Tuesday, July 13, 2021

KEEP EYE ON INFOSYS STOCK RESULT

"BUY INFOSYS FUT 2 LOTS  ABOVE 1555  TARGET 1575/1600 SL 1525"

Tomorrow IT major infosys will release its earnings for the first quarter ended June 2021.We expect the IT firm to report strong earnings growth during the quarter and to revise full-year revenue growth forecast upward. We forecast sequential revenue growth rate of 4.5 % in constant currency driven by higher billing days and seasonal strength, the ramp-up of large deals, and higher spending across all major verticals. Infosys to raise FY22 revenue growth guidance to 13-15 % in constant currency terms from 12 % earlier, while we expect the same to be revised to 14% Both the brokerage feels the company will maintain EBIT margin growth guidance at 22-24%."Infosys is strongly positioned with FY21 deal total contract value at $14.1 billion with 66 % net new deals. We expect strong pick up in TCV & strong commentary for the deal pipeline.
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Tuesday, July 6, 2021

RULES FOR SUCCESSFUL STOCK MARKET TRADING

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If you're new to trading, you probably just want to know how to hurry up and make money.Each of the rules below is important, but when they work together the effects are strong. Keeping them in mind can greatly increase your odds of succeeding in the markets.

Always Use a Trading Plan-A trading plan is a written set of rules that specifies a trader's entry, exit, and money management criteria for every purchase.With today's technology, it is easy to test a trading idea before risking real money.

Treat Trading Like a Business-To be successful, you must approach trading as a full- or part-time business, not as a hobby or a job.If it's approached as a hobby, there is no real commitment to learning. If it's a job, it can be frustrating because there is no regular paycheck.Trading is a business and incurs expenses, losses, taxes, uncertainty, stress, and risk. As a trader, you are essentially a small business owner and you must research and strategize to maximize your business's potential.

Protect Your Trading Capital-Saving enough money to fund a trading account takes a great deal of time and effort. It can be even more difficult if you have to do it twice.It is important to note that protecting your trading capital is not synonymous with never experiencing a losing trade. All traders have losing trades. Protecting capital entails not taking unnecessary risks and doing everything you can to preserve your trading business.

Become a Student of the Markets-Think of it as continuing education. Traders need to remain focused on learning more each day. It is important to remember that understanding the markets, and all of their intricacies, is an ongoing, lifelong process.Hard research allows traders to understand the facts, like what the different economic reports mean. Focus and observation allow traders to sharpen their instincts and learn the nuances.

Risk Only What You Can Afford to Lose-Before you start using real cash, make sure that all of the money in that trading account is truly expendable. If it's not, the trader should keep saving until it is.Money in a trading account should not be allocated for the kids' college tuition or paying the mortgage. Traders must never allow themselves to think they are simply borrowing money from these other important obligations.Losing money is traumatic enough. It is even more so if it is capital that should have never been risked in the first place.

Develop a Methodology Based on Facts-Taking the time to develop a sound trading methodology is worth the effort. It may be tempting to believe in the "so easy it's like printing money" trading scams that are prevalent on the internet. But facts, not emotions or hope, should be the inspiration behind developing a trading plan.Traders who are not in a hurry to learn typically have an easier time sifting through all of the information available on the internet. Consider this: if you were to start a new career, more than likely you would need to study at a college or university for at least a year or two before you were qualified to even apply for a position in the new field. Learning how to trade demands at least the same amount of time and fact-driven research and study.

Always Use a Stop Loss-A Stop Loss is a predetermined amount of risk that a trader is willing to accept with each trade. The stop loss can be a dollar amount or percentage, but either way, it limits the trader's exposure during a trade. Using a stop loss can take some of the stress out of trading since we know that we will only lose X amount on any given trade.Not having a stop loss is bad practice, even if it leads to a winning trade. Exiting with a stop loss, and therefore having a losing trade, is still good trading if it falls within the trading plan's rules.The ideal is to exit all trades with a profit, but that is not realistic. Using a protective stop loss helps ensure that losses and risks are limited.

