How do I start trading stocks?

Stock trading has a fixed time for trading.

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In the case of the Tokyo Stock Exchange, trading starts at 9 o’clock and runs from 11:30 to 12:30 with a lunch break until 15:00. The trading hours in the morning are called “Zumba,” and the trading hours in the afternoon are called “global.”

In addition, transactions are conducted on weekdays from Monday to Friday. They are not traded on weekends and holidays and during the year-end and New Year holidays (December 31st to January 3rd).

Stock code

There are more than 4,000 companies listed on the stock exchange, some of which have similar names. For example, there are 20 companies such as Mitsubishi UFJ Financial Group, Mitsubishi Corporation, Mitsubishi Motors, and Mitsubishi Electric, even if only the companies with “Mitsubishi” are attached.

Therefore, a four-digit number called “stock code” is set for listed stocks. In the case of “Mitsubishi” mentioned earlier, different numbers are assigned to each brand, such as Mitsubishi UFJ Financial Group “8306”, Mitsubishi Corporation “8058”, Mitsubishi Motors “7211”, and Mitsubishi Electric “6503”. 

By the way, the brand code is basically divided by industry, such as the pharmaceutical industry in the 4500s and the automobile industry in the 7200s. Still, the numbers are the same due to companies’ mergers and business content changes. It may not be possible.

There are two ways to order stocks: “Nariyuki” and “Limit.” For limit orders, ” I want to buy if it is cheaper than XX rs” ” XX is the order how to specify the price and want to sell is higher than the circle.” You can buy and sell at the desired price, but the transaction will not be completed unless the other party’s order (sell if you buy) meets the conditions. 

This is an ordering method that prioritizes price over closing a transaction.

On the other hand, a market order is an ordering method that does not specify the price as “I want to buy (sell) as much as I want.” It will be easier to close the transaction, but it may be closed at an unexpected price. This ordering method prioritizes the closing of transactions over the price.

How to close a transaction in stock trading

On the stock exchange, trading rules are set to conduct transactions fairly. Buying and selling are mainly based on the rules of the “price priority principle” and “time priority principle.”

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Delivery of trading value in stock trading

Once the stock is bought and sold, the securities company will settle the price. This settlement is called “delivery.” In the case of buying, the purchase price is paid, and the shares are received, and in the case of selling, the shares are delivered, and the sale price is received.

When the sale is completed, preparations for delivery will be made, and the price and shares will be paid and received on the third business day, counting from the day when the sale is completed (contract date).

How to buy and sell Stocks in stock trading

Investors who want to buy or sell stocks place orders for buying and selling through a securities company, rather than placing orders directly on the Tokyo Stock Exchange (hereinafter referred to as “TSE”). A securities company that receives an order from an investor uses a computer to immediately send the order to the TSE.

Place an order by specifying the price, such as how much you want to buy (sell). Place an order that you want to buy (sell) at the market price at that time, no matter how much you want.

quantity in stock trading

At TSE, the minimum trading unit is the number of shares per unit specified by the listed company in the Articles of Incorporation. Transactions are conducted with the number of shares that are an integral multiple of that number. The trading unit of common stock of listed domestic companies is unified to 100 shares, and for other products such as ETFs, REITs, and foreign stocks, different trading units are set depending on the brand.

Trading on the TSE is divided into morning and afternoon, with morning trading being called the front and afternoon trading being called the back. The front is from 9:00 to 11:30, and the back is from 12:30 to 3:00. When an order is placed, it will be sent to the TSE immediately within the trading hours, but you can also place an order by specifying the desired execution time, such as “at the start of trading” or “at the end of trading.”

What is the bid price in Stock Trading 

It is the step size of the price when buying and selling, and it depends on the stock price. For example, for TOPIX100 constituents, it is decided that “if the stock price is over 5,000 yen to 10,000 yen or less, the unit is 1 yen, and if the stock price is over 10,000 yen to 50,000 yen or less, the unit is 5 yen”. If it is 10,000 yen, you can buy and sell in 5 yen increments such as 10,005 yen, 10,010 yen, and so on, so you cannot buy or sell at prices other than 5 yen increments such as 10,001 yen.

What is the daily price limit in stock trading?

Stock prices should be formed by leaving it to the market conditions, but securities should not suffer unexpected damage because investors cannot make calm investment decisions due to too rapid fluctuations in stock prices. The exchange limits the daily fluctuation range of stock prices to a certain range.

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This is called the daily price limit, and the price range is determined by the price range of each stock based on the closing price of the previous day. For example, if the previous day’s closing price is 1,200 yen, the price range is 300 yen up and down.

The flow of stock investment is as above, but a beginner should now choose an online securities company and open an account. When choosing a stock, it is important not to be confused by the “recommended stocks” of newspapers, magazines, and securities companies, but to carefully examine its business performance, financial content, growth potential, and so on.

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