Share Market Knowledge

How to Earn from Share Market

2025-05-14T16:48:00.001+05:30

How to earn from StockMarket?

If you want participate in equity markets, You must once establish both account demat and trading account with a registered brokerage firm.The demat account functions as a secure depository for your shares and funds,while the trading account facilitates the execution of transactions in the market.

1. Open of Accounts:

Start your journey by setting up a demat and trading account with a licensed broker. These accounts are essential for the share trading and exchange of financial instruments.

2. What your Financial Objectives:

Firstly decide your investment fund,it shows assess your risk appetite. Determine whether your intent is long-term wealth accumulation or short-term capital appreciation, and evaluate your tolerance capacity for volatility.

3. Investment Strategy:

Make strategy for your financial goals and risk profile.You can invest as short term and long term investment and also trade with future stocks.

4. Choose a Suitable Brokerage:

Choose a brokerage company with your investment requirements.Analysis factors such as commission structure, trading platforms, analytical tools, and the quality of client support services.

5. Analyze Market trends:

Working on fundamental and technical analysis to evaluate potential stock investments.Assess corporate financial statements, prevailing market trends.

6. Execute First Trade:

Once all task done,submit a purchase order via trading platform.Orders can be customized based on type, quantity, and price specifications.

7. Review Portfolio Performance:

Continuous assessment of your portfolio is vital. Track the performance of your holdings and rebalance as necessary to maintain funds with votality market.

Market knowledge is very essential for trading in stock market.You enhance your knowledge through news papers,news channel,financial journals, and online educational resources.

Become Crorepati from Share Market

2020-08-22T13:35:00.000+05:30

We always think how to become millionaire through stock market, Is it true.Yes this may happen.You must have heard that many people have become millionaire by investing in stock market but they all invested their money in stock for 15 to 20 years.In this way ,they made a profit of 100 millions and even higher on the investment of 10000 rs in stock market.Now this question must be coming in your mind that even today one can become millionaire from stock market.So lets understand with some important points.

1.)Always Work in Delivery Trade

If you want to become millionaire from stock market,then we have to invest in good shares for long time for which you will have to increase knowledge about stock,understand company management and analysis past 5 years performance of particular share.After check all these we should buy stock for long term and include stock in portfolio for longer period.

Key Points

a.)Focus on Delivery Trading
b.)Enhance knowledge of Stock or Company Profile
c.)Analysis past five years Performance of Stock

2.)Invest for 15 to 20 years Period

No one become rich quickly, its requires patience and knowledge in that field and if we want to earn money from shares then we have to invest for 10 to 20 years.We will get the benefit of many dividends and bonus shares.In this way our shares quantity or annual profit both will increase and trust me you won't know when your 100 shares convert into 10000 shares.

Key Points

a.)Long term invest
b.)Dividend benefit
c.)Bonus share benefit

3.)Choose A Category Stock

If you are investing in stock market for long period, then choose A Category Stock.The performance of A Category stock is very good, its neither grow very fast nor has decreased very fast.Nifty 50 stock are good.We can invest in Blue Chip Company Stock.A category Stock gives Dividend timely.Its gives you bonus share,Which increase the number of your share in few years.

Key Points

a.)Choose A Category Stock
b.)Its gives Dividend or Bonus on regular basis
c.)A Category Stock Company Management decision always right

4.)Average When Stock Fall

In the long term investment, you will get to see many stock prices,its will also gives you the top rate and down rate but you do not panic, you have to buy shares below and average their value and in this situation don't panic and don't sell shares.

Key Points

a.)Add More Stock in Market Crisis
b.)Average Stock Price on Lower Price
c.)Don't Panic in Market Crisis

5.)Be a Market Expert

We must increase knowledge to understand the share market.We should read news paper daily.We should know about the economics activities of the country on daily basis.We should watch videos related to the share market on YouTube and read articles on Google.If we want to be a good investor,we should know the date of Annual General Meeting and Share Dividends of Company.We should know about big investors like Warren Buffett or Rakesh Jhunjhunwala.

Conclusion

If you follow these 5 things seriously, then you will definitely earn good money from the stock market.People want to get rich quickly which is not possible.Patience and knowledge of very important to earn money from stock market.This five points is the key to success in the share market.

Hope you understand this article, if there is any question related to this article, then you can ask and comment.

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What is Investment Portfolio?

What is Investment Portfolio?

2020-08-06T22:56:00.006+05:30

Investment Portfolio Meaning

Dear Friends, most of people investment in a lot of financial instrument as like Mutual fund, Fixed Deposit,Provident fund, Stock Market etc.Investment portfolio directly related to all these investments.Portfolio is the list of all investment which is show result of loss or profit.Portfolio is a type of collection in which we keep a list of all the investment of our life, which we know on seeing which investment giving benefit and which loss.

Investment Portfolio Importance

Portfolio are very important for all investors through which they can track their investment in one place.Let's know why portfolio is important.

1.Easy Track Performance

Portfolio is a way for easy track performance of our investments,which investment is giving profit or which one a loss.

2.Compare with Previous Performance

We can compare our investment with previous years by creating a portfolio.

3.Risk Control Tool

Portfolio easy way for control a risk,if we see which one investment giving profit or which one giving loss and according to this,we will investment in profit segment.

What is Portfolio Diversification?

Why is need of Portfolio Diversification,Portfolio minimize investment risks,how,Let's understand with example.

Suppose Dinesh Invest 1 Lakh Rs in Stock Market,2 Lakh Rs in Fixes Deposit,1 Lakh Rs in PPF account and 1 Lakh Rs in Mutual Fund.

Stock Market	1 Lakh Rs
Fixed Deposit	2 Lakh Rs
PPF Account	1 Lakh Rs
Mutual Fund	1 Lakh Rs
Total	5 Lack Rs

Portfolio diversification,investor can reduce his risk because not all the money is invested in one investment, he invests in many different places.

If any one investment gives loss to Dinesh but 4 investment giving profit to him.If Dinesh complete amount invest in stock market,if unfortunately market goes down then his money in loss.

Warren Buffet said,Don't put all your egg in one basket.

We must investment in different financial product to reduce loss.

How do make Good Portfolio?

While creating an investment portfolio, we should make a list of all our investments, we can do it on any Notepad or Excel, you can write it with the date.

Portfolios are two types

1.Short Term Investment Portfolio

In short term portfolio ,we keeps small need fulfillment like R.D,Open ended mutual fund,in which we can withdraw money any time.Short term investment like 1 day to 1 month more,we can book profit when portfolio showing some profit.
Example-Suppose I invest in any 100 stock @ rate of 100 Rs. in share market,when this stock increase 2 Rs per stock (2x100) then we can booked 200 Rs profit in this trade.

2.Long Term Investment Portfolio

Long Term Investment Portfolio is made by keeping in mind the needs like Studies,Marriage,Land and buying Houses.
Long term Fixed Deposit,Insurance Traditional Plan,Stock Market long term investment etc are long term investment because all these investment mature in long time.
So we should prepare portfolio according to small or big need,its very beneficial tool for us.

Hope you understand this article,What is Investment Portfolio?If there is any question related to this article, then you can ask and comment.

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Pre Open Market Intraday Strategy.

Pre Open Market Intraday Strategy

2020-07-29T16:22:00.002+05:30

Intraday Strategy

Hello Friends ,Every want make money in day trading but most of people takes loss in intraday trading.In which 10 % people makes profit from some useful techniques in day trading.Its a very easy or helpful techniques.So lets understand-

Login Terminal in Pre Open Session

If we want to know overview of market so login trading terminal in pre open session because most of profitable order place in first hours in market session and pre open market is very help for learn of market overview that it will goes up or goes down.

Login NSE India Site in Pre Open Session

Pre-Open Order Collection CLOSED 28-Jul-2020 09:07:56 IST

11,154.10 22.30 (0.2 %)

Advances - 41
Declines - 6
Unchanged - 3

If you login https://www.nseindia.com/market-data/pre-open-market-cm-and-emerge-market,We will see 50 share change percentage and some change in nifty index.In this screen shot we seeing in pre open session market change 0.2 % and 41 stocks going up side which is green color or decline 6 stock and 3 stock in unchanged position.Then what will do in Pre Open Market Intraday Strategy.

1.)If Market Nifty Index in green position in pre open market

If Market index showing its on positive position and showing green signal then open chart in NSE India nifty 50 chart,which is share on positive position and select top 5 shares.Add to these top 5 share in your market watch.Then wait for 9.15 am for market open then on sharp 9.15 am check again.

Which 5 shares were selected, are they all yet increasing as before?

