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Aravindan replied to the topic What is the average turnover in NSE only daily basis? Can any one manipulate the stock price? in the forum Understanding the Price Movement 8 years, 7 months ago
Around 2.5 Lakh crores.
Yes. Large players can manipulate stocks of small and medium companies.
But stocks in Nifty are difficult to manipulate.
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Aravindan replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 8 years, 7 months ago
Demand and supply drives the stock price. Price change often only for liquid stocks such as Nifty stocks. This is due to the large number trades taking place at a fast pace.
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Aravindan replied to the topic What is technical analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Past volume and price is used for technical analysis. No parameter of a companies true worth is considered. Only the market and not the company is analysed.
Various charting techniques and indicators are used to identify a trading opportunity.
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Aravindan replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Fundamental analysis is the correct method to evaluate a company as it involves analysis of various actual data about the company.
But retail investors can not do this as it needs lot of time and effort. Only large Institutional investors can afford to do this.
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Aravindan replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Fundamental analysis is the study of factors such as financial status, management, liabilities, competition, governance etc.
Many required information for analysis is not available in the public domain. This needs lot of money and effort. So this is possible only for big investment houses.
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Aravindan replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Technical analysis depends on the price and volume which is transparent and available to everybody. So anyone with the relevant knowledge can be successful with technical analysis.
But it is purely depends on the past data and does not identify companies true worth.
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Aravindan replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 8 years, 7 months ago
Big operators can easily manipulate penny stocks.
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Aravindan replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Analysis is required to identify profitable trading opportunities. With out analysis, trading will be just gambling.
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Aravindan replied to the topic What are different types of charts? in the forum Understanding the Price Movement 8 years, 7 months ago
Line chart, Bar chart and candlestick chart
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Aravindan replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Future Contract is an agreement to buy or sell a particular financial instrument at a predetermined price in the future.
Both the buyer and seller have the right.
Buyer and seller both pay margin money to avoid defaults.
The P/L is settled on a daily basis by the exchange
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Aravindan replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 8 years, 7 months ago
<span style=”font-size: 6.5pt; line-height: 115%; font-family: ‘Open Sans’, serif; color: #777777; background-image: initial; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: initial; background-repeat: initial;”>Future Contract is an agreement to buy or sell a…[Read more]
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Aravindan replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Pros
– Can wait endlessly with out any pressure
Cons
– Full amount required for a trade, means large capital is required
– Transaction cost is more
– Short position should be squared off on intraday basis
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Aravindan replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 8 years, 7 months ago
– Where the securities are traded
– The settlement happens in T+2 days. The buyer/seller gets the shares/cash on T+2 days
– Buyer has to settle the cash fully and seller has to provide the shares on the transaction day itself
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Aravindan replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Equity market is also called Spot/Cash market
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Aravindan replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Derivative instruments derive value from the underlying asset. So the price moves in tandem with the price of the underlying asset.
In Indian market the following instruments are available for trading – Futures, Options (Call & Put), Currency, Commodity
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Aravindan replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 8 years, 7 months ago
– Defining the Margin requirement for each security
– Deciding on which security is available for derivative trading
– Daily M2M settlement
– Monitoring and controlling the trades for a contract when it crosses a threshold limit
– Settlement process at the expiry
– Creating new contracts after expiry
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Aravindan replied to the topic How option contract differ from future contract? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Futures – Here the buyer has the right to buy and seller has the right to sell. The risk and reward for both of them is equal. There is only one contract available for trading (per security)
Options – In both Call and Put options only the buyer has the right to buy. The reward is more for the buyer. The premium is only the benefit the seller get…[Read more]
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Aravindan replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Leverage: The initial amount required for trading is only a small percentage of the total contract value which helps in trading high value transactions with lower capital.
Hedging: To secure the current investment, these instruments can be used to minimize the losses if it happens by paying a small premium
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Aravindan replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Margin: Caution deposit that varies for each security and fixed by the exchange. This is collected by the broker as part of risk management.
MTM: The P/L are settled on a daily basis by the exchange by crediting/debiting from the trader account.
Premium: Relevent to options. The seller fixes this and this is the only benefit he will get if the…[Read more]
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Aravindan replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 8 years, 7 months ago
Call Option – Where the buyer has the rights to buy with no obligation. When you are long you will buy the call option.
Put Option – Where the buyer has the rights to sell with no obligation. When you are short you will buy the call option.
Premium is decided by the buyer and the seller
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