Know When to Stop Trading-There are two reasons to stop trading: an ineffective trading plan, and an ineffective trader.An ineffective trading plan shows much greater losses than were anticipated in historical testing. That happens. Markets may have changed, or volatility may have lessened. For whatever reason, the trading plan simply is not performing as expected.Stay unemotional and businesslike. It's time to reevaluate the trading plan and make a few changes or to start over with a new trading plan.An unsuccessful trading plan is a problem that needs to be solved. It is not necessarily the end of the trading business.
An ineffective trader is one who makes a trading plan but is unable to follow it. External stress, poor habits, and lack of physical activity can all contribute to this problem. A trader who is not in peak condition for trading should consider taking a break. After any difficulties and challenges have been dealt with, the trader can return to business.

Keep Trading in Perspective-Stay focused on the big picture when trading. A losing trade should not surprise us; It's a part of trading. A winning trade is just one step along the path to a profitable business. It is the cumulative profits that make a difference.Once a trader accepts wins and losses as part of the business, emotions will have less of an effect on trading performance. That is not to say that we cannot be excited about a particularly fruitful trade, but we must keep in mind that a losing trade is never far off.

Conclusion-Understanding the importance of each of these trading rules, and how they work together, can help a trader establish a viable trading business. Trading is hard work, and traders who have the discipline and patience to follow these rules can increase their odds of success in a very competitive arena.
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Saturday, July 3, 2021

WHAT IS CALL OPTION & PUT OPTION ?

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OPTION:- Call option and Put option are the two main types of options available in the derivatives market. A Call option is used when you expect the prices to increase/rise. A Put option is used when you expect the prices to decrease/fall. Options are derivative contracts which have no value of their own and derive their value from the value of the underlying asset. The underlying asset can be shares, currencies, commodities etc. An options contract gives the buyer the right but not the obligation to buy or sell the underlying asset within a specified date (known as the expiration date) and at a specific price (known as the strike price). In options, the buyer of the option has the right of exercising the option or cancelling it. The loss for the option buyer is limited to the premium paid. 

TYPE OF OPTION
1- CALL OPTION
2- PUT OPTION

CALL OPTION-A call option gives the buyer the right but not the obligation to buy the underlying asset at a particular price (strike price) on or before the expiration date. 

PUT OPTION - A put option gives the buyer the right but not the obligation to sell the underlying asset at a particular price (strike price) on or before the expiration date. 

Basic terms relating to call and put options๐Ÿ‘‡

1.       Strike Price: Strike price is the price at which buyers and sellers decide to buy or sell the underlying asset after a specified period. 

2.   Spot Price: Spot price is the current price of the underlying asset in the stock market.  

3.   Option Expiry: Options contracts expire on the last Thursday of the month. 

4.   Option Premium: Option premium is the non-refundable amount paid upfront by the option buyer to the option seller (also known as option writer). 

5.   Settlement: Option contracts are cash settled in India.

What is the Difference Between Call Option & Put Option?

Parameters

Call Option

Put Option

Meaning

Call option gives the buyer the right but not the obligation to Buy

Put option gives the buyer the right but not the obligation to sell

Investor’s expectation

A call option buyer believes the stock prices will rise / increase

A put option buyer believes the stock prices will fall / decrease

Gains 

For a call option buyer, the gains are unlimited

For a put option buyer, the gains are limited as the stock prices will not become zero. 

Loss

For a call option buyer, the loss is limited to the premium paid. 

For a put option seller,  maximum loss is strike price minus premium

Reaction to dividend

Calls lose value as the dividend date nears. 

Puts increase in value close to the dividend dates. 


Thursday, July 1, 2021

INTRADAY TRADING STRATEGIES ๐Ÿ‘๐Ÿ‘๐Ÿ‘

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Intraday trading involves taking long or short positions in securities and squaring off the positions before the end of the trading day. The tools and techniques used for intraday trading are fundamentally different from those used for long-term investing. Intraday trading involves taking long or short positions in securities and squaring off the positions before the end of the trading day. Intraday trading requires two parties for a trade, one to sell and the other to buy the stocks. The market is very volatile, and profits do not depend only on the market going up. You can make a profit even when the market is moving downtrend. A day trader can make money irrespective of whether the market is going up or down.In this article, we will discuss some of the disciplines that a day trader should get used to before taking up intraday trading.