If yes,then pick top 3 stock and place order to buy and booked 0.5 % profit or comes out of position.It will be happen in 1 to 5 mint.
if you are makes more profit then takes stop loss,its very important tools for stock market.

2.)If Market Nifty Index in red position in pre open market

If Market index showing its on negative position and showing red signal then open chart in NSE India nifty 50 chart,which is share on negative position and select top 5 shares.Add to these top 5 share in your market watch.Then wait for 9.15 am for market open then on sharp 9.15 am check again.

Which 5 shares were selected, are they all yet decreasing as before?

If yes,then pick top 3 stock and place order to sell and booked 0.5 % profit or comes out of position.It will be happen in 1 to 5 mint.
if you are makes more profit then takes stop loss,its very important tools for stock market.

Select High Volatility Shares

When we trades in day trading,must be choose high volatility shares because this types share high movement in ups and down so we have most chance make profit in these stock and we should learn company profile for trade,its technique mostly give profit.

Select Blue Chip Company for Trading

Always choose shares which is fundamentally strong and giving regular basis performance like that blue chip share,most of share in blue chip company regular ups and down.Its moves in desire interval,we can watch and makes strategies for that before a day.

Day Trading is not for 9.15 am to 3.15 pm

Day Trading is not for whole trading day,its for minimum time place a order and booked profit or loss in deciding time,don't for whole day that share will give profit,you can booked little profit and comes out from trade,if you wait ,you will see you loss will increase so please if want 1 rs / share profit so your stop loss should be 1 rs / share.

Hope you understand this article,Pre Open Market Intraday Strategy,if there is any question related to this article, then you can ask and comment.

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7 Key Difference between Common Stock and Preferred Stock.

7 Key Difference between Common Stock and Preferred Stock

2020-07-18T17:58:00.002+05:30

What is the Common Stock?

Common Stock are stocks which is issues to general public by trading platform.In other way,we can say who person bought shares from NSE or BSE in current market at current price through trading account its known as Common Stock or Equity Shares.Mostly individual or retailer trader keeps common stock or equity shares in demat account.Common stock can sell at any time for making profit.Traders can buy any quantity of Common Stocks.

Common Stockholders Rights and Importance

1.Right for vote

Common Stockholders have rights for choose or voting for /Board Of Directors of Company.

2.Right to ownership of company

Common Stockholders have right for ownership of company that means all shareholder as owner according share quantity ratio.

3.Right to received Dividends

Common Stockholders keep right for received dividends.This dividend varies according to company performance.

4.Right to Sell Common Stock at any time

Common Stockholders can sell share at any time for making profit.

5.Common Stock or Equity share Risk and Return

Common Stocks or Equity share comes into high risk and high returns category according stock market ups and downs.

6.Common Stockholders is part of management

Common Stockholders is part of company management,they can vote for choose board of directors.

7.Company can buyback of Common Stocks

Company can buyback of common stocks or equity share at any time for minimize outstanding shares in a market.

8.No Fixed Return

Company never gives fixed return on common stock or equity shares to share holder,its depend on market ups and downs.

9.Company not gives compensation

Company is not bounded for gives compensation in terms of company wind up,in this case company not gives any price to common shareholders.

What is the Preferred Stock

Preferred Stock buy by financial institution,Private firm and rich family.Preferred stock different from Common Stocks.Preferred stock has preference right over common stock with respect to dividend of share or liquidation procedures.
Preferred Stock gives fixed dividend to financial institutions or private firm etc.

Preferred Stockholder Rights and Importance

1.No Ownership Right

Preferred Stockholders have not rights of ownership of company in terms of vote to choose board of directors.

2.Fixed Dividends

Company gives fixed dividend to Preferred stockholders,company has committed for this,if the company any time not gives dividend ,its can gives two or three dividends together to preferred stockholders.

3.In Case of Company default

If the company default in future,company compensate to preferred stockholder firstly.

4.Preferred Stock can't sell

Preferred stock can't sell in cash market by parties.

5.No Risk and Fixed Return

Preferred stockholders have no risk and they takes fixed returns on investment.

7 Key Difference between Common Stock and Preferred Stock

1.Common Stocks bought by individual or retailer investors and Preferred Stocks bought by financial Institution or Private firms.

2.Common Stocks is traded in cash market and Preferred Stock is not traded.

3.Common Stockholders takes dividend when company in profit zone but Preferred stockholder regular dividend in any case,company gives dividend if company in also loss.

4.Common Stock can sell at any time in cash market but Preferred Stock can't be sell in cash market.

5.Common Stock is comes into high risk and high return because when company share price on above of buying price its gives profit but when company share price on below of buying price then investor in losses but Preferred stock holder never takes losses,they always on fixed dividend on regular basis.

6.Preferred Stockholder have exit option in this category through buyback of company or preferred stock convert into equity share and Common Stockholders exit from sell shares in cash market.

7.Preferred Stock is not effected of regular ups and down of markets and no impact of any company result or bad news or politics news on preferred stocks but Common stock effected by daily market graph or ups and downs or market index.

This is main deference or definition of Common Stock and Preferred Stock but both of stocks raise fund for company.In short common stock buy by any persons and preferred stock bought by big firm for fixed return.

Hope you understand this article,7 Key Difference between Common Stock and Preferred Stock,if there is any question related to this article, then you can ask and comment.

Also read

What is Hedging?

What is Hedging?

2020-07-11T20:43:00.005+05:30

Hedging Strategies in Option Trading

What is Hedging Strategies, How to use Hedging Strategies.Hedging is like a fence or boundary which is protect your garden from cow or goat etc.Hedging Strategies is boundary wall,it can save from loss, Hedging in stock market its help for minimize a lose percentage in right way use.Hedging a tools in stock market which is minimize or less customer risk.Hedging strategies used by mostly trader when they stuck in wrong trade.Hedging strategies is useful technique for save money in risk zone.

Hedging Strategies with Example

If any trader buy a share in cash market and he think its will go up.Suppose that trader buy 500 quantity at rate of 1000 rs of XYZ Company share but share goes down,its a risk for trader in this zone Hedging Strategies is very help full.Always Hedging Strategies use when share goes down, its never use on equal rate because in that case is always show no loss no profit.Trader buy a share in Cash market,he will hedge to this with option or future trade.

Hedging Strategies with Option Trading

Trade has bought a share but its goes down then how will use hedging strategies.

CASE MARKET
SHARE BOUGHT	YES
PRICE	1000
LOSS/PROFIT	LOSS
USE HEDGING

Rules.1-

If share buy in cash market then same share PUT will be buy in option trading.what is option trading?this is already share on previous post.

Rule.2-

Hedging Strategies don't use on same price or strike price,if share price is 1000 rs then you should use 950 strike price put in option,price gaping is must for minimize loss.

Rule.3-

If your share price goes up of purchase price then hedging should finished that time.

Rule.4-

Don't make position for long time,its should closely watch and book a profit if you see suitable amount and book profit or makes position again on same rate.its right way for use a hedging strategies.

Hedging Strategies with Future Trading

In term of hedging strategies with future trading,some rules as follow-

Rule.-

Quantity is most important,if you are buy a 1000 a share,you should must buy 1000 share in future trading in lots form.Hedging strategies always use for minimize risk or gain profit on one side.
In my opinion hedging strategies is very helpful term for trader but this is always use in gaps in prices of cash market or option or future trading.

Hope you understand this article,What is Hedging.If there is any question related to this article, then you can ask and comment.

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What is Risk and Uncertainty?

2020-07-06T23:13:00.003+05:30

Difference between Risk and Uncertainty in Stock Market

What is Risk and Uncertainty in Stock Market.All investment included risk whether in stock market, banking instruments and all financial sector, real estate, gold etc.Risk and Uncertainty included with all financial product.Stock Market is not predictable,its totally uncertainty sector.Risk in stock market shows in particular stock or company cause of some internal reasons of company and stock goes up and down in speedily or in one directly fluctuations.Uncertainty in stock market shows market risk on whole stock market cause of politics reasons, bank policy, climate disaster or war etc.

Risk V/S Uncertainty in Finance

Risk vs Uncertainty in finance sector is very important component,if any person investing in stock market.He takes risk and if suddenly market crash due to external issues.Its is Uncertainty.In Risk segment minimize is own risks but in market uncertainty issues customer cannot minimize own risk because of all index down due to external issues.

Risk Definition

According to Fischer and Jordan risk is the,The variability of return around the expected average is thus a quantitative inscription of risk.

