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5 Ways To Earn Monthly Income From Stock Market

Stock Market

Every investor whether new or old, who are associated with the stock market, everyone dreams of making huge money. To earn monthly income in stocks, you need to develop strategies to protect your capital while investing and get good returns along with it.

If you want to make more profit, you need to have good knowledge about the stock market.

Invest in dividend-paying stocks

One of the best ways to make monthly income from the stock market is to invest in dividend-paying stocks. These stocks usually pay dividends monthly, quarterly, semi-annually or annually.

Dividend-paying stocks can be a great way for investors who want to grow their capital by making low-risk investments. The key step in choosing a dividend stock is to find a dividend stock that has a dividend payout ratio of 50%-60%.

This means that the company not only pays most of its income in dividends but invests extra cash for the future growth of the company. So, you must be careful about this before buying dividend-paying stocks.

Some companies invest most of their earnings on dividends and get involved in debt, which may result in them delaying paying dividends in the future.

The best way to avoid these problems is to invest in high-quality dividend stocks that have a history of increasing payouts.

A Dividend Aristocrats list of stocks include companies that are part of the S&P 500 that have raised or increased the amount of dividends they pay every year for at least 25 consecutive years.

Intraday Trading

In case of intraday trading, stocks are bought and sold within a specific trading session. For example, if you buy a stock at Rs 100 in the morning and sell it at Rs 102 in the afternoon, your intraday profit will be 2%.

Intraday traders must monitor market movements throughout the day. This is a lengthy procedure that requires technical expertise.

To avoid loss, a trader should use stop-loss-order. This will automatically sell your shares when the stock price falls below your stop-loss level.

Besides, using margin in intraday trading will help you to increase your returns. These are trading loans that brokers give to their clients at low-interest rates.

Detailed research of the market can help you make good profit in intraday trading. For this, you need to keep yourself updated with both national and international markets.

You have to thoroughly research the fundamental and financial details of the companies you are trading with.

Derivatives Trading

Derivatives trading is a formal financial contract of trading, meaning you can buy a large amount of the underlying asset for a small amount of money.

You can trade in different types of assets like stocks, currency, exchange rate, benchmark or commodity etc. It allows you to hedge against market price fluctuations, market arbitrage and make leveraged bets.

Major derivatives materials include future contracts, forwards, options and swaps. You can trade indices and single stocks using derivatives products on NSE and BSE. You can trade in currency and bond through this exchange.

In derivatives trading, you must deposit a certain amount of money i.e. margin in your trading account. By this you can buy more underlying material than the market rate.

This will help you earn more by buying single shares of the company. This can be done in various ways, such as delivery trading, where you can sell a certain amount of shares after a period of time.

Delivery Trading

Delivery trading is a type of stock market trading where you can buy long-term shares. This is one of the most common methods used by investors.

The main advantage of delivery trading is that you can invest in several stocks and wait for a good opportunity to sell when the price rises. As a result you can make good profit.

However, keep in mind that Delivery Trading takes a bit more time than Intraday Trading and requires patience with it.

The profit you will make from Delivery Trading will depend on the growth of the company, how much capital you are investing and how long you will keep it. So the right strategy is very important to get profit in Delivery Trading.

Options Trading

Options trading is a type of investment that can be used to generate regular or monthly income from the stock market.

If the investor’s capital is limited, he can make good profit in this way despite having limited funds. This can help them diversify their investment portfolio.

Traders can leverage to maximize their profit, but they should be cautious not to leverage too much. But there is risk in it and there may be loss if trading is done incorrectly.

Another benefit of option trading permits traders to earn profits over a the shortest amount of time. This is a good way for those who want to earn consistent income from stock market.

But whether you are a new investor or an experienced investor, it is very important to know the pros and cons before starting options trading. Before that you can set your financial goal and contact a broker who can help you in this regard.



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