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Arun Kumar replied to the topic What is the Pro / Cons of Equity market from tradersā perspective? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Pros: Low risk – If the share value goes down, only the difference in price is lost.
Cons: Only after selling the share, it is liquidized. Whereas in derivatives, for every change in price at the end of the day, realization happens daily.
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Arun Kumar replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Settlement on the same day.
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Arun Kumar replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Low investment high returns.
And also daily realization of money as per value of the share at the end of the day.
Put option helps traders to do positional short.
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Arun Kumar replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years, 12 months ago
A contract signed between the buyer and seller of shares with an obligation that both the parties should execute the contract at the end of the contract term whatsoever.
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Arun Kumar replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Margin: It is a security deposit collected by exchange before signing a future or option contract.
MTM: Mark to Market. Settlement done based on the difference between signed target price and market price.
Premium: The amount paid by buyer to buy the option contract from the seller of the contract.
Strike price: The price at which the buyer and…[Read more]
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Arun Kumar replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Future contracts & Option contracts
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Arun Kumar replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 7 years, 12 months ago
The exchange regulates the contract between the buyer and seller in case of any dispute in the trade contract.
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Arun Kumar replied to the topic How option contract differ from future contract? in the forum Essentials of Trading Instruments 7 years, 12 months ago
In option contract, there is no obligation for buyer or seller to compulsorily execute the trade. Based on the price at the end of contract term, they can decide whether to execute the contract or simply drop it.
In future contract, both the buyer and seller are bound to execute the contract no matter what is the price of the share at the end of…[Read more]
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DINESH CHINNADURAI and
Arun Kumar are now friends 7 years, 12 months ago
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Arun Kumar and
boutha priya are now friends 7 years, 12 months ago
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Arun Kumar and
Manikandan are now friends 7 years, 12 months ago
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Arun Kumar replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Spot/ Cash market means the settlement is done on the same day.
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Arun Kumar replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Call option: Buyer gets the right to buy the share on a mentioned date with no obligation.
Put option: Seller gets the right to sell a share on a mentioned date with no obligation.
Buyer and seller negotiates the premium.
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Arun Kumar replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 7 years, 12 months ago
Equity market is a place where shares are traded.
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Arun Kumar replied to the topic What is the difference between Trading and Analysis? in the forum Basics of Stock Trading 7 years, 12 months ago
Buying and selling of shares is trading.
Studying the market based on price and volume is analysis.
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Arun Kumar replied to the topic What is Trade Plan? Why it is essential in the forum Basics of Stock Trading 7 years, 12 months ago
Trade plan is deciding when to buy and when to sell based on analysis.
It is essential in order to reduce the risk of losing money.
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Arun Kumar replied to the topic What is online trading? in the forum Basics of Stock Trading 7 years, 12 months ago
Online trading is Buying and selling shares through broker’s online platform.
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Arun Kumar replied to the topic Who decide the stock price? in the forum Basics of Stock Trading 7 years, 12 months ago
Buyers and sellers
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Arun Kumar replied to the topic How Stock exchanges ensure the traders counter party risk? in the forum Basics of Stock Trading 7 years, 12 months ago
Stock exchange gets caution deposit from brokers at the time of their registration.
In case of any settlement dispute between the buyer and seller, the exchange does the settlement with the money from the caution deposit.
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Arun Kumar replied to the topic How Stock trading take place? ā Explain the role of broker/exchange/ SEBI/ Govt/ BANK? in the forum Basics of Stock Trading 7 years, 12 months ago
Buyer -> Buyer’s Broker -> Exchange -> Seller’s broker -> Seller.
BrokerĀ is an agent through whom buyer can buy shares or seller can sell shares in the exchange.
Exchange is the place where the actual settlements take place.
SEBI regulates the transactions and unbiasedly solves any disputes.
Government created SEBIĀ and regulates it.
Banks c…[Read more]
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