Market Uncertainty

Market Uncertainty cover all Market Index and all shares fluctuation are too high.In market uncertainty the price of all stock moving in same direction.Market Uncertainty is a market risk due to same specific reason as like politics, bank policy or war between country.All these reason is important for market but any one gets less than invested amount because of company result or company internal issues,its situation comes under risk.Risk is controllable.

If any one invested in stock market and further started war with neighbour country.In this period all market goes down in scary environment,investor sold complete portfolio due uncertainty because market when will grow,nobody know its.Uncertainty is uncontrollable element.

Difference between Risk and Uncertainty

1.)Risk is Controllable.

2.)Customer can diversify portfolio because diversification can minimize risk in this situation.

3.)Uncertainty is uncontrollable.

4.)In market uncertainty customer cant diversify portfolio because all market will be in same direction that means all shares of company will be down in this situation.

5.)Main difference between risk and uncertainty, risk is associated with internal issues of company as like sale result,production or management issues etc but uncertainty included with market risk or external reason as like bank policy, government policies or war with neighbour country etc.

Stock Market Uncertainty

Stock Market Uncertainty is nature of stock market.Nobody predict market.In market uncertainty market moves in same direction.In market uncertainty investor see high ups and downs.

Example of Risk and Uncertainty with explanation

If Mohan invested 1 lakh rupees in stock market in different stocks,suppose that he bought 10 stock of different companies.He is diversify portfolio with different companies.In this situation all risk is controllable because he has 10 companies share his risk will be very minimum,If one company share down with any reasons but all 9 companies will be in safe situation that means risk is controllable with diversification but politics issues, other country issues or natural disaster created market uncertainty.In market uncertainty mohan cant do anything.

What is difference between risk and uncertainty, all you have understand with this example.You have taking a decision in market uncertainty that time keep patience and when you are in risk segment if you can safe with diversification strategy and when you are in market uncertainty you should keep patience till sort out this situation of external issues after that stock will be in good situation.

In my opinion risk or uncertainty in stock market is depend on systematic risk or unsystematic risk.Systematic risk included with market risk or external reason and Unsystematic risk included with stock specific risk or internal issues of companies.

Hope you understand this article,What is Risk and Uncertainty in Stock Market,if there is any question related to this article, then you can ask and comment.

Real also

Future and Options stock list

Future and Options Stock List

2020-06-21T19:54:00.003+05:30

Future and Options Stock Complete List

Providing List of Companies List in Future and Options

ACC Ltd.

Adani Ports and Special Economic Zone Ltd.

Amarrajabattery

Ambuja Cements Ltd.

Apollohospital

Apollotyre

Ashok Leyland Ltd.

Asian Paints Ltd.

Aurobindo Pharma Ltd.

Axis Bank Ltd.

Bajaj Auto Ltd.

Bajaj Finance Ltd.

Bajaj Finserv Ltd.

Balkrishna Industries Ltd.

Bandhan Bank Ltd

Bank of Baroda

Bank Nifty (index)

Bata India

BEL

Berger Paints India Ltd.

Bharat forge

Bharti Airtel Ltd.

Biocon Ltd.

Bosch Ltd.

Bharat Petroleum Corporation Ltd.

Britannia Industries Ltd.

Cadila Healthcare Ltd.

Canara Bank

Century textile

Cholafin

Cipla Ltd.

Coal India Ltd.

Colpal

Container Corporation Of India Ltd.

Cumminsind

Dabur India Ltd.

Divis Laboratories Ltd.

DLF

Dr. Reddys Laboratories Ltd.

Eicher Motors Ltd.

Equitas

Exide industries

Federal Bank

GAIL (India) Ltd.

Glenmark

Gmrinfra

Godrejcp

Godrejprop

Grasim

Havells India Ltd.

HCL Technologies Ltd.

HDFC Bank Ltd.

HDFC Life Insurance Co Ltd.

Hero MotoCorp Ltd.

Hindalco Industries Ltd.

Hindustan Petroleum Corporation Ltd.

Hindustan Unilever Ltd.

Indiabulls Housing Finance Ltd.

ICICI Bank Ltd.

ICICI Prudential

IDFC First Bank

IGL

Indigo

Indusind Bank Ltd.

Infratel

Infosys Ltd.

Indian Oil Corporation Ltd.

ITC Ltd.

JSW Steel Ltd.

Jublfood

Justdial

Kotak Mahindra Bank Ltd.

L&T Finance Holdings Ltd.

Lichsgfin

Larsen & Toubro Ltd.

Lupin Ltd.

Mahindra & Mahindra Ltd.

M&M Fin

Manappuram

Marico Ltd.

Maruti Suzuki India Ltd.

Mcdowell

MESL

MGL

Mindtree

Motherson Sumi Systems Ltd.

MRF

Muthootfin

Naukri

NCC

Nestle India Ltd.

Nifty(index)

NMDC Ltd.

NTPC Ltd.

OMGC Ltd.

Page Industries Ltd.

Piramal Enterprises Ltd.

Petronet LNG Ltd.

Power Finance Corporation Ltd.

Pidilite Industries Ltd.

Power Grid Corporation Of India Ltd.

PVR

Ramcocement

RBL bank

Rec Ltd.

Reliance Industries Ltd.

SBI Life Insurance Company Ltd.

SBIN

Shree Cement Ltd.

Siemens

SRF

Shriram Transport Finance Company Ltd.

Sun Pharmaceutical Industries Ltd.

Sun Tv

TataChemical

Tataconsum

Tata Motors Ltd.

Tata Power

Tata Steel Ltd.

Tata Consultancy Services Ltd.

Tech Mahindra Ltd.

Titan Company Ltd

Torentpharma

Torentpower

Tvsmotor

United Breweries Ltd.

Ujjivan

Ultratech Cement Ltd.

UPL

Vedl

Voltas

Wipro Ltd.

Zee Entertainment Enterprises Ltd.

Hope you understand this article,Future and Options Stock List,if there is any question related to this article, then you can ask and comment.

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What is Buyback of Shares?

What is Buyback of shares?

2020-06-20T16:39:00.005+05:30

BuyBack Difination

When a company buys shares from company shareholder,this process is called Buy back of Shares.The company always buys the stock at a much higher price from company investor.This process is done by the company's management.

Reasons for buyback of shares

When does the company take decision of Buy back of Shares

When the company accumulates a lot of profit cash and does not invest that profit in the company expansion or invest in new machinery or anything, it shares its profit through its buy back of share and dividend from its shareholder.The company has bought shares from shareholders at higher price.

Who can apply for Share buy back

Anyone can apply to the share buyback,who owns the shares of that company,just before the record date, that shareholder should have shares.The record date is the one on which the company announces the buyback of shares.

How to Buyback of Shares

Buyback of Shares apply through tender.You can apply this in three ways.

1.)From your broker

2.)From Company website

3.)Company buy back email,the company sends an email to all its share holders, which contains a tender form, which you can fill and apply for it.

After the Buyback, the company transfers their money to the shareholder in their bank account. If your share is not Buyback then they reverse to the Demat account.

Condition for Buyback of Shares

Any shareholder can apply for a buyback from a demat account, means if he has 4 demat accounts, all of them have shares of that company, then he will be able to apply for buyback from any one account.

Why does the company buy back

When the company sees that the rate of shares in the market is falling too much and the market shareholder has a lot of shares of the company, company buy back of shares so that all the outstanding shares in the market come back in company and in the market, the shares quantity of that company decrease and the demand for those shares increases due to which their rates start increasing.This benefits to the investor.

According to me, if the company's share price increases, then the investor should not participate in the buy back as it will not benefit much but at the time when the shares of the company have fallen and the company brings the Buy back, then you must apply this is profitable deal.

Hope you understand this article,What is Buyback of shares?if there is any question related to this article, then you can ask and comment.

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What is Face Value of Shares?

What is Face Value of Share?

2020-06-17T22:13:00.004+05:30

Face Value of Share

Friends, I wrote an article on this topic because many people do not know,What is Face Value of Share ? Face Value is par value of share.You have to see in share certificate face Value words.Its very important for the stock market.If any person start a company and invest money after some time, if he want expand his company business, he raise capital from primary market by IPO.At that time, he divides his investment into shares. He announces the price of the stock, which is called share premium.It is at this share price that investors buy shares of that company from the primary market.Any company keeps its share face value at Rs 10 because face value 10 rs makes it easy to evaluate dividend and split shares.Its help to company for calculation when company gives dividend and split shares.

Importance of face Value of Shares

Face value of shares important in terms of Dividend and Split shares because Face value is helps of calculation Dividend and Split shares.

