Online Stock Trading, What Is a Mini Stock? Advantages and Disadvantages of Mini Stocks: As the name implies, mini-stocks are a service that allows you to invest in stocks from a small amount, and are correctly called “stock trading service for less than one unit”.
What is the difference between this mini-equity and a regular equity investment?
Domestic stocks are usually traded in units of at least 100 shares. For example, if the stock price is 3,000 INR and the unit share is 100 shares, the minimum investment amount is 300,000 INR.
As you can see, ordinary stock investment requires hundreds of thousands to millions of INR, but mini stocks can be traded for around 10,000 INR.
Features of mini stock in Online Stock Trading
Mini stocks are a service unique to securities companies, so not all companies handle them.
Dividends will be distributed fairly according to the number of shares held. The same applies when a stock split is conducted. You can acquire newly issued shares according to the number of shares held.
Besides, shares that do not use the unit system are not eligible for mini-shares. Similarly, stocks that do not agree with the Indian Securities Depository Center are also excluded.
Buying and selling of mini stocks
Another feature of mini-stocks is that they are bought and sold at the “close-up” price the day after you apply for trading. “Close-up” means the first trade that was completed on that day.
In other words, limit trading is not possible, in which trading is automatically completed when the desired amount is reached.
The reception time for trading applications varies depending on the securities company, but the reception time is clearly stated on the official website.
When the number of mini-shares is repeatedly purchased and the total reaches the number of unit shares, it is treated as a normal unit share.
At this stage, the name of the stock changes from a securities company to an investor for the first time.
What are S stocks, one stock, and Tiny stocks?
The name of “mini stock” differs depending on the company that handles it. By the way, it is officially called a less than one unit stock trading service.
Benefits of mini-stock investment
Even with a small amount of cash on hand, you can trade stocks of popular and excellent companies.
It can be said that it is a nice service for those who want to reduce risk by investing in multiple stocks in a distributed manner.
How to get started with mini stocks
First, let’s open a trading account at a securities company. Recently, online securities have been started more easily than traditional store-type companies and are used by many beginners.
Since there are no stores in online securities, operating costs can be kept down, so it is attractive that various fees are set low.
You can easily get market information and trade on the Internet, so you can make an investment without taking time.
Disadvantages of mini stock investment
Mini-stock investment has not only advantages but also disadvantages. Let me introduce each one.
You cannot decide the detailed timing of buying and selling. It depends on the securities company, but it seems that trading is often done at the “close-up” price the day after you apply for trading.
Therefore, there is a risk of missing the optimal timing. Also, transaction fees can be high. Standards differ depending on the securities company, so check the official website.
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