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Santhosh Chakravarthy replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 8 years, 3 months ago
Futures contract is the agreement between the buyer and a seller on a particular asset on an pre-agreed price with an end date. Both the parties has to pay caution deposit to the exchange. The price difference will be settled between the buyer and seller on a daily basis by the exchange.
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Santhosh Chakravarthy replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 8 years, 3 months ago
Futures and Options are the derivative instruments
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Santhosh Chakravarthy replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 8 years, 3 months ago
<span style=”color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>Exchange is the one who monitors everyday market price and neutralize the price difference from the agreed price between traders</span>
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Santhosh Chakravarthy replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 8 years, 3 months ago
Call option is that the Buyer has the rights to BUY and PUT option is that the buyer has the rights to SELL. Premium is decided by both the buyer and seller
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Santhosh Chakravarthy replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 8 years, 3 months ago
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>In all these Futures,Call as well as Put options, there is no direct intervention of exact amount and here only the difference is exchanged between the parties.</p>
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Santhosh Chakravarthy replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 8 years, 3 months ago
Margin refers to refundable amount paid to the broker in futures.
MTM means Mark To Market.
Premium is the amount paid by buyer to seller for signing the options.
Strike price is the agreed price for the deal.
Expiry date is the date where the contract becomes matured.
Lot size is about the no. of shares going to be traded. -
Santhosh Chakravarthy replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 8 years, 3 months ago
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>Margin refers to refundable amount paid to the broker in futures.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Open Sans’; font-size: 13px;…[Read more] -
Santhosh Chakravarthy replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 8 years, 3 months ago
Pros:
No limit on the number of stocks traded.
Stocks of all the companies listed on the exchange can be traded.
Cons:
The short position has to be covered within the end.
Entire payment should be done in one installment. -
Santhosh Chakravarthy replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 8 years, 3 months ago
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>Pros:</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>No limit on the number of stocks…[Read more] -
Santhosh Chakravarthy replied to the topic Is Stock trading is gambling or Business? How? in the forum Basics of Stock Trading 8 years, 3 months ago
Business – Return > Risk – If we trade understanding the risk and return and ensure to invest / exit at the right time
Gambling – Risk > Return – Without knowing the risk and return participating in a trade
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Santhosh Chakravarthy replied to the topic Why do people choose stock trading? in the forum Basics of Stock Trading 8 years, 3 months ago
To make money with proper knowledge , discipline and commitment
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Santhosh Chakravarthy 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 8 years, 3 months ago
Trading will be executed immediately
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Santhosh Chakravarthy replied to the topic What is the difference between Trading and Analysis? in the forum Basics of Stock Trading 8 years, 3 months ago
Trading is placing an order based on the analysis done on a particular share.
Analysis helps us to understand the level of risk and amount of return to expect for a successful trade.
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Santhosh Chakravarthy replied to the topic Is it possible to buy stocks from BSE and sell it on NSE? How and what is the limitation? in the forum Basics of Stock Trading 8 years, 3 months ago
Yes, possible for positional and not for intraday
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Santhosh Chakravarthy 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 8 years, 3 months ago
Stock trading takes place between the buyer and seller based on their bid and ask price.
Broker- One who helps the retail trader with an account to trade either online, or take acceptance from the trader and place the order, provide recommendations to the trader.
Exchange – Ensures a risk free environment for the traders and assures a commitment…[Read more]
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Santhosh Chakravarthy replied to the topic What is Trade Plan? Why it is essential in the forum Basics of Stock Trading 8 years, 3 months ago
Trade plan is the details of the technical analysis done by us on a company share and provides the following directions
Either to buy or sell  , When to exit or buyback , What is the risk and return expected.
Without a trade plan the trading becomes gambling as we do not estimate the risk.
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Santhosh Chakravarthy replied to the topic How much time required to do trade? in the forum Basics of Stock Trading 8 years, 3 months ago
Time taken to place an order would be few minutes, but when the bid and ask amount matches the trade gets executed in microseconds.
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Santhosh Chakravarthy replied to the topic How Stock exchanges ensure the traders counter party risk? in the forum Basics of Stock Trading 8 years, 3 months ago
Stock exchanges have a direct connect with the brokers and collect caution deposit from them. Incase any settlement issue happens on a particular trade, the exchange house goes to the auction market to buy/sell the shares to safeguard the investors transaction. Penalty is levied to the stock broking company on the loss and additional charges…[Read more]
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Santhosh Chakravarthy replied to the topic Who decide the stock price? in the forum Basics of Stock Trading 8 years, 3 months ago
Buyers and sellers decide the stock price while they execute a successful trade
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Santhosh Chakravarthy replied to the topic What is online trading? in the forum Basics of Stock Trading 8 years, 3 months ago
Online trading is the ecommerce channel through which any traders can buy and sell their shares faster and with ease avoiding paper based transactions
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