Stocks can be considered a tool for building wealth, as they are a part of almost every investment portfolio. They represent the ownership of a company and are bought in the form of shares. Shares refer to the stock of a particular company. Your stake in a company depends on how many shares you possess, because these are considered a part of the company’s capital.
The popularity of investing in the stock market is increasing constantly. Today, investment in stocks and shares is not limited to the well to do; even the average middle-class is getting into it in droves. The opening up of markets with advanced trading technologies has made owning shares easy for everyone. However, if you are planning to invest, do not depend on luck to get you returns. Investment in stocks is considered a very risky affair. It requires a high rate of return.
You can invest in international stocks as well. When a company performs trading in a stock market of another country, their stocks are known as International stocks. These stocks are traded like the UK stocks or, for that matter those traded in the Nasdaq in the US. All the stock exchanges in the world work in the same manner.
There is no guarantee when it comes to Investment in stocks but if you are ready to take a big risk then you can expect great returns on your investment. Despite the risk factor this form of investment has outperformed other investment options like bonds or saving accounts.

Renting shares is fast becoming one of the most talked about Stock Market Investment strategies. More and more investors are looking at creating income from their shares and capital growth from property. But what is share renting? Is it legal and can anybody do it? Let’s have a look at the basic concept of renting shares and see if this investment strategy is something that everybody should have a look at. Renting out shares is very similar to leasing out your property for rent. The basic share renting strategy is as follows. Step 1/ Buy a parcel of shares. If you are in Australia you will need to buy in lots of 1000 whereas in the US you can buy in lots of 100. Step 2/ Sell a one month call option, one strike price out of the money. Step 3/ Enjoy yourself for the month e. g. Go to the beach, watch the footy etc. Step 4/ This will depend on where the share price is at the end of the month. Read below for more details on renting shares. Now if this doesn’t make much sense I will now try to explain it in some more detail. The reason why you need to buy your shares in groups of 100 (1000 in Australia) relates to step 2. Call options are sold in lots of 100 shares e. g. If you buy 1 call option you are actually buying a call option for 100 shares. What is a call option? A call option gives the buyer the right but not the obligation to buy a set number of shares, on or before a set date, at a predetermined price. For example Lets say the stock ABC was trading at $100 and somebody bought a call option at $105 that lasted for one month. This would give them the right to buy ABC at $105 no matter what the actual price of ABC was at anytime during the next month. In order to get this right, the person buying the call will need to pay the seller a premium. This is where we come in. People that rent out their shares get paid by the people who buy call options. So let’s say we buy 100 ABC shares at $100. The next thing we would do is sell a covered call (it is called covered because we actually own the shares) at $105. We always want to sell a call option that is out of the money (above the actual price of the share). Why because that way if we are forced to sell our shares we will at least be forced to take a profit. For selling a one month call at $105 we are likely to receive about 3-6% of the shares price. So in this case let’s assume that we receive $5 per share. I’m sure you don’t need any help with step 3 but you might be wondering why we can simply forget about our shares rather than monitoring them each day. The answer is simply because we aren’t too concerned whether they share price goes up or down. Why? Well lets now have a look at what would happen should the share price go up, down or sideways. Share price goes up above $105 to $108. We will be forced to sell our shares for $105 despite their actual price being $108. This sounds like a very bad out come but if you have a closer look it is actually a great outcome. We bought our shares for $100, sold them for $105 and also got paid $5 for the month. Therefore we actually made a $10 profit whereas if we had of just bought the shares instead of renting them out we would have only made $8. Share price goes sideways and remains at $100. We will get to keep our shares because no one is going to pay $105 for shares that could be bought for $100 on the open market. So in this case we have made a profit of $5 whereas if we hadn’t rented our shares we wouldn’t have made one cent. Share price goes down to $95 Once again we will keep our shares. Had we not rented out our shares we would have lost $5 but because we received the $5 premium we actually don’t loose a cent. So as you can see renting shares is actually quite a safe wealth creation strategy. Effectively what you are doing is trading of your potential to make a massive gain in one month for a regular monthly income. Which one is better? Well if you average out your percentage returns from share renting over the year you may be surprised at how effective it can be. Share renting returns generally fluctuate from 20-80% per annum. With a modest average of about 40% – better than bank interest I’m sure you will agree.

