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Poojitha Konduru replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 6 years, 11 months ago
Margin: It is the caution deposit made to the broker by the trader, which will be utilized by the exchange in case of emergency
MTM: Market to Market is where cash settlement is based on a day to day basis.
Premium: THe amount paid by the buyer to the seller to sign the contract
Strike Price: The price at which the buyer and seller agree to…[Read more]
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Poojitha Konduru replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 6 years, 11 months ago
PROS : Trader can trade in equity, futures or options.
Trading can be done through technical analysis
CONS: Â Highly Volatile, hence high risk associated
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Poojitha Konduru replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 6 years, 11 months ago
In Future option the deal is fixed between the traders and the settlement takes place at a future date.
The call or put option is required to reduce the downside risk.
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Poojitha Konduru replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 6 years, 11 months ago
Derivative Instruments are Futures and Options.
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Poojitha Konduru replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 6 years, 11 months ago
Equity market is buying and selling of equity stocks that are listed in the exchange. It is a market where the shares are traded equally.
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Poojitha Konduru replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 6 years, 11 months ago
Future Contract is an agreement made between the buyer and seller to sell an asset at a fixed price on a future date. If on the future date the price increases, the seller compensates the buyer and vice versa happens if the price drops.
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Poojitha Konduru replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 6 years, 11 months ago
A spot market or a cash market is where the cash & product dealings happen immediately between the buyer and seller, where the buyer gets the product and seller gets the cash on the spot. Spot in share market means the deal between the traders happen within the opening and closing time of the market (i.e) within a day.
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Poojitha Konduru replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 6 years, 11 months ago
The exchange should protect the counter party risk if any by means of collecting the deposit and make the deal successful between its traders.
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Poojitha Konduru replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 6 years, 11 months ago
In a CALL option the buyer of the contract has the right to BUY from the seller at the strike price that is fixed & the contract can be executed on a fixed date. The buyer has no obligation with respect to this contract.
In a PUT option the buyer of the contract has the right to SELL at the strike price that is fixed <span style=”line-height:…[Read more]
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Poojitha Konduru replied to the topic How option contract differ from future contract? in the forum Essentials of Trading Instruments 6 years, 11 months ago
In a future contract the buyer or seller can buy or sell shares with obligation. In an option contract the buyer has the rights to buy or sell shares without obligation.
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Poojitha Konduru replied to the topic How Stock trading take place? – Explain the role of broker/exchange/ SEBI/ Govt/ BANK? in the forum Basics of Stock Trading 6 years, 11 months ago
Stock Trading happens online provided a DEMAT account is opened by the trader via a broker which is registered with SEBI
Stock Broker: An intermediate between the stock exchange and traders, who helps in facilitating the trade between the buyer and seller.
Exchange:Â <span style=”line-height: 1.5;”>It is a platform where buyers and sellers meet…[Read more]
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Poojitha Konduru replied to the topic How Stock exchanges ensure the traders counter party risk? in the forum Basics of Stock Trading 6 years, 11 months ago
The Stock Exchange facilitates a trade smoothly with the help of an intermediate, who is the broker. A broker collects his caution deposit from its traders, hence if a counter party risk appears, the stock exchange takes the brokers caution amount to end the deal peacefully.
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Poojitha Konduru replied to the topic What is online trading? in the forum Basics of Stock Trading 6 years, 11 months ago
Online trading is a platform to buy and sell shares through a broker via DEMAT account.
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Poojitha Konduru replied to the topic Who decide the stock price? in the forum Basics of Stock Trading 6 years, 11 months ago
Market also known as the buyers and sellers decide the stock price based on the demand and supply.
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Poojitha Konduru replied to the topic How much time required to do trade? in the forum Basics of Stock Trading 6 years, 11 months ago
It might vary from person to person depending on the option they are willing to take and the price and volume they prefer. When the Buyer and Seller match their requirements, a trade takes place.
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Poojitha Konduru replied to the topic Can I trade NIFTY, SENSEX ? in the forum Basics of Stock Trading 6 years, 11 months ago
NIFTY & SENSEX are market indices. Buying or Selling shares of a market index is not possible, but Futures & options can be used to trade NIFTY and not SENSEX.
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Poojitha Konduru replied to the topic What is Trade Plan? Why it is essential in the forum Basics of Stock Trading 6 years, 11 months ago
Trade Plan is understanding the risk & reward ratio either by fundamental or technical analysis which is required to trade profitably in the market. A good trade plan acts as a strategy to make good returns.
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Poojitha Konduru replied to the topic Why do people choose stock trading? in the forum Basics of Stock Trading 6 years, 11 months ago
Stock Trading is chosen, as it is a legalized platform to earn or loose money in a short or long term.
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Poojitha Konduru replied to the topic What is the difference between Trading and Analysis? in the forum Basics of Stock Trading 6 years, 11 months ago
Trading is buying and selling of shares by the traders in the market.
Analysis is studying the price patterns, Demand & Supply, Charts, Company profile and other related details  before trading in the market. It helps us in providing a clear picture of the market. Analysis is of 2 types Fundamental & Technical.
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Poojitha Konduru replied to the topic Is Stock trading is gambling or Business? How? in the forum Basics of Stock Trading 6 years, 11 months ago
Stock Trading is a Business if the rewards are higher than the risks associated with it. Stock Trading is a business if its traded with knowledge and discipline.
Stock Trading can be a gamble if the risk associated with it is higher than the returns, its purely based on luck factor.
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