Beginners,  How To

How to Buy and Sell Shares Online in Nepal? Complete TMS Guide

Looking for a complete guide to buy and sell shares online in Nepal? Check out this complete TMS guide to buy and sell share online in Nepal.

How to Buy and Sell Shares Online in Nepal? Complete TMS Guide

In one of the earlier posts, you have gained an overview on creating a stock trading account which allows you to create an account for buying and selling stocks either offline or online. The covid-19 pandemic has been a crucial driving factor for the development of digital stock trading. Along with digital transactions related to banks, you can now create an online stock trading account and start to buy and sell stocks right from your mobile or computers with an internet connection without having to visit a stockbroker’s office. In this article, you’ll know everything about buying and selling stocks online in Nepal.

If you are a complete beginner, make sure to go through the beginner’s guide once.

As discussed in an earlier article, you’ll need an online stock trading account. If you don’t already have one, check this article on ”How to create a stock trading account in Nepal?”, which provides a complete overview of requirements and procedures on creating a trading account. After you have registered for an online trading account (aka TMS account) with a broker and received the login credentials, you are good to follow this tutorial.

This article mainly focuses on how you can buy, sell stocks from your TMS account online, post-buying and post-selling processes , and everything you need to know before you make your first trade.

Make sure you have your client code(which is a 10 or 11 digit unique code) and your login password with you. First head over to your broker’s Trade Management System’s login panel. Since there is a single common TMS portal at the moment, you can access your broker’s TMS website with the link as https://tms<brokerno>.nepsetms.com.np/login (replace brokerno with the broker number you have created an online trading account with). Enter the credentials and Login to access the TMS Dashboard.

First, let’s see a quick overview of the TMS dashboard. Let me provide some details about different menus on the sidebar of the TMS dashboard.

tms dash

My Information: As the name suggests, it displays your account information like general information, collateral details, transaction summary, and other details.

Fund Management: With this menu, you can manage your collateral (Load, request for refund, or view history and statement) and also view your fund transfer history(only if you had made a settlement via the TMS dashboard).

Order Management: This is the main option we will be working with for this article. It is where you’ll place your order for buying and selling stocks.

Trade Management: You can view if your trade has been settled and also view older trades.

Market Data: You can check the current market details with this menu. It encompasses options for Live market data, market depth for a particular stock, and live top losers and gainers in the current market.

Broker Back Office: You can view your current DP holdings i.e. the stocks you currently have in your account. You can only sell the stocks that you have in DP holdings as displayed in this section.

Now we’ll see two different sections on buying and selling stocks online.

Before getting into the actual buying and selling procedure, you can see that there are four checkboxes (Continuous, Pre Open, Odd Lot, and Special Pre Open) that indicate four different types of market sessions. There are different timings and rules for these sessions. Here’s a brief overview of these sessions:

session

  • Continuous: This is the actual normal “market time” which runs from 11:00 am to 3:00 pm on the days the stock market open. It is the main session and the actual session we will be focusing on. There can be an increment or decrement upto 2% on LTP for the single trade and there can be a fluctuation of upto +-10% on the last closing price on a trading day.

  • Pre Open: It is a 15-minute trading window where you can buy and sell stocks with a 2% upper and lower limit on the last closing price that runs from 10:30 to 10:45 am. All the orders are completed at the end of the Pre Open(if orders match) session meaning if you cancel an order before 10:45 even if the orders are matched, the trade won’t be executed.

  • Special Pre Open: If the stock which issued an IPO recently is to be listed, it is first traded on Special Pre Open session where the first trade on a limit set by NEPSE can be executed during the Pre Open session duration.

  • Odd Lot: The minimum amount of units that can be traded in all the above sessions is 10. If you want to sell less than 10 units of stock, then it has to be done with the Odd lot option. For Odd lot, the exact amount and units have to be matched for the trade to be executed.

Read: How to apply for IPOs in Nepal?

Buying Stocks Online In Nepal with TMS:

Before placing an order for buying stocks with online TMS, you need to know a few things beforehand. Almost all stock brokers ask for collateral which is an amount that has to be paid beforehand you buy stocks with your TMS account. After that, the stockbroker will set a limit on the trading amount based on the collateral paid.

To place a buy order on the TMS dashboard, click on Order Management on the left sidebar on the dashboard and then click on Buy/Sell option. To make a trade during the 11:00 am to 3:00 pm trading window, make sure you have the Continuous option selected on the top bar of the buy/sell trade box. Also, make sure you have the LMT order type selected.

tms 1

As you can see in the above image, there’s an option to slide between Buy and Sell on the top right corner. you’ll have to slide to the Buy option to buy stocks. This will turn the whole buy box to turn to blue color.

Now we’ll search for the stock we are interested in buying. In this article, I have no intention of recommending the stocks that you must have in your portfolio rather the actual steps on buying a stock when you have decided which stocks to add to your portfolio.

All the things mentioned above are set by default in most cases. Now the actual action to buy the stock starts here. Make sure that EQ INST has been selected. You need to enter the symbol of the company’s stock to see the details like market depths, Day’s high and low, the lower and higher limit you can set for buy and sell, and others. Next, enter the quantity you want to buy on the QTY field. Then enter the price you want to buy the stocks in the PRICE(NPR) field. The price needs to be between the LOW and HIGH prices. You can choose any of the options on the Validity option based on your preference.

