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Praspan Janagiraaman replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 7 years, 5 months ago
The trader needs the futures/call/put as a protection against the market price variations and there is no need for the full amount to be paid.
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Praspan Janagiraaman replied to the topic Whether Strike price applicable for Future contract in the forum Stock market questions and answers 7 years, 5 months ago
The strike price is not applicable for the Future contract because the price is agreed in advance when the contract is signed.
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Praspan Janagiraaman replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 7 years, 5 months ago
The role of exchange is to prevent default and payment of MTM to the traders.
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Praspan Janagiraaman replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 7 years, 5 months ago
The Futures and Options are called derivative instruments.
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Praspan Janagiraaman replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years, 5 months ago
The contract is entered, the payment is made and the settlement is done immediately upon payment is spot/cash market.
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Praspan Janagiraaman replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 7 years, 5 months ago
Equity market is a market where the shares of the listed company is traded. Â It can be spot market or futures and options.
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Praspan Janagiraaman replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 7 years, 5 months ago
If buyer is getting a buying rights to buy it is call option and if the buyer is getting rights to sell it is put option.
Market decides the premium.
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Praspan Janagiraaman replied to the topic Whether Margin money is mandatory for both buyers & sellers of Option Contract in the forum Stock market questions and answers 7 years, 5 months ago
Yes. Â It is mandatory for both buyers and sellers.
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Praspan Janagiraaman replied to the topic Is MTM is applicable for Options contract if Strike price is reached? in the forum Stock market questions and answers 7 years, 5 months ago
The MTM is not applicable if the strike price is reached.
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Praspan Janagiraaman replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years, 5 months ago
Future contract is a contract to agree to buy or sell at a future date at an agreed price. Â Both the buyer and seller are making the deal, but not executing the deal in the same day and agreeing to execute at a future date.
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Praspan Janagiraaman replied to the topic How option contract differ from future contract? in the forum Essentials of Trading Instruments 7 years, 5 months ago
Future contract – It is the agreement to buy a share at the agreed date for the agreed price.
Options – The buyer has the option to buy or sell, but does not have any obligations and pays premium to the seller for signing the contract.
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Praspan Janagiraaman replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 7 years, 5 months ago
Pros –  With proper analysis one can make good money in the market.
Cons – We can lose our entire money if we do not do proper analysis.
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Praspan Janagiraaman replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 7 years, 5 months ago
Margin-Â Caution deposit given to the exchange to prevent default.
MTM : We have to either pay or realize the money earned on a daily basis.
Strike price- The price at which the call or put option can be exercised.
EXPIRY DATE: Â Settlement date of the contract is expiry date.
Lot size – The quantity agreed by the party offering to buy or sell i…[Read more]
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Praspan Janagiraaman replied to the topic How Stock exchanges ensure the traders counter party risk? in the forum Basics of Stock Trading 7 years, 5 months ago
The stock exchange uses the deposit from the brokers in case of default to ensure that the transaction is completed successfully. Â If the seller does not deliver the shares the exchange will buy the shares in the auction market at a higher price and also charges penalty to the seller.
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Praspan Janagiraaman replied to the topic How much time required to do trade? in the forum Basics of Stock Trading 7 years, 5 months ago
There is no particular time requirement for trade.  The trade happens instantly when the price of the buyer and seller matches.
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Praspan Janagiraaman 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 7 years, 5 months ago
The stock trading takes place in stock exchanges.
The broker acts as intermediary  between the buyer and seller.
Exchange is the place where the transactions take place and it is responsible for fulfilling the contract made by the brokers.
SEBI is regulator of securities markets in India, protects the interest of investors.
Government m…[Read more]
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Praspan Janagiraaman replied to the topic What is online trading? in the forum Basics of Stock Trading 7 years, 5 months ago
Buying or selling of shares via Internet is online trading, without personal contact.
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Praspan Janagiraaman replied to the topic Who decide the stock price? in the forum Basics of Stock Trading 7 years, 5 months ago
The demand and supply for the particular stock will decide whether the share price will go up or go down.
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Praspan Janagiraaman replied to the topic What happens if I quote high price to buy a stock compared to its current market price? in the forum Basics of Stock Trading 7 years, 5 months ago
Even if we quote high price for a stock compared to the current market price, the trade will be executed only at the highest selling price in the market, because the price is only up to the price quoted and not at that price.
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Praspan Janagiraaman replied to the topic What is Trade Plan? Why it is essential in the forum Basics of Stock Trading 7 years, 5 months ago
The trade plan is essential for identifying the proper sector, share and the entry and exit price.
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