Praveen N

It is the place where the buyer gets the product and seller get the cash immediately at the spot.

It is the place where the buyers and sellers buy and sell the stocks listed in exchanges.

Futures and options.

Margin: Caution deposit paid by the trader to the exchange.

MTM: Here the cash settlement is made day to day basis.

Premium: It is set by the buyers and sellers.

Strike price: It is the price at which the buyers and sellers agree to trade forecasting the futures.

Expiry Date: It is the date at which the contract expires.

Lot size: The…[Read more]

The exchange should ensure the risk with the counterparty.

Call options: The buyers have the right to buy with no obligation.

Put options: The sellers have the right to sell with no obligation.

Buyers and sellers set the premium price.

In future contract, the buyers and sellers have the right to buy and sell with obligations.

In options contract, the buyers and sellers have the right to buy or sell with no obligations.

Futures contract is the one where the prices are decided for the particular date but the settlement would not be made. If the price goes above the fixed price, the seller has to compensate to the buyer.

Pro: Good return in short term

Cons: Risk is high if the market is highly volatile.

Futures: The deal happens now, but settlement happens later.

Call and put option is used to reduce the downside risk.

Positional trading: Holding stocks for more than one day.

Intraday: Buying and selling should be done in one day.

If it’s a limit order, it would wait until it reaches that price or else it executes in the best order.

To place order one needs to have a Demat account registered with SEBI.

Types of order: Long and Short.

If it’s intraday order, then it’s oneday.

If it’s Cash and Carry, it depends on our interest to quit.

Yes, it’s possible. It’s called arbitrage trade.

Buying and then selling of shares.- Long.

Selling and then buying of shares.- Short.

Selling shares after it’s bought- Long unwinding.

Buying shares to cover the short position- Short covering.

Stock trading is a business if it’s reward is higher than the risk.

It is a gambling if it’s risk is higher than the reward.

Trading is the buying and selling of shares. Analysis is the pre-trading part, where we would be able to derive the plan for the trade.

To earn money in short term.

Trade plan is about risk management and profit making strategy, where we would be able to reduce the losses.

Stock trading occurs when the price of both buyers and sellers meet.

The broker is an intermediate between exchange and the trader who coordinates the buying and settlement of the stock from/to the trader.

Exchange is a place where both buyers and sellers meet.

SEBI is a regulatory body for all the investors.

Government has no role.

Bank also…[Read more]