  • Day orders are valid till Market close. They are canceled if they are not matched. The remaining quantity of the partially traded stocks is also canceled on market close.

  • GTC order is available till matched or manually canceled. They are valid for 15 days and canceled automatically if not matched.

  • GTD order is active till the defined date (can be set up to 21 days maximum).

  • AON Order needs to be completely matched in one transaction or they do not match at all. The order is canceled on market close if not matched.

  • FOK (Fill or Kill) orders are executed immediately and completely or not at all.

tms 2

After you have filled in all the details and chosen the Validity of the order, click on the Buy option to place your buy order. Once you have placed the order, it appears on the Order Book section in the right corner of the box.

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You can also view the order in Daily Order Book. Navigate to Order Management > Daily Order Book.

Open and Partially traded orders are shown in the Open tab and completely traded and canceled orders are shown in the Completed tab of the Daily Order Book.

tms 4

You can modify and cancel the order by clicking on the pencil and cancel icon respectively on the Daily Order Book.

Post Buying Procedures:

After you have bought some shares from the TMS, the next step is to make a payment for the transaction. You can make a payment for the stocks you buy with the ConnectIPS payment gateway or online banking. I will be showing the connect-IPS way of making a payment to the broker for the stocks you buy.

The total amount you have to pay will be shown on the TMS dashboard. Almost all stockbrokers also notify the customers with an automated SMS with the actual amount to be paid. After you know the actual amount to be paid, next login to your ConnectIPS account and navigate to Financial Institution > Capital Market > Broker’s Payment. Then, choose the account you want to pay from, the amount to be paid. Select your broker, enter your mobile number and client id and click on the Make Payment button.

ips

Next, you’ll be asked to enter the 6 digit pin code to execute the payment. Enter the pin code and confirm the payment.

After the payment has been made, you will receive shares on your Demat account after T+2 days. If it goes beyond T+2 days you can try contacting the broker office for the settlement.

Read: How to Demat Physical Share Certificates in Nepal?

Selling Stocks Online in Nepal with TMS:

The selling process is more or less similar to the buying process mentioned earlier. But you need to keep these things in mind before placing a sell order in TMS.

Navigate to Broker Back Office > DP Holding to see the stocks that are available in your TMS balance. You can only place the sell order of the stocks and upto the quantity that is shown in the TMS balance on the DP Holding of your TMS dashboard. After you have made sure that the stock you want to sell and the quantity are available on the TMS balance, let’s get to the next step of placing the order.

To place the sell order, navigate to Order Management > Buy/Sell. Then slide the option on the right saying Buy or Sell to the left which turns the box to red color. Then enter the stock you want to sell and the quantity and price for the sale. The validity options are the same as mentioned above in the buying section. After you have clicked on the Sell button, you have successfully placed the sell order.

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Once the order is matched, it becomes a trade. Orders can be partially traded or completely.

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You can view your order in Daily Order Book and see for complete or partial trade as mentioned earlier. The sell orders can be modified using the edit and cancel options.

Post Selling Procedures:

There’s more to selling stocks than the procedures on the TMS dashboard. You need to transfer the stocks you sold to your stockbroker in order to get your payment. If you fail to do so in time, you may be fined 20% of the stocks you sold. This is why so must make sure that the stocks you are selling are in your Demat account before placing the sell order.

I would recommend transferring the shares you sold on the same night you make the sale. I usually get my transfer request at around 8 pm in the evening. If you make the transfer before the market opens the next day, it’s a safe play.

To make the transfer, log in to your Meroshare account and navigate to My EDIS > Transfer Share.

But before the transfer request appears on this page, you need to verify the purchase source, calculate the weighted average cost price and the holding days to calculate the tax for the transactions. You need to do it once for all stocks. To do this, go to My Purchase Source > Purchase Source from the sidebar of your meroshare dashboard. Then enter the Script you want to calculate the WACC for and click search. It will show all the different script transactions, select all the scripts and then click Proceed. Next click on the checkbox that asks that you agree that the entered details are correct. Then click on the Update button.

tms 7

The holding days can only be updated when you make a sale while the WACC can be calculated once the stocks start appearing on your Demat account. To update the holding days, navigate to My Purchase Source > My Holdings.

tms 8

The holding days are used to calculate the capital gain tax on your initial investments. To update holding days, navigate to the My holdings tab select the script on the Script dropdown option. It will only display the scripts whose WACC has been calculated and has been sold on the secondary market. Then all you have to do is click next and agree to the disclaimer message and click on the Update button.

Transferring Share:

The next step is to transfer the sold shares to the broker. You can do this by navigating to the My EDIS > Transfer Shares tab on the meroshare dashboard. It will show all the transfer share request for the sold stocks whose WACC and holding days has been calculated.

To transfer the shares, click on the View detail button next to the settlement ID.

tms 9

Next, you’ll have to approve the transaction. Select the transactions, make sure the traded quantities are correct, and click on the Proceed button. Next, you’ll have to agree that the details are correct and make the transfer.

The transferred share units will be deducted from your Demat account the next day.

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Once you have completed these procedures, the selling process is actually completed. Most stockbrokers require you to make a call after T+2 days to process the payment. You can contact your broker 2 days after the settlement to make a payment to your bank account.

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