๐Ÿ‘‰  Trade with money you can afford to lose: It's vital to set aside a certain amount of money for day trading. But it is important for a trader to first focus on how much loss he is willing to take overall, and on a per trade basis.

๐Ÿ‘‰  Follow strict stop loss: One of the biggest traits that set apart winning and losing traders is discipline. Make it a habit to use ‘stop-loss’. A stop loss order is an automatic order to buy or sell a stock when its price reaches a specified  ..
๐Ÿ‘‰ Entry and exit strategies: Sometimes a trader might get fascinated by a particular stock, but we should not forget that one has rely on specific strategies to make a profit from it. One should stick to certain set guidelines religiously in intraday trading.

๐Ÿ‘‰  Choose liquid stocks: Liquid stocks tend to have high volumes and this can allows for purchase or sale of larger quantities without significantly impacting the price. This can help grab any potential gain that may  arise from large price movements on any given day. Since intraday trading strategies are dependent on speed and precise timing, a high degree of volume makes it easier to get into and out of a trade.
๐Ÿ‘‰  Keep business and emotions separate: The intraday market is very volatile, and we may experience great profits or losses within a short span of time. Hence, it is important to have tight controls over one’s emotions. One should not get too excited by the profits he makes, and not get disheartened by losses. A day trader has to have a very alert mind to be able take quick decisions. For this, one has to have a mind free of emotions.

๐Ÿ‘‰ Do not over trade: This is the golden rule of intraday trading. The share market may not always trend, or trend in a predictable manner. Trading only in a handful of stocks at a time is the best way to go about with your day trading. If we continue to ignore the market response, that can be a sure-shot recipe for losing your money.
These rules are really important for intraday margin trading. It is essentially an activity that calls for discipline and risk management and can only be perfected over time. It would not be wrong if we say that intraday trading requires bringing a certain of uniformity to the trader’s lives.
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Saturday, June 26, 2021

BENEFITS OF TRADING IN STOCK FUTURES

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A futures contract is a contract or agreement between two parties to conduct a transaction at a predetermined locked down price at some point in the future. It is essentially a bet on the prospects of a stock, one of the multiple financial trades you can perform. Two parties take opposing stances, with one agreeing to buy shares and the other agreeing to sell them at a certain price sometime later, irrespective of the prevailing market price then.To illustrate, consider two trading entities A and B. A holds the view that the value of a stock would rise from its present value in the future while B believes the opposite. A and B enter into a contract with A agreeing to buy shares of the stock from B at the present price sometime in the future. If A’s bet comes true, that is, if stock value rises, A can get shares of the stock at a discounted price from B. Conversely, if the share value drops, B can sell shares to A at a premium, that is, at a value greater than the market price.

There are 2 primary benefits to future trading - the leverage you receive, and the risk mitigation it offers.

Margins and leverage

Unlike buying equity, one needn't pay in full to buy futures. One need to only pay a percentage of the total contract value to buy or sell in futures. This percentage is called margin and varies between different stock futures. Thus you could buy/sell a lot more shares of futures than equity with a certain amount of money. For example, if the margin is fixed at 20% for futures in a stock, one could buy/sell 5x times more shares in futures than in equity. This ratio is called leverage. Thus, with 20% margin, the leverage is 5. Leverage is a double-edged sword. It multiplies profits manifold but also multiplies losses.
If futures in a stock has a leverage of 5, it means that profits would be five times than that of equity profits. If the equity returns a profit of 20%, the futures offer a return of 100% (Futures profit percentage = Equity profit percentage*Leverage). This is possible because only a fraction of the price is paid to buy futures . But losses would be equally magnified too. A 20% loss in equity would cause 100% loss in futures having a leverage of five.

