How can an engineer use stock exchange to make additional money?

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Earn extra income by stock exchange

Working jobs, running errands, starting a business, everything circles around one thing: making money. But have you ever thought that an engineer can also earn money from the share market. For this, students of engineering colleges need to open a free demat account. Passive sources of income are essential for short-term as well as long-term goals. Wherein a lot of people relied on fixed deposits, real estate, gold, and other investment schemes before; lately, the trend has shifted towards the share market as well.

The earnings associated with the share market often have various myths attached to it, and a lot of people thus refrain from it. However, these myths have reduced over time by knowing how stock market works, and therefore, many more people have grown interested in the stock market.

How to Earn Money In Share Market?

Investing money has always been a number one priority for a majority of people in the country, after all, “what you invest today, becomes your future tomorrow”. The stock market which was earlier perceived as a taboo has now flourished into a full industry. For instance, a lot of people invest in fixed deposits in India.  A fixed deposit has the potential to generate a return of 6-8 percent per annum. Whereas when we talk about the share market, your returns in a year can go as high as 100-300 percent or even more. This is why, an engineer of the list of best engineering colleges in Jaipur can generate good money from the stock market, obviously with some rules and strategies attached to it.

How Can You Learn About The Stock Market?

Read about the various terms and jargon that are used in the stock market. Have a look around the news, videos, articles, and everything that can contribute to you knowing the market a little more. You should be well aware of certain things which include the following:

  1. Your style of trading - There are different styles of trading that a person follows in the stock market. You should be aware of whether you are an investor or a trader. Thus, an investor is basically a person who is in the stock market for long-term goals. A trader is one who is looking to make the best out of the market in a shorter span of time. in other words, knowing which kind of traders you are, not only helps you to understand your goals better but also influences the kind of research and investment zones.
  2. Know your goals – Students of BTech colleges should always know why they are entering the stock market and what their expectations are. Some people might have short-term goals like buying a phone, while others might be investing to save some capital for their dream house. So defined goals can further help you decide on a lot of things.
  3. Knowing your risk appetite - The market is volatile and so it is obvious that there are also chances of risk in the market. It is very important that you are aware of your appetite for risk. This simply means that you should know that if you are investing an amount, let’s say ₹10,000, how much loss can you bear.
  4. Knowing your investment options - There are various investment options that one has when he/she is entering the stock market. Some of these include equities, mutual funds, SIPs, etc.
  5. Pick a Good Stock - The stock market is equivalent to choosing the right stock. If you want to minimize your risks and increase the chances of a good return, picking the appropriate stock is essential. The right stock can help you multiply your capital without causing an opposite battle in most cases. You should choose the stocks of the companies that you can understand and have an idea about.

How to Make Money When Stock Market Goes Down?

The idea of making money in the stock market is to buy at a low price and then sell it at a higher price. So, making money when the market is showing a bullish or an uptrend, is pretty obvious. Students of best private engineering college in Jaipur can earn money even if the stock market is falling down using short-selling or doing options trading.

Short-selling if explained in simple terms is the selling of the stocks first and then purchasing. For instance, there is a company, XYZ and the share of the same has a current market price of ₹150. But you speculate that the market is looking a little bearish. Thus, you sell 100 shares of ₹150 each by borrowing it from the stockbroker.

Later the market price moved down to Rs.100/share. So now you purchase the shares, returned them to the broker after making a profit. So, in this case, your profit will be 15000-10000= Rs.5000. You can sell before even purchasing the shares. This is because your concerned stockbroker does it for you and later when you purchase the shares, you are returning the shares back to the broker.

On the other hand, options trading help you to make money even when the market is falling down. Here you can either buy the Call Option at the ITM strike price or simply go for selling a put option at OTM. Both these strategies can give you a better profit and comparatively a better opportunity to make money during the bearish trend.

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