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P Vijay replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 7 years ago
It’s an exhaustive study about a company’s constitution, operation, brand equity, profitability, projections, market capitalization etc literally amounting to due diligence,
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P Vijay replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 7 years ago
It’s a dynamic market which cannot be predicted 100% and there is always an element of risk in the trade. However, calculated risks turn it into business when returns outweigh the risks.
Traders need to have sufficient cash for settlement of the trade and can be a limitation
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P Vijay replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 7 years ago
Margin – Deposit with broker towards F&O
MTM – Daily differential price settlement with broker w.r.t. Futures
Premium – Agreed upon amount to be paid to the seller of the contract by the buyer on option settlement date
strike price – Options – Price fixed for the trade of a stock on the said date
Expiry – settlement day for futures & options -…[Read more]
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P Vijay replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 7 years ago
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>Call option – The buyer of the contract with rights to buy at the strike price</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 1…[Read more] -
P Vijay replied to the topic How option contract differ from future contract? in the forum Essentials of Trading Instruments 7 years ago
Option contract has a limited liability – ‘premium’ in case of loss in a trade. One cannot limit the loss in the case of futures.
Futures come with obligation to honor the contract which is not necessarily the case with options
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P Vijay replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 7 years ago
Market place to buy/sell equity shares of Public Listed Companies (in stock exchanges).
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P Vijay replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 7 years ago
It’ll have to settle the differential amount between the buyer & seller of futures on a daily basis based on the EoD share price for the day
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P Vijay replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years ago
Actual purchase/sale of shares with price being decided on the spot (settlement by EoD)
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P Vijay replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years ago
It’s a contractual obligation to buy/sell a share at a certain price (decided currently) for a future date (expiry) – last thursday of the month
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P Vijay replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 7 years ago
Futures & Options where real delivery of shares is not done
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P Vijay replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 7 years ago
It helps the investor to increase his exposure without having to really take delivery of stock, hence not necessitating a full investment for the no. of share (futures) purchased (buy/sell)
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P Vijay 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 ago
Government has constituted a regulatory authority for trading public listed shares in the marketplace – the SEBI. It has also initiated the constitution of depositories NSDL & CDSL (owned by many entities) for holding shares in the Demat form. A stock exchange is SEBI authorised market place to trade in shares. A broker is Client facing and…[Read more]
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P Vijay replied to the topic What is the difference between Trading and Analysis? in the forum Basics of Stock Trading 7 years ago
Trading is the actual act of buying/selling shares whereas analysis is done with data before/after the actual action!
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P Vijay replied to the topic Can I trade NIFTY, SENSEX ? in the forum Basics of Stock Trading 7 years ago
Using futures & options, Yes.
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P Vijay replied to the topic Is Stock trading is gambling or Business? How? in the forum Basics of Stock Trading 7 years ago
Playing it with emotions without a risk / reward computation is gambling. Else a business!
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P Vijay replied to the topic What is positional trading and Intraday trading? in the forum Basics of Stock Trading 7 years ago
Shares bought & sold on different trading days are referred to as Positional trading
Shares bought & sold on the same trading day is Intraday Trading
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P Vijay replied to the topic Who decide the stock price? in the forum Basics of Stock Trading 7 years ago
Buyer + Seller in the market (stock exchange)
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P Vijay replied to the topic How to place order? Types of order? Validity of order? in the forum Basics of Stock Trading 7 years ago
Either manually by interacting with the broker or online
Buy/Sell order – delivery based for indefinite period / Intraday settlement spanning a single trading day
Futures & options lasting till its expiry (last thursday of every month)
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P Vijay replied to the topic Why do people choose stock trading? in the forum Basics of Stock Trading 7 years ago
This higher risk is taken to gain rewards (returns) higher than other financial instruments in the market
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P Vijay replied to the topic What is Trade Plan? Why it is essential in the forum Basics of Stock Trading 7 years ago
To avoid being trapped into a gamble in the stock market, it’s required to have a clear plan/objective defined and share purchase/sale must be effected based on appropriate risk/reward assessment using available data/indicators.
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