Face Value of Shares and Dividend

If any company xyz company share price is 500 rs and face value is 10 rs.Its declared dividend 150 % its not mean company gives 150 % of share price its will give dividend on face value,its means 150 % of 10 rs is 15 rs dividend gives to shareholders.

Face Value of shares and Split Share

If any company xyz company share price is 500 rs and face value is 10 rs.Company want split shares in 1:5 ratio then company share price will be 100 rs and face value will be 2 rs.

Conclusion

So Face Value of shares is very important part in stock market for dividend and split shares.When the company is listed on the stock exchange, its face value is only 10 rupees. This 10 rupee mark is very thoughtful, it helps a lot in all valuations.

Hope you understand this article,What is Face Value of Share?,if there is any question related to this article, then you can ask and comment.

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What is Short Selling in Stock Market?

What is Short Selling in Share Market?

2020-06-11T11:21:00.017+05:30

What is Short Selling?

Stock Market is uncertain.Its dependent on current market scenario as like news, stock result, bank rate etc.All these factors affect the stock market.Its not true traders always makes money from purchased share and booked profit on sell of shares on high prices but most of time stock market goes down because of nifty expiry, stock result or credit policy than some trader or speculator sell stock on high prices and booked on lowest prices in intraday trading.Its trading technique known as Short Selling.

Lets understand with example of Short Selling

A traders feels that a company xyz stock will fall because of any reason, he immediately sells it at the current price and he buys it as soon as the stock comes down.

Suppose

Sell price of share XYZ=100 rs

Buy price of share XYZ=90 rs

Profit=Sell price of share-Buy price of share

=100-90

=10 rs

Identification of Short Selling in Share Market

a.)Bank Credit Policy

If the bank increase a interest rate , cash reserve ratio and repo rate.Its affect on intraday market and market goes down.Traders and Speculator can short selling and makes profit.

b.)Stocks Result

If the stocks result are not good,NPA is increased and company profit below expectation then mostly traders sell share because they knows cause to bad news company share will be down so that time Traders and Speculator can short selling.

c.)Nifty Expiry

When Nifty at expiry and future option are roll over into next month contract that time market goes down,traders and speculators can short selling.

d.)Politics Environment

If the election result is not in market favor of according to market expectations that time market goes down, trader can short selling.

e.)Corporate Action

If the company change in top management staff because of companies performance that time company shares goes down,trader can short selling.

f.)Company sell big proportion of shares

If the company sell big proportion of shares to other company for increasing liquidity and expand business that time company shares prices goes down.its best time for short selling.
So conclusion is this,all these factor effective for short selling.At that movement speculator or traders makes profit with intelligence in short time.

Hope you understand this article,What is Short Selling? If there is any question related to this article, then you can ask and comment.

Also read

What is Dividend?Popular Dividends in Indian Stock Market.

What is Dividend?

2020-06-09T13:42:00.008+05:30

Dividends Definition

Dividend is generally the profit of company distributed their shares holder in proportion to their shares.Company share profit to share holder if company in profits.
If any company declare dividends, its paid to the shareholder as per the provisions of India Companies Act.Dividend declaration decision takes by The Board of Directors of Companies.Mostly company gives dividend on annually if company makes profits.Whichever company gives regular dividend to its shareholders, that shareholders invest in that company for a long time.To keep the company stable in the market, it gives regular dividend to its shareholders, which is making liquidity in their company and they can make their company bigger.

Some Important features of a Dividend Paying Company

a.)Stability in Share Prices

b.)Confidence Among Shareholders

c.)Good Growth Prospects

d.)Helpful in long term planing of company.

Many investors who invest long-term in the company, they get the benefit of dividend and bonus shares.Some shareholder gets an annual dividend of millions of rupees because they invest in a good credit company, these company's shares are not go and up more one side, this company gets stable in the market and it maintains its investor wealth.

Popular dividends in Indian Stock Market

a.)Cash Dividend

This is most popular dividend in stock market.Most of companies gives cash dividend to their shareholder according to their hold shares.Regular dividend paid annually,company declare dividend in Annual General Meeting with The Board of Directors of Companies.

b.)Stock Dividend

The Stock Dividend is the form of dividend its known as Bonus Share.Where company have surplus share reserve but does not have more liquidity then company gives bonus share instead of cash dividend.

c.)Bond Dividend

When company have not liquidity and its not running in profit then company can gives to shareholder to dividend in the form of bonds after 5 to 7 years.Its also good form of dividend.

I think we should buy stocks of good companies like Reliance Industries,TCS etc. for a long time, so that we continue to get the benefits of cash dividend and bonus shares and our portfolio will also be increase.

Hope you understand this article,What is a Dividend?,if there is any question related to this article, then you can ask and comment.

Also read

What is Stock Exchange and its function?

What is Stock Exchange?

2020-06-06T13:27:00.015+05:30

Stock Exchange Introduction

Stock Exchange is mechanism who have assisting,regulating or controlling the business of buying and selling in securities.Stock Exchange gives right to company for trading in secondary market.Stock Exchange allows trading under some certain rules and regulations.

Two Nation level Stock Exchange in India-

a.)National Stock Exchange

b.)Bombay Stock Exchange

Functions of Stock Exchange

Features of Stock Exchange

a.)Company when listed in Secondary Market that means securities are purchased or sold.

b)Company can not approach directly to investor for investing,Investor invest in company by National Stock Exchange or Bombay Stock Exchange.

c.)Stock Exchange is strictly regulated to companies and rules regulation prescribed for various transaction.

d.) Promoters,Investor and Speculator purchased and sell companies shares from Stock Exchange.

Characteristics of Stock Exchange

a.)Stock Exchange keep records of capital,revenues formation of all listed companies in NSE and BSE.

b.)Stock Exchange watch all active trading of investors,speculators and promoters.

c.)Stock Exchange increase liquidity of assets in financial market.

d.)Stock Exchange provide growth to company by investor and profit to investors by dividends and profits.

Importance of Stock Exchange

a.)Increase Liquidity in Financial Market

The Stock Exchange provide a platform where shares and stocks are converted into cash.Where buyer and seller are invest and generated profit.

b.)Increasing Company Growth

When any company want growth and increase revenue,they want listed in stock exchange for span his business by investors investments.

c.)Increasing Company Faith on Investors

Nobody invest his money in any company without any believed but stock exchange is gives believing power to investor because those company listed in NSE and BSE is directing and controlling by Securities Exchange Board of India.

d.)Evaluation of Listed Securities

The Stock Exchange Evaluate all Securities who have listed in stock exchange.The Stock Exchange evaluate company profits ,revenue ,promoter trading block deal etc.

e.)The Stock Exchange provide secure dealing in shares

The Stock Exchange watch trading of all companies and provide secure dealing in shares trading to investors.

How to increase prices of company shares in Stock Exchange?

In Stock Exchange Company Share prices depend on some factors

a.)Financial Graph of the company

b.)Company business and diversification

c.)Company Market Value

d.)Company Product Demand and Supply

e.)Promoters and Speculation Activities

Hope you understand this article,What is Stock Exchange?,if there is any question related to this article, then you can ask and comment.

Also read

What is Option Trading?

What is Intraday Trading in Stock Market

2020-05-31T22:33:00.017+05:30

Intraday Trading

Friends, you must have seen advertisements in many places, make money from intraday trading, you will also get the marketing sms of stock brokers that do intraday trading and make money, it is not as easy to listen to the stock market with intraday trading. To make money from it, it requires study, it is important to have a good knowledge of the share market. If it was so easy to earn money from the stock market then everyone would have become richest. We first know what is intraday and how to make money from it.

What is Intraday Trading?

The stock market is a place where the companies register in the stock market to buy and sell shares, it is time to open the stock market, at the same time we can buy and sell shares, the time of Indian stock market from Monday to Friday. Its timing 9:15 am to 3:30 pm,there are two types of buying and selling of shares in the stock market.

1. Intraday Trading

2. Normal Trading

Intraday Definition

Shares purchased in intraday trading have to be bought and sold on the same day, meaning that you bought a stock at intraday prices of an XYZ company in the morning and sold it before being market closed the same day, then it is called Intraday Trading. There is a lot of risk in intraday trading. Many people have lost money in the matter of making more profit in it. In Intra day Trading, profit can be earned if you understand it correctly. So let us know how to earn Profit from Intraday Trading, for this, some rules have to be followed.

Intraday Trading Strategies

1.)Choosing the Right Stock Broker

In the stock market, you cannot buy and sell direct shares, for that you have to open a demat account. This demat account is like your bank account. Money is saved in the bank account and same as shares in the demat account. You have to open this demat account with the Registered Stock Broker in SEBI, it is important to keep some things in mind while opening the account like.

