InvestorQ : What exactly happens when you buy a stock? Can you explain the entire process?
Swati Naik made post

What exactly happens when you buy a stock? Can you explain the entire process?

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diksha shah answered.
3 years ago
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You need to understand the buy order with reference to the Trade Date (also known as the T-Day). Let us for a moment assume that you placed the Buy order on Monday. So Monday will be the T-Day for your order. Of course, placing an order is not enough. The order has to be executed and only then it becomes a trade. For example, if you place a market order, then it will straight away get executed at the best available price. But if you place a limit order and if the conditional price is not achieved then the order will not be executed and hence it will not become a trade.
Assume that on 27th Aug 2018 (Monday) you buy 100 shares of Reliance Industries at Rs.1,300/- per share. The total buy value is Rs.130,000/- (100 * 1300). The day you make the transaction is referred to as the trade date, represented as T-Day. By the end of trade day, your broker will debit Rs.130,000/- plus the applicable charges towards your purchase. Your actual cost payable to the broker will be slightly more than Rs.1,30,000 as other costs are also included in this calculation. These details of charges will be clearly mentioned in your contract note.
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