With the onset of technology and its augmentation, everything today has become â??onlineâ?? and this includes trading! All non-residents today trade online. Almost all the registered brokers today offer Online Trading facility in Equities for non-residents. But of course, there are certain prerequisites for being able to trade online. The non-resident must have/open: 1. Bank account with a Portfolio Investment Scheme (PIS) Designated Bank (DB) 2. Demat account with broker 3. Broking account with broker. Before proceeding further, let us tell you what exactly all these accounts are. PIS Account: Portfolio Investment Scheme, better known as PIS, account is mandatory for all Indians living abroad, and enables non-residents to invest in the shares of Indian companies based on repatriation or non-repatriation, in respect of shares or convertible debentures sold or purchased through a registered stock broker on a recognized stock exchange. Please note that other means of acquiring shares (like bonus shares, shares purchased through IPO etc. ) is not covered under this scheme. Demat/DMAT Account: Dematerialised or DMAT account is similar to any conventional bank account, the only difference being that the latter deals with money, while the former deals with sale and purchase of stocks. Maintained with a Depository and opened through a Depository Participant (DP), we at nriinvestindia. com help our clients to open such an account in India. Broking/Trading Account: The name might sound complex, but trading account is nothing but an account opened with a stock brokers, enabling you to buy and sell shares or any other financial instruments through them. Now that you know what these accounts mean, we now proceed to tell you how to open these accounts, and the various documents you will need, if any, for the same. Opening a Bank Account with a PIS DB: To invest in the secondary market, non-residents require the permission of the Reserve Bank of India (RBI), and for this you need to open a bank account with a DB under the PIS. The fund for investment in the market has to be routed through the PIS Bank account. The brokers can have a tie-up with UTI Bank, HDFC Bank, IndusInd Bank etc for this purpose since these are the DB of the RBI, and can hence issue RBI approval to non-residents. The account can be opened based on whether you want benefits of repatriation upon investing (NRE Account) or do not wants benefits on repatriation upon investing (NRO Account). Brokers will send you a trading account opening kit enclosed with the application forms for opening Bank account as well with any one of the above-referred DB under the Portfolio Investment Scheme. This will facilitate online trading for non-residents around the world. Upon receiving these forms, the DB will open two bank accounts â?? a PIS account and non-PIS account. All investments and sale proceeds will be done through the PIS account. Please remember that the PIS account needs to be funded before the broker can make investments. The non-PIS account functions like any usual Savings Bank non-resident account, and transactions other than those under the PIS account will be routed through the non-PIS account. In case of NRO accounts, the non-PIS transaction would include payment to IPO and ESOP, dividend payment, amongst others. You need to produce the following documents while opening a PIS account: * Attested copy of Passport. * Attested copy of Valid VISA copy /Work permit (Iqqama for middle east countries). * Details of existing shares holding both in NRI status & resident status duly signed. * 3 Passport size Photographs. The DB shall send the A/c opening intimation directly to the clients & a copy of the RBI approval is delivered to the broker. On receipt of the RBI approval from the DB, the broker proceeds to the next step – opening a Demat and Broking account. Opening a DMAT account with a broker: Based on RBIâ??s approval, the broker will open the DMAT account in the same status (NRE or NRO) and pattern (Joint or Single) as is the account with the bank. Shares are held here in an electronic form and shares bought by the client get credited on the second working day from the day of purchase. Example: Shares bought on Monday will be credited on Wednesday; those bought on Tuesday will be credited on Thursday, and so on. Opening a Broking/Trading account with a broker: Broking account is a trading account with the help of which the client does the transactions of â??buyâ?? and â??sellâ?? in the Secondary Market. The broking account is opened after the DMAT account gets opened, and the former is linked with the latter. Now that you know the process of opening the various accounts, we will now inform you, in detail, about the trading process and the transactions of â??buyâ?? and â??sellâ??. Trading process: To enable the client to trade, the client is given, generally, a Trade Login User ID and a password. All the client has to do is place the “Buy” and “Sell” Orders on the Broker’s Trade Page. Most of the Brokers have user-friendly Trading System thus ensuring that the client has a pleasant trading experience. Buy: By moving funds in her/his PIS account to the broker, the client can initiate a â??buyâ?? transaction. The movement of the fund is done in less than a minute and accordingly the Trading Limit is updated facilitating the client to buy shares. Once the NRI has bought and/or sold the balance money, if any, the same has to be transferred by the client from her/his PIS account on receipt of the trade confirmation, and the Broker then sends it after the Market closes for the day. The National Stock Exchange (NSE) settles the delivery for shares bought on the second working day (example: if you bought a share on Monday it will be credited to your account on Wednesday and so on) from the Date of Purchase. Sell: You need to have shares in your DMAT account to initiate a â??sellâ?? transaction. The trading system would reject your order otherwise. The shares bought are, as mentioned above, credited to your account on the second working day and available for