2.)Brokerage Calculation

(a) How much brokerage or commission charge for every intraday day,some brokers take brokerage in percentage,the percentage of brokerage that will be over that amount and one who takes flat brokers like every The decided amount is fixed on a lot, choose the one which you find cheaper.

(b) Some brokers give credit limit for intraday trading, as if I put 10000 rupees in my demat account, my broker is giving 5 times credit on it, accordingly I can trade up to 50000 rupees with credit limit. I will trade with whoever gives more credit limit.

3.)Choosing the right stock

All company shares in the stock market are not suitable for intraday trading, some stocks are such that they can be used only for normal trading. You have to understand which stock is right for intraday trading. Make a watch list of your own and study it.

4.)Market Fluctuation

Always keep your eyes on the chosen share because the fluctuation of the changing market keeps changing the share price as well, do not take advantage of this changing market.

5.)Virtual trading practice

If you are new in stock market trading and you want to know how you have become market expert without maximum loss, then you should start with virtual trading in starting. Virtual trading is a platform that makes you available demo trading without losing money, the market has many free virtual trading options available.

6.)Avoid greed

In the stock market Intraday trading, greed can overwhelm you, so it is important to keep control over greed, take some decisions not with heart. Every stock has a limit of up-down and if you expect more money in the grip of greed then you will be lulled. So do not greed in stock market.

Conclusion

What is Intraday trading?How to earn money from intraday trading: This article talks about intraday trading, if you place order correctly in intraday trading then you will definitely get success and take the advice of your finance adviser.

Hope you understand this article What is Intraday Trading,if there is any question related to this article, then you can ask and comment.

Also read

What is Circuit Breaker in Stock Market?

How do Invest in Penny Stocks for Beginners

2020-05-30T21:55:00.017+05:30

Invest in Penny Stocks

There is nothing more thrilling than playing the stock market. If you dream of accomplishing this, but are scared to take the first step don't worry. Here's a stock market trading tutorial that ought to whet your appetite. Each stock market trading tutorial should start with the terminology of the trade.

Penny Stocks Investment

You should only invest in penny stocks with risk money or those funds that you can afford to lose.

You know exactly what the stock symbol is, it is the letters that represent the company. The first type is the exchange trade, you purchase or sell the stocks.

The second is a limitation trade and possibly the most essential types from the stock market trading tutorial. Here you set the price to you will sell or buy the shares.

Penny Stocks Example with explanation

You always use a limit order you trade penny stocks. Remember that if you recall nothing else from this share market education. If you wish to buy shares for 0.001 per share and have one thousand Rupees to do that, in addition to the cost of the trade, and purchase 1, 000,000 shares, but use the marketplace price you find out very quickly you don't necessarily get what you think you will get. Market manufacturers, the men that control the stocks of particular businesses, can decide that they really want 0.01 a share and you owe 10,000 rs. When there's no foul play, the marketplace goes and a 10th of a penny could make the difference between a loss and a gain.

Lesson one of that the stock trading tutorial is use that the limitation order and pick in advance how much you would like to pay along with what price you want from that the stock.

Lesson two of the stock marketplace tutorial goes with the limit order. If you find one so does, pick also a number close to its lowest price and put in a limitation order.once it hits that price, you automatically purchased it. In case that the price is lower, you got it for that the lower price.

As soon as you find you purchased the stock, put in a sell limitation purchase to the upper end of the cycle, and go watch TV or eat lunch. The transaction takes place when it hits so price. Do you always make just as much as you can? definitely not, but you did not have expend all the effort either. This stock marketplace trading tutorial gives some talk trading education that does not require a lot of effort.

Lesson 3 of the stock marketplace trading tutorial involves knowing how much you would like to make on the trade.

Hope you understand this article How do Invest in Penny Stocks for Beginners,if there is any question related to this article, then you can ask and comment.

What is Time Value of Money?

How to be Successful in Stock Market Trading

2020-05-28T17:12:00.012+05:30

5 Mantra for Stock Market Success

1.) Do not invest in the Stock Market without Knowledge

If you are thinking of investing in the stock market,then first read and learn about the stock market before investing.Research how the business of the company whose shares you want to buy,How is the performance.Whether the management of the company is good or not.It is also important to know about its history of the company.How has it fluctuated from time to time?Then should buy the stock.

2.)Do not invest in the Stock Market by taking Loans

It will be the biggest mistake in your life to invest in the stock market by taking a loan.That is why do not invest in the stock market by taking loans.If you have additional money for investment in the stock market which you do not have to use, invest the same money in the stock market.

3.) Do not Greed in the Stock Market

Friends,If you are thinking to invest in the stock market,then you should never show greed.Shareholders do not booked profit,if the stock rising,they think if add a little money in profit,I will withdraw then increases a little, then thinks if increase a little more, I will withdraw money If at that time bad news comes in the share market then the stock market falls.Then you start losing so do not Greed in the stock market.That is why the share market continues to booked a little profit .Don't run for too much profit.

4.)Diversify your Portfolio in Share Market

If you are coming to the stock market,then you should keep a long-term target by investing money in a good company because in the long-term,there is more chance of profit in the stock market.You should diversify your portfolio.You should buy shares from different sectors.If one sector is losing, then another sector giving profit.Portfolio Diversification Minimize the Risk.

5.)Do not panic or emotional

If you are working in the stock market then you can gain and also loss so do not take any decision in haste.Take decision only after understanding share news and share movement.Investors should invest only in companies with good fundamentals.The best option for newcomers to invest long term. Investors must fix a target price to buy as well as sell.
This would be my advice to investors investing in the share market.A stock market is not a magic wand that will make you instantly rich.If you keep a view of investing from 2 to 5 years,then money can be earned.

Hope you understand this article How to be Successful in Stock Market Trading,if there is any question related to this article, then you can ask and comment.

Also read

How to invest in Stock Market?

What is Circuit Breaker in Stock Market?

Time Value of Money

2020-05-26T18:20:00.005+05:30

Time Value of Money Concept

Money has time value.The Time Value of Money means the value of money received today is more valuable than same amount received in future.

Lets understand its by example

Suppose I want to buy a house which is worth 5 lakh rupees but I do not have five lakh rupees yet, I buy the same house after 2 years but the price of that house increases with time means 5 lakh is not enough to buy that after two years.because the value of money varies over time means the value of money received today is more valuable than same amount received in future.
The preference for money now as compared to future money is known as time preference for money.The reasons for time preference of money can be stated as follows-

a.)Risk

b.)Uncertainty

c.)Present Consumption

d.)Investment Goal

Our Grandfather or Grand Mother tells us that in the past, everything was very cheap. Earlier, 50 paisa used to get sweets, vegetable and bus tickets but now there is no value of 50 paisa. Its a Time Value of Money.

Techniques of Time Value of Money

a.)Compounding Techniques

b.)Present Value Techniques

Compounding Techniques is finding out the Future value (FV) of present money

In compounding techniques, if you made a fixed deposit of 10 lakh in the bank today, what will be its value after 10 years, how much money will you get from Compound Techniques, we calculate the value found in the future.

Present Value Techniques is finding out the present value (PV) of the future money

In present value techniques, if you have made a fixed deposit of 5 lakh for 10 years but you need the money before 5 years, then the bank will give you that amount with interest that is being made on that date.Present Value Techniques helps find present value of the amount what we get in the future.

Through this article, you must have understood how the value of money keeps decreasing due to inflation, uncertainty, risk.Whenever we invest somewhere, keep in mind that what we will get in the future.

Hope you understand this article Time Value of Money , if there is any question related to this article, then you can ask and comment.

Also read

How the stock market works in India

What is Rights issue?

2020-05-25T20:53:00.006+05:30

Rights Issue in Stock Market

When the company gives shares to its shareholders at a discount to raise capital, this process is called the Rights issue of that company.Its under Section 81 of the company Act 1956.Rights issue are always for the shareholders who have that company share in their demat account, only those shareholders can apply for the Rights issue.

The rights issue the company always gives to its shareholders at a rate lower than the market rate.

Let's understand it by example

Example

Reliance Industries Rights Issue 2020

Issue Opening Date 20 May 2020
Issue Closing Date 3 June 2020

Reliance Rights Issue offer at 14 % discount from market price.

In this right issue, the share holders cannot apply the shares as per their choice.For the rights issue, the company determines a ratio according to which the share holder apply for rights issue.