Hedging against risks

Futures can be used to mitigate or hedge against systemic risks to investment in a single stock or a portfolio of stocks. For single stocks, hedging can be done easily by selling futures at a higher price than the price at which equity was bought. The number of futures sold must be equal to the number of equity shares held by one. Thus, if prices fall, the profit from the selling order in stock futures would offset fall in equity value and vice versa. A fixed return is guaranteed and market fluctuations don't affect the returns. Futures can also be used to hedge against risks to investment in a portfolio of stocks.

POINTS TO REMEMBER

·      With Futures, you do not have to worry about closing your position at the end of the day, while with Cash Trading you need to be mindful of closing intraday positions if you are taking margin.

·         Nifty and certain Equity Futures are usually very liquid; therefore, through liquidity there is a a good chance that the trader will capture the price he seeks.

·         Futures is 0.01%, while intraday Cash Trading charges 0.025% on sell side trading and 0.1% on both buy and sell side trading for delivery transactions.

Friday, June 25, 2021

IS F&O TRADING GOOD ????

FUTURES & OPTIONS are wonderful derivatives that provide enough leverage for trading. Investors can gain larger profits with smaller risk. You just need to adopt some basic option trading strategies for beginners while trading.An option is a contract that gives the buyer the right, but not obligation, to buy or sell an underlying asset at a specific price on or before a certain date.Like stocks, options also involve risks & are not suitable for every trader. Option trading is found to be highly speculative in nature. It carries the risk of losing partial or even entire premium paid by you. You should invest only the partial amount of your total investments in options. However, one of the biggest advantages of option trading is that you can easily hedge your portfolio with them.Hedging with options can limit your potential downside risk. 
In contrast, trading options can be better than trading stocks when appropriately used. However, if the ability to generate relatively reliable analyses and outlook of their underlying assets is not right, both options trading and futures trading may be equally risky.Future trading is capable of producing return on investment and leverage far higher than it can be achieved in trading options.Whether buying call options or put options, the actual risk is limited according to how much money you used to purchase those options. The worst thing that can happen is that the forecast is entirely incorrect, and the choices all go useless.

but our views differ according to the risk profile of the investor. Considering we are talking about trading and not investment,so we suggest -

  • Stock trading only permits day trades. If you want to stay for a longer period, you    need to consider delivery trading.
  • If you hold negative reviews about stocks, consider shorting. Remember, trading       in shares reduces profit-making potential on a good trade.
  •  The losses are minimal as the position size is limited, which is not possible                 under F&O.
  •  But the returns are better with F&O because it offers better opportunities           with  limited   restrictions. The primary constraint is the position size, and traders fear of losing the same.
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Saturday, June 19, 2021

STAY BULLISH IN SBI CARD

BUY SBI CARDS 500 SHARE ABOVE  1000  TARGET 1020/1050 SL 965
SELL SBI CARDS  500 SHARE BELOW 998 TARGET 978/948 SL 1028

SBI Cards & Payment Services shares plunged over 6 % yesterday  as Carlyle Group was looking to sell its stake worth Rs 5000 crore in the credit card company. About 1.9 crore shares had changed hands by noon against the daily average of 0.8 lakh.Over 5 crore shares of the company were traded. Bulk deal data will be released post-market hours. Total turnover stood at Rs 1907 crore at noon. On NSE, shares worth Rs 5013 crore were traded.The per share price band decided by the seller is Rs 1,002-1,041.30, which is at a 4.7% discount to Thursday’s closing price of Rs 1,051. The SBI Card stock has gained over 70% in the last one year. It has risen 18 % so far in 2021.The company's shares were listed at a steep discount over the issue price as the Covid-19 pandemic spooked the markets in March 2020. In March last year, SBI Cards, India’s second-largest credit card firm after HDFC, had launched its maiden initial public offer  in which Carlyle sold a 10% stake for Rs 7000 crore, making a gain of 8.5 times in three years.CA Rover Holdings is planning to offload 5 % stake in SBICARD.
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Tuesday, June 8, 2021

POSITIONAL EQUITY CASH CALL

" BUY HDFCLIFE 300 SHARE CASH ABOVE 690 TARGET 700/719 STOPLOSS 678"

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