps us understand the movement of these stocks and also help us understand which way they will move,8217;8217; he explains.

8216;8216;We read the papers, talk to people, read the financials of every company, watch out for any news related to the companies8230; we read so much that at times we can very nearly predict the stock movements,8217;8217; says Kejriwal.

But it is also about speculation. 8216;8216;They are basically a whole lot dependent on speculation,8217;8217; believes Banga.

Much has changed since the screen based system appeared. Day trading volumes have gone up from 15 to 150 per cent in the last three years, there is more transparency now than ever before and the entire process has become much more scientific.

8216;8216;Internet and online trading has shrunk the total transaction time to less than three seconds now,8217;8217; says Banga.

Online trading has caught on so fast that over Rs 600 crore of volumes happen online now.

Taking stock

At the end of every trading session, a day trader has to make sure that he is able to 8216;square-off8217; the day, that is, be able to sell the stocks he8217;s bought.

8216;8216;I try to square-off my day, but occasionally I hold on to some,8217;8217; says Todawal. Has she been able to sell off all the stocks she bought in the morning? 8216;8216; I did for today,8217;8217; she says as she switches off her terminal, and gets ready to go home.