Example

Reliance Industries rights issue is 15:1. Reliance Industries is giving right issue of 1 share on 15 shares to its shareholders, means shareholders who own 15 shares of Reliance Industries will get right issue of one share.

Advantage of Rights Issue

a.)Its is an method of raising capital.

b.)Company offers right issue at a price which is lower than the market price of the shares.

c.)Its beneficial for existing shareholder of company.

Shareholder are free for decision

If you are already a shareholder, it is not necessary to buy shares in the Rights issue.You can use your rights.if they believe that they will give more benefit in future. It is not necessary to apply for the right issue if they feel that they can get the shares on same rate from the immediate market in the coming days, they can take it from current market.
On applying for a right issue, the share holder gives fund to the company, that's why if you think,the company is good and you will get benefit by investing in the rate that the share company is giving you, then you can apply for the rights issue But if you think that the market is going to fall in the future and you can get that share below that rate, then do not apply for the right issue.

Hope you understand this article What is Right Issues, if there is any question related to this article, then you can ask and comment.

Also read

What is Circuit Breaker in Stock Market

Top 100 Blue Chip Companies

What is Circuit Breaker in Stock Market?

2020-05-24T13:45:00.006+05:30

Circuit Breaker in Stock Market

When there is a lot of ups and downs in the stock market, then the stock starts falling down or up or down very fast, it is from 2% to 20%, this is called the circuit breaker, the system used to protect the investors. This circuit breaker is applied both on the index and on the stock as and when required. Trading is stopped at that time. The future and option does not under the circuit breaker..Each stock has a price band. Every Stock moves within that price band. If that stock reaches the upper price or lower price of its price band, then trading in that stock is stopped,the stock comes in a circuit breaker. there are two types of circuit breaker.

a.)Upper Circuit
b.)Lower Circuit

What is Upper Circuit?

Let us know how the upper circuit is in stock.Suppose the upper price limit of a stock is 300 rs, then when the stock reaches its upper price 300 rs then trading in that stock will stop.Then the stock will take an upper circuit.There are only buyers in the upper circuit.The upper circuit value varies daily.

What is Lower Circuit?

Let's know how the Lower circuit in the stock market.Suppose the lower price limit of a stock is 210 rs, then when the stock reaches its lower price 210 rs then trading in that stock will stop.Then the stock will take an lower circuit.There are only sellers in the lower circuit.The lower circuit value varies daily.

The circuit break limit of the stock determines the stock exchange, it can range from 2% to 20%.

What is Index Circuit Breaker?

Let's know what is an index circuit breaker? We understand this by example

NIFTY 50 Closing As on 22-May-2020

9,039.25

Nifty 50 closed at 9039.25 on 22 May 2020.

a.)If this index falls by 10% means the 903.90 point market will fall, then the first circuit in this market will take place.

b.)If this index falls by 15% means the 1355.90 point market will fall, then the second circuit in this market will take place.

c.)If this index falls by 20% means the 1807.85 point market will fall, then the third circuit in this market will take place.

The circuit breaker limit of the index determines SEBI.

Hope you understand this article, if there is any question related to this article, then you can ask and comment.

Also read

Top 100 Blue Chip Companies

Options Trading in 8000rs

What is Rights issue

What is Speculator

Top 100 Blue Chip Company

2020-05-22T22:05:00.005+05:30

What is Blue Chip Share?

Do you want to know,what is blue chip share and why most people invest in blue chip company in share market,The best companies listed on the stock market are called blue chip companies. It is the market's most trusted and most invested company. Blue chip companies are financially strong and they are not affected much by market fluctuations. Such as: Reliance, Bajaj finserv Ltd, Infosys, Axis Bank, HCL Tech etc. are all blue chip companies listed on Stock Exchange.

If you want to take less risk and want to invest in the stock market for a long time, then you can invest in Blue Chip Share. Most Mutual Funds Companies and FIIs to invest in blue chip share as these stocks save their money from market volatility and earn good returns in the long investment.

Top 100 blue chip stocks

ACC Ltd.

Adani Ports and Special Economic Zone Ltd.

Adani Transmission Ltd.

Ambuja Cements Ltd.

Ashok Leyland Ltd.

Asian Paints Ltd.

Aurobindo Pharma Ltd.

Avenue Supermarts Ltd.

Axis Bank Ltd.

Bajaj Auto Ltd.

Bajaj Finance Ltd.

Bajaj Finserv Ltd.

Bajaj Holdings & Investment Ltd.

Bank Of Baroda

Bandhan Bank Ltd

Berger Paints India Ltd.

Bharat Petroleum Corporation Ltd.

Bharti Airtel Ltd.

Bharti Infratel Ltd.

Biocon Ltd.

Bosch Ltd.

Britannia Industries Ltd.

Cadila Healthcare Ltd.

Cipla Ltd.

Coal India Ltd.

Colgate-Palmolive (India) Ltd.

Container Corporation Of India Ltd.

Dabur India Ltd.

Divis Laboratories Ltd.

DLF Ltd.

Dr. Reddys Laboratories Ltd.

Eicher Motors Ltd.

GAIL (India) Ltd.

General Insurance Corporation of India Ltd.

Godrej Consumer Products Ltd.

Grasim Industries Ltd.

Havells India Ltd.

HCL Technologies Ltd.

HDFC Asset Management Company Ltd.

HDFC Bank Ltd.

HDFC Life Insurance Co Ltd.

Hero MotoCorp Ltd.

Hindalco Industries Ltd.

Hindustan Petroleum Corporation Ltd.

Hindustan Unilever Ltd.

Hindustan Zinc Ltd.

HDFC LTD.

ICICI Bank Ltd.

ICICI Lombard General Insurance Co Ltd.

ICICI Prudential Life Insurance Company Ltd.

Indiabulls Housing Finance Ltd.

Indian Oil Corporation Ltd.

IndusInd Bank Ltd.

Infosys Ltd.

Interglobe Aviation Ltd.

ITC Ltd.

JSW Steel Ltd.

Kotak Mahindra Bank Ltd.

L&T Finance Holdings Ltd.

Larsen & Toubro Ltd.

Lupin Ltd.

Mahindra & Mahindra Ltd.

Marico Ltd.

Maruti Suzuki India Ltd.

Motherson Sumi Systems Ltd.

Nestle India Ltd.

NHPC Ltd.

NMDC Ltd.

NTPC Ltd.

OMGC Ltd.

Oracle Financial Services Software Ltd.

Page Industries Ltd.

Petronet LNG Ltd.

Pidilite Industries Ltd.

Piramal Enterprises Ltd.

Power Finance Corporation Ltd.

Power Grid Corporation Of India Ltd.

Procter & Gamble Hygiene & Health Care Ltd.

Punjab National Bank

Reliance Industries Ltd.

SBI Life Insurance Company Ltd.

Shree Cement Ltd.

Shriram Transport Finance Company Ltd.

Siemens Ltd.

State Bank Of India

Sun Pharmaceutical Industries Ltd.

Tata Consultancy Services Ltd.

Tata Motors - DVR

Tata Motors Ltd.

Tata Steel Ltd.

Tech Mahindra Ltd.

The New India Assurance Co. Ltd.

Titan Company Ltd.

Ultratech Cement Ltd.

United Breweries Ltd.

United Spirits Ltd.

UPL Ltd.

Vedanta Ltd.

Wipro Ltd.

Zee Entertainment Enterprises Ltd.

Hope you understand this article, if there is any question related to this article, then you can ask and comment.

Also read

What is Circuit Breaker in Stock Market

What is Rights issue

What is Speculator

Time Value of Money

Options Trading in India

2020-05-18T20:01:00.036+05:30

Options Trading for beginners

An Option represents the right to buy or sell a security in given time for a specified price or strike price.

Options Trading

You can start Option Trading but how lets go understand some important terminology of option as like What is Strike price?What is Premium?What is Spot price?What is Expiry date? etc all thing I will tell you in this session.

Options are two type-

a.)Calls

b.)Puts

What is Calls and Puts?

A Calls Options contract gives right to buyer for buy a security in given time for a specified price or strike price.A Puts Options contract gives right to seller for sell a security in given time for a specified price or strike price.

Calls options are three type-

a.)In the Money-An In the Money option that would lead positive cash flow to the holder.In the Money option Spot price is greater than Strike price.(Spot price > Strike price)

b.)At the Money-An At the Money option that would lead zero cash flow to the holder.In the Money option Spot price is equal to Strike price.(Spot price = Strike price)

c.)Out the Money-An Out the Money option that would lead negative cash flow to the holder.In the Money option Spot price is less than Strike price.(Spot price < Strike price)

Spot price current market price and Strike price is fixed price at which option contract can be bought and sell.