trade on the third day. The NSE settles the sale proceeds on the second day from the date of sale and the broker wires the money to the clientâ??s PIS account, on the second day itself. The DB credits the proceeds into the clientâ??s PIS account after Calculation Gains and deducting tax if any. The client can get an update on the Broking account by looking at the â??Accounts Statementâ?? on the brokerâ??s trading website. The Daily Account Statement gives details of Funds Transfers – both for transfers done by the client to Broker & by Broker to the clientâ??s PIS A/c and the date-wise break-up of shares bought or sold by the client. VALUE ADDED SERVICES RENDERED BY THE BROKER FOR ONLINE NRI CLIENTSA broker will not ONLY take care of your transactions. She/he provides a lot of innumerable services. These include:One-stop shop: Most of the brokers will open all the three accounts for you by coordinating for the same with the DB. So all the applicant has to do is fill up the relevant forms and give it to the broker. Trade confirmations: Brokers will email you the details of the trade done for the day which will include confirmation for the trade done and the brokerage fee charged for the same. Report transaction: Brokers will report every transaction done by a client to RBI by the DB. Contract notes: In addition to the emails, the client can view their Digital Contract notes on the website. PIS account queries/reconciliation: In order to ensure that the PIS account is regular, the broker shall coordinate with the DB and clarify all queries related to PIS transactions. Please note that every transaction done in the Trading account has to be reported through the DB. Offline orders: Some brokers accept offline orders through emails, fax, and even over the phone, after confirming the identity of the client, thus permitting even those who do not have access to Internet/Computer. The brokers may also offer opening an account for liquidating the shares bought in Primary Market. They will also obtain the Auditorâ??s Certificate for such sales and the proceeds will be credited to your NRE/NRO Account after the tax has been deducted. Processing of IPO Applications: The broker, on behalf of NRI clients, can apply for IPO relieving the client off the paper work. All the client has to do is indicate the number of shares to be applied for, either through an email or by filling the online application available on the brokerâ??s website (most of the brokers provide such services). TIP â?? Recommendation/Call of Stocks: Thanks to technology, brokers, today, send SMS and/or email alerts keeping their clients updated about the market. Clients having considerable holding in a particular stock also receive price alerts in addition to the latest market news. Online helpdesk: Due to the boom in technology, brokers today are able to assist their clients through an â??online helpdeskâ??, hence certifying that suggestions/solutions are provided to the clients immediately. TRADING PROCESSNon-residents require the following documents depending on whether they are NRI, PIO or OCI:Non-Resident Indian (NRI) requires PAN Card and a copy of the Indian Passport. Person of Indian Origin (PIO) requires PIO Card, copy of Foreign Passport showing Indian birthplace and PAN Card. Overseas Citizen of India (OCI) requires copy of OCI Card and PAN Card. For further details please contact us at: contact@nriinvestindia. com or you may checkout the website: www. nriinvestindia. comNon-residents can invest in both Primary and Secondary Markets with the help of a registered broker. These brokers offer a wide range of services warranting that the clients feel at home while making investment decisions. THINGS NON-RESIDENTS CAN DOVis-à-vis trading, non-residents today can do various kinds of trading as per their convenience. Some of them include:Online Trading (stocks and derivatives)Various brokers give you tools used by institutions and professionals for trading in the Capital Market. Many of them provide an Online Trading Platform certifying non-residents to transact paper-free trading in â??Equities and Derivativesâ?? segments. Such Online Trading System provides the most distinct services like Streaming Market Watch, Technical Analysis, AMO (After Market Order), Online Funds Transfer and NRI Online Helpdesk facilitating you to have a pleasant trading experience. Offline TradingAs said earlier, brokers, today, allow clients to place orders for trade through phone, email and/or fax. Mutual Fund InvestmentsNon-resident can invest in Indian Mutual Funds with the help of registered distributors or brokers. Some of them also offer simplified process that is free of all paperwork. These distributors also provide updates on the latest top funds, NAV, and new fund offer. They also provide performance report of various funds to ensure smart investments are made in the Mutual Fund segment. Investment in Initial Public Offer (IPO)Investors can make paper-free investments through select brokers in the Primary Market â?? Initial Public Offer (IPO). Various details such as current and upcoming IPOs, performance of past IPOs, basis of allotment etc are provided by them making possible for their clients to make hassle free IPO investments. ESOP TradingBy offering value added service in the form of ESOP Trading, few good brokerage houses enable clients to liquidate the Stock Option given by their Employers and remit abroad the sale proceeds or reinvest the same in the Secondary Market. Dematerialisation of Shares bought in Primary MarketUsually brokers assist clients to convert their physical share certificates to electronic form (DMAT Form). All that the client has to do is open a NRI account and submit the DMAT Request along with the necessary certificates, and your broker will take care of everything else. Important: The content above provides general information regarding how brokers help non-residents to open a trading account and let them trade. However, services and regulations may differ from broker to broker. Please check with your chosen broker for the same.