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Spread Order

Spread Order What is a Spread Order? A spread order is an advanced order that has multiple legs/orders within a single order. There are 2 types of spread orders SP order 2L, 3L and 4L orders   SP Orders SP orders are used primarily for two reasons Trade Calendar Spreads Roll-over existing positions Let’s understand them better.   Calendar Spreads At its core, a calendar spread order performs two actions simultaneously Going long (buying) on one scrip/contract Going short (selling) on another script/contract, and vice versa Here, the desired scrip/contract is of the same underlying. Let us explain further... Scrips of the same underlying with different expiry dates are available at different prices. This price difference is known as the Spread. Traders initiate a calendar spread order with the intention of profiting on the movement of this Spread. Say Nifty Sept is trading at Rs.9800 and Nifty Oct is trading at Rs.9900, the price difference between these contracts, ie Rs.100 is known as the spread. And this is indicated as a...

After Market Order

After Market Order The Indian Stock Market is up and running on all weekdays for Equity segment, from 9:00am - 3:30pm F&O segment, from 9:15am - 3:30pm Currency segment, from 9:00am - 5:00 pm Commodity segment, from 10