Options Trading Example

How to trade in options,Lets understand with this examples

Suppose that Mohini and Rohini are two investor-

1.)Mohini thinks if the market goes up,she will buy the call.

2.)Rohini feels that if the market goes down,she will buy the pot.

Case.1

First let's study Mohini's case and also understand option trade strategy of the Call options.In this example,I will explain Call option.What trading option premium will Mohini have to pay, how much chance she has to gain or how much chance of loss.

Lets some Figure with description-

Instrument Type	Option Index
Underlying Asset Option Type	Nifty Call Option
Expiry Date	30 April 2020
Strike Price	9900
Open Price	108.05
High Price	130
Low Price	90
Close Price	110.20

Expiry Date-The options contracts that expire on this date, it always happens on the last Thursday of every month. If there is a holiday on the last thursday, then the expiry will be on Wednesday itself.

APRIL 2020
M	T	W	T	F	S	S
		1	2	3	4	5
6	7	8	9	10	11	12
12	14	15	16	17	18	19
20	21	22	23	24	25	26
27	28	29	30	31

Strike Price-Underlying Asset price per share in option is 9900.

How much money or trading option premium will Mohini have to pay to buy the call

Premium= Call Price x Lot Size (Nifty lot size is 75 per unit for option contract)

= 110.20 x 75

= 8265 rs

Mohini will pay 8265 rs for buy the call.

Profit or Loss-An one point increase will give Mohini a gain of 75 and one point fall is 75.

Suppose Mohini bought options contract on April 23 and paid a premium of 8265 rs.

The options contract will end on April 30, now Mohini has six trading sessions. Let's understand its profit and loss with six trading session price.

APRIL 2020
M	T	W	T	F	S	S
		1	2	3	4	5
6	7	8	9	10	11	12
12	14	15	16	17	18	19
20	21	22	23	24	25	26
27	28	29	30	31

When Mohini buy the call

Loss	Profit
Limited Loss	Unlimited Profit

Mohini has predicted that the market will go up, but the market can also go down, we will speculate on both aspects.

If the market goes down

DATE	CALL CLOSE PRICE
23 APRIL 2020	91.80
24 APRIL 2020	77.0
27 APRIL 2020	50.25
28 APRIL 2020	38.75
29 APRIL 2020	12
30 APRIL 2020	00

Loss-If the price of the call is consistently low in these six trading sessions,And on the expiry day, the price becomes zero.We evaluate her loss from the closing price of the expiry day.

The maximum loss will be 8265.When Mohini buy the call, it has limited loss which is equal to her trading option premium.

If the market goes up

DATE	CALL CLOSE PRICE
23 APRIL 2020	120.35
24 APRIL 2020	125.70
27 APRIL 2020	140.0
28 APRIL 2020	190.0
29 APRIL 2020	240.0
30 APRIL 2020	290.0

If Mohini goes to the market as per her estimate then she benefits. We evaluate her profit from the closing price of the expiry day.

Profit-If the rate of call of a siren rises to 290 by expiry.

=290 x 75

=21750 rs

She invested 8265 rs that mean pure profit is (21750-8265=13485).

it will be the maximum profit. This is an example of call options. Sometimes good news in the market increases the market and the investor benefits greatly.

Case.2

Rohini feels that if the market goes down, she will buy the put.Because he knows that when the market goes down, her put option will increase and she will gain, but if the market goes up, the put option will go down, then she will suffer loss. Let's understand this from example.

Let's study Rohini's case and also understand option trade strategy of the put option,How do puts option work.What premium will Rohini have to pay, how much chance she has to gain or how much chance of loss.

Lets some Figure with discription-

Instrument type	Option Index
Underlying Asset Option Type	Nifty Put Option
Expiry Date	30 April 2020
Strike Price	9900
Open Price	89.0
High Price	107.0
Low Price	81.0
Close Price	87.35

We have taken the example of the same with the strike price and expiry date for put option.

How much money or premium will Rohini have to pay to buy the Put Option

Premium= Put Price x Lot Size (Nifty lot size is 75 per unit for option contract)

= 87.35 x 75

= 6551.25 rs

Rohini will pay trading option premium 6551.25 rs for buy the put option.

Profit or Loss-An one point increase will give Rohini a gain of 75 and one point fall is 75.

Suppose Rohini bought Put contract on April 23 and paid a premium of 6551.25 rs.

The contract will end on April 30, now Rohini has six trading sessions. Let's understand its profit and loss with some examples.

When you buy the put option

Loss	Profit
Limited Loss	Maximum Profit

The maximum loss in the put option in the case of buy.It will be equal to the premium paid means in this case Rohini maximum loss will be 6551.25 rs because If the market goes up then the put option will go down

The maximum profit in the put option,if Nifty can fall only till zero.it will be maximum profit of Rohini because If the market goes down then the put option will go up.

Rohini has predicted that the market will go down, but the market can also go upside ,we will speculate on both aspects.

If the market goes up.Then the price of the put option will fall.

DATE	PUT CLOSE PRICE
23 APRIL 2020	85.0
24 APRIL 2020	70.25
27 APRIL 2020	59.25
28 APRIL 2020	32.35
29 APRIL 2020	9.25
30 APRIL 2020	00

Loss-If the price of the Put Option is consistently low in these six trading sessions,And on the expiry day, the price becomes zero.We evaluate her loss from the closing price of the expiry day.

The maximum loss will be 6551.25 rs.When you buy the Put Option, it has limited loss which is equal to trading options premium.

If the market goes down.Then the price of the put option will increase

DATE	PUT CLOSE PRICE
23 APRIL 2020	92.75
24 APRIL 2020	135.35
27 APRIL 2020	190.35
28 APRIL 2020	225.0
29 APRIL 2020	240.25
30 APRIL 2020	255.25

Profit-If the price of Put Option a rises to 255.25 by expiry.

=255.25 x 75

=19143.75 rs

She invested 6551.25 rs that mean pure profit is (19143.75-6551.25=12592.5 rs).

It will be the maximum profit. This is an example. If the assumption is correct then good profit can also be made in the Put option. This principle is useful when the market gets bad news, then the market falls below and the Put option price goes up.

In this lesson, I have told buy call strategy and buy put strategy. How can you have loss and profit in call or put option, this options buying strategy is also called long call and long put.

Sell Options Contracts

Short Call Or Sell Call

If any one sold that call option,the maximum gain for the short call option will be equal to the premium received,then maximum loss for the short call or sell call position is unlimited.

Loss	Profit
Unlimited Loss	Equal to premium

If we takes previous example

When Mohini purchased call ,she has maximum loss is 8265 rs and profit is unlimited.Similarly,if maximum profit for buy a call is unlimited,then maximum loss for the short call position has to be unlimited,whenever the long call option is making losses,the short call option will make profit and vice- versa.

Short Put Or Sell Put

If any one sold that put option,the maximum profit for the short put has to be equal to premium received.and loss in maximum in short put or sell put position.

Loss	Profit
Maximum Loss	Equal to premium

If we takes previous example

When Rohini purchased Put ,she has maximum loss is 6551.25 rs and profit is maximum,if Nifty can fall only till zero.Similarly maximum profit for short put will be 6551.25 rs and loss will be maximum and vice-versa.

Hope you understand this article Options Trading in India,It will be helpful for beginners in options trading.If there is any question related to this article, then you can ask and comment.

Also read

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Top 100 Blue Chip Companies

What is Speculator.

2020-05-13T13:48:00.006+05:30

Speculator Definition

Buying an asset or stock thinking that its rate will increase in the future is those individuals are called Speculators.This is a kind of guess that the trader makes based on a news and stock result.

People who work on the Speculation process have more risk capacities.

Speculators perform in all types of markets. They can buy and sell stocks in this market. They works in Real estate, commodities market or currencies market etc means they can work in any valuable financial instrument. Speculation is risky, which is created due to news or stock results or news of a stock market.

Speculation is directly related to income, it is involved in economic activity. People who are a news based trader analyze speculation activity very well.

There are many sources of speculation, first news and secondly a big trader is making a position in that stock.

Many people in speculative activity make more profit by taking minimum push with higher volume.

If you are consider a trade opportunity like this and after your analysis it is clearly a lose it all or make a lot of money,This is called Speculation.

Volatility and Speculation

Volatility and Speculation correlate to each other.

What is the relationship between stock Speculation and Volatility? A stock that has speculative stage not considered to be a good stock. Do not trade in that stock. Because Speculative is active in it but people who are speculators make that stock position.

