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  • Category: Stock Market

    How many times can I purchase shares of a single company in one day at different prices?


    Do you have a query about any limitation on the purchase of shares on a single day? Looking out for advice on purchase here? Here, on this page our experts shall respond to your query so that you can proceed with the purchase of shares.

    I want to purchase shares of a single company say ABC on a single day. The quotes may vary from 100.00 at 10 AM, 99.50 at 11 AM, 98.00 at 01 PM and 96.00 at 2 PM. I want to buy 100 shares @ 100.00 at 10 AM, 200 shares @ 99.50 at 11 AM, 300 shares @98.00 at 01 PM and 400 shares @ 96.00 at 2 PM AND hold the shares for a month, 2 months or a year.
    Is it possible to do so in terms of extant SEBI guidelines and rules and Indian Income Tax rules?
  • Answers

    6 Answers found.
  • There is no problem in buying the shares of a company on the same day multiple times. It is allowed. Only thing that is not allowed is as a retail investor you cannot sell them on the same day in case you wanted to do so. That facility is not for the normal retail traders like you and all of us. That facility of buying and selling same day is allowed to the day traders who are a different lot and trade on futures through margins and things like that. They buy a stock in the morning and settle the score of the contract by the evening. For them it is allowed to buy and sell same day.

    In fact for normal investors like you and us if we buy a share today then it will come to our demat account only after 2 days and when it is credited in our account and then only we can sell it. So before any sell order one should be alert and careful to find out whether the shares are in the account or not otherwise you cannot sell as the system would say that you do not have shares to sell. This is commonly known as T+2 convention where after 2 days of trading the shares will be credited in your account.

    As a normal investor, you can buy as many shares of a company at different times in a day and then keep them for whatever period you want. If you sell them within 1 year then you will have to pay short term capital gain tax on the profit you made and if you keep them for more than 1 year then you will have to pay long term capital gain tax as per the existing Income Tax rules of our country. If you sell them at a loss then this can be offset from the gain from other shares only and not from the earnings from salary or other sources. If there is a big loss which cannot be offset then it will spill over to next years and the benefit will be given against the profit of share selling in next years.

    Knowledge is power.

  • As per your narration you are buying shares for investment purposes. You are a normal small investor. You can buy any number of shares from the stock market during the allowed trade time at prices being quoted at that time. Of course this is subject to the margin /balance or credit conditions and terms for your trading account. For large and strong companies shares are being transacted in many thousands in one transaction itself. Such shares are dealt in large volumes in terms of numbers and price amount.

    However there are some shares which are not that much traded and do not have high capital (share base). In such cases there will be some circuit limit. The limit may b either in volume or high and low price traded in the same day. Many such shares are called penny shares and their price will be quite low.

    However in frequently traded shares of big,established companies such limits are not there generally. In your case anyway the numbers you want to buy are quite less and there will not be any problem .

    It is always better to do some home work about the companies whose shares you want to buy, if you do not have experience in stock market. You may deal in moderate , affordable amounts initially and in gradual course and gain experience . As an investor in shares without much expertise it may be better to buy and hold for some time rather than panic in normal small fluctuations. In the beginning it is prudent to del in shares of strong and well traded company shares.

  • As far as my knowledge goes you will have no problem to buy the shares of the same company number of tiles on a day. But you can't sell them on the same day. Only day traders can buy and sell on the same day. Once you buy the share of the company through your Demat account it may take some time to get posted into your account. Only after a day or two, they will appear in your account. Then only you may be able to sell them. If already you have some shares of that company purchased earlier and if you want to sell them you can do that.
    But there may be some restrictions on the number of shares you can purchase. This number will vary from company to company. Availability is one issue and even though they are available there may be some restrictions on the numbers.

    drrao
    always confident

  • There is no limit as such as how many times one can buy the shares of a company in one day at different times to take advantage of the fact that sometimes the price is low and sometimes it is high. If someone that is some big trader or big player in the market is doing that intentionally by buying a large quantity to fictitiously raise the share price and then sell it after 2-3 days then SEBI can-do the enquiry in the matter. Such things can draw the suspicion of SEBI. But it is about high investment and big players or traders and not related to simple investors like us. So, buy what you want and keep them for a desired period and sell at an opportune time.

    Thoughts exchanged is knowledge gained.

  • Purchase of shares of a single company can be carried out multiple times in a day and for that there is no restriction. It would depend upon to the extent of the availability of your spare money to be invested in shares. Once such transactions have taken place, the shares will be credited to your Demat Account after an incubation period of two days. You can sell them only after it is credited to your Demat Account but again there is a limit beyond which you cannot sell your shares existing in your account. This is applicable to all the investors except the brokers who can sell large volume of shares on the same day.
    However, you need to maintain some caution while purchasing shares of a particular company. You may follow the following basic rules -
    1) Go in the past performance of the company in terms of its financial health and its performance for the last five years. This would provide you a clear picture of its internal health.
    2) In case of any confusion regarding the intrinsic values of the shares bought by you, you may have the consultation of some reputed financial consultant attached to trading business.
    3) You should have the thorough feed back of the members on the board of directors. Their clean image would help you to have higher margin of profits in the times ahead.
    4) If you find it is better to have large amount of shares of the same company, you may negotiate with the broker by paying brokerage commissions and payment for the purchase can be enhanced by paying only 20 percent of the purchase price of the shares and the rest amount would be paid by the broker with some negotiations.
    In the initial phase. you should look into such shares having strong fundamentals.

  • You can buy and sell the shares of any company listed in the stock market more than once or say that again and again. However, the condition for this is that your account has sufficient funds or margin. The process of buying and selling a stock in a single day is called intraday trading and those who sit for a long time investing in stock are called long time investors. You can buy or sell the same stock repeatedly during share trading. But, for this, you will have to pay a brokerage ie commission for buying or selling your broker i.e. any company which has your Demat account. Apart from this, the tax will also have to be paid separately for every trade. You have to keep in mind that investing in stocks carries a lot of risks. If you can understand the results of the companies themselves, evaluate their shares, and understand the market move then only you should invest directly in the shares. Before investing in a company's stock, it is important to know its business, the true value of the shares, and the prospects of its business. Stock prices are not stable in the stock market. Generally, when the stock price is low or the weakness in the market is considered the best time to buy the stock.

    Swati Sharma

    Keep your Face to the SunShine


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