What happens in stock speculation and volatility, you will see that when a stock results, or there is news related to that stock, then it starts to stir, due to which the stock starts moving up and down.

Speculation can increase short-term volatility.It can increase prices and give rise to bubbles.

Some may see speculators as gamblers, but speculators are actually an essential part of markets that provide much needed liquidity to markets and are thus an important component of market efficiency.

Hope you understand this article what is Speculator, if there is any question related to this article, then you can ask and comment.

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Technical Analysis of Stocks.What is Dow Theory?

2020-05-08T12:30:00.008+05:30

Technical Analysis

Technical Analysis helps to describe and forecast changes in stocks prices by studying of the market data, In this phenomenon study of previous data of share prices and predict the future trends is known as Technical Analysis.

Technical Analysis done from four important factors-

1.)Price-When the price of any stock changes, its affects the demand and supply, the reflection of the price of the stock changes the attitude of the investors.

2.)Volume of Share-Price changes reflected to volume of transaction.If the price is high then the volume is low or price is low then the volume is high.

3.)Time-Share price movement is a role of time.its calculate for longer position or short position.

Tools of Technical Analysis-

Two things are important to check behavior of share market whether the share price will go down or up.

a.)Behavior of Price

b.)Share Volume

Many theories have been discovered for technical analysis, one of them is Dow Theory. Let us understand this a little easier.

What is Dow Theory?

The Dow Theory is one of the most famous and easiest technical tools.Its is originated by Charles Dow, who founded Dow Jones company. Greiner and Whitecomb assert that"The Dow Theory provides a time tested method of reading the stock market behavior.

Dow Theory

Market Discount Everything

Market has three Movement

Price Action determines of stock

Price Volume Relationship

Average must confirm of Stock

The some basic rule of the Dow Theory are as follow-

1.)Market Discount Everything-

Market analysis every thing for pricing as like past ,present or future price,its analyze market participant or demand and supply graph, this all thing is reflected the share price.

2.)Market Three Movements-

Market has three Movement.Primary Movement,Secondary Movement and Minor Movement.In Primary Movement studies last several years market trends.It can either be a rising or a falling trend.In Secondary Movement studies of 3 week to many month of stock market important bullish or bearish graph.In Minor Movement studies of daily price that form only intraday trading are called Minor Movement,minor movement data is not implement for long term forecasting.

3.)Price Action Determines the trends of stock-

Price Action determines means trends of successive rallies lead to peaks and bearish trends is marked by a series,the bottom and top points are marked on the graph by which the market trading strategy is created.

4.)Price Volume Relationship-

Price Volume relationship is very important term for technical analysis.Price changes is reflected to volume of transaction.If the price is high then the volume is low or price is low then the volume is high.

5.)Average Must Confirm of Indices-

As few indices or averages must be confirm each other,if the market is truly a measurement of future business conditions, the industry average and market average should by and move together.

Hope you understand this article,if there is any question related to this article, then you can ask and comment.

Read also

Make Money Online,Invest in Stock Market.

What is future trading?

2020-05-05T12:11:00.007+05:30

Future Trading Terminology

A future contract is an agreement between two parties to buy or sell an asset at certain time in the future at a certain price.Stock index future represent an inexpensive and highly liquidity market.
Stock index future can be used to hedge the risk in well diversified portfolio of stocks.Future trading are highly leverage and have high liquidity compared to cash segment.

Advantages of future trading-

Trading in the future is cheaper and profitable compared to cash market,If you buy in cash market then you have to pay full margin amount.

Example-If the share of a company is 250 rs and you have to purchase 500 shares, you have to give 125000 rs.

Future trading can be so profitable is the high leverage to future contract an investor only has to pay small amount of the contact value (it can be usually 11-25% as margin).

If you are purchase same company share in future and its future price 252(Future price is different from spot price) Its lot size is 500 shares.Then contract value will be-

Contract Value= Lot Size x Price of Future

=500 x 252

=126000 rs

=126000 x 20%

Initial Margin=25200 rs(In future trading, you have to pay 20% of the contract value for that company's stock).

Assume the future price of share increase at 270 .this means profit will increase(270-252=18)and lot size was 500 share than profit will be 9000 rs (18 x 500).

Future trading

Party A-----------------------------------------------------------Party B

A contract between two parties

How do future trading

Selection of stock future

⇩

Contract cycle

⇩

Expiry date

⇩

Lot size

⇩

Initial margin

⇩

Buy or Sell

⇩

Mark to Market

⇩

Maintain Margin

Some important points related to future trading-

a.)Spot Price-The price at which an asset trades in the current market.

b.)Future Price-The price at which the future contract trades in the futures market.

c.)Contract Cycle-The index futures contracts have one month,two month and three month expiry cycle,which expire on the last Thursday of the month.

d.)Expiry Date-All derivative contract expire on the last Thursday of month.

e.)Lot Size-Future contract is a standardize contract.Lot size is the number of shares we need to buy or sell,By increasing the quantity of lots we can increase the number of share.

f.)Initial Margin-The amount that must be deposited in the margin account at time a future contract is first entered into is known as initial margin.

g.)Mark to Market-In future trading,the account adjusted to reflect the investor gain or loss on daily basis.This is called Mark to Market.

d.)Maintain Margin-If the balance in the account falls below the maintenance margin,the investor receives a margin call therefore, it is important to maintain balance.

Some important point-

a.)Once the trade is executed ,the margin will be blocked,once we square off the future margin are unblocked.
b.)The profit or loss made on the transaction will be credited or debited of account on same day.
c.)You can square of the position at any time on profit It's not like this,Once we enter into a future contract there is no obligation stick to agreement until contract expire.

Hope you understand this article what is future trading, if there is any question related to this article, then you can ask and comment.

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What is Rights issue

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Make Money Online.Invest in Stock Market.

2020-04-30T17:44:00.026+05:30

Make Money Online

Today, all people want to earn money, many people work hard all day, but they do not earn much money.People in the world earn money in two ways, one hard work and the other smart work earn money from hard work, only they are able to keep their food catering and living properly, but with smart work people change their lifestyle.One such way is the stock market.This is legal way for Make Money Online. Many people invest in the stock market, but due to lack of knowledge,they make a loss. How to invest in the stock market ?What knowledge should they have?How to Make Money Online. I will tell you in this session.

We need open Demat account to invest in stock market.Demat account is an account to hold stock in electronic form. The documents required for Demat account are as follows.
a.)Aadhaar card
b.)Pan card
c.)Bank Account
d.)Photo

How to invest in share market?

Procedure for buy a stock in stock market

Selection of broker
⇓
Open a demat account
⇓
Investment amount
⇓
Choose right stock
⇓
Place an order
⇓
Contract note
⇓

Settlement of stock

What to keep in mind while investing in the stock market-

a-)Invest surplus amount in stock market -

If you have additional money for investment in the stock market which you do not have to use, invest the same money in the stock market.

b.)Understand stock market-

No one can say that you will benefit in the stock market from first investment For this, you will have to gather stock information and understand the background management,business model or P/E ratio etc. of the company in which you are investing.

c.)Awareness of stock market-

For knowledge of the stock market market, read the magazine, like Business today ,Business Standard , Economics Times and watch the TV channel giving knowledge of the stock market.

d.)Stock Analysis-

How to analyze the stock I have explained in my previous blog, we do this in three ways, first economic analysis, industry analysis and last company analysis.

e.)Don't invest whole amount-

According to me, you should not invest all your money in one share at a time, only 60% of the money you invest in a stock and you keep 40% of money, if the value of your share comes down, then buying more shares for average.

f.)Diversify portfolio-

Never invest all your money in one share.You choose four to five companies that are performing well and have good financial performance,which will give you good profit and less chance to loss.Never put all eggs in one basket.

g.)Invest for long term-

Research stock and holding for long term because this type of investment giving dividend,stock splits and the stock rates keep increasing gradually.

h.)Start with little amount-

You can learn by investing small amount,how to work in the stock market? which stocks should be bought or which company is good? just take care of one thing no hurries because the stock market is not a magic in which you become rich as soon as you invest money.

i.)Calculation before selling stock-

Before selling a stock, calculate its tax and brokerage so that you know the profit.

How to choose the right stock-

1.)Know the company in which you are investing
2.)What business does that company do?
3.)Management collaboration
4.)Return on investment
5.)Net profit margin
6.)Earning per share
7.)Dividend payout ratio
8.)Diversification of company

Hope you understand this article Make Money Online, if there is any question related to this article, then you can ask and comment.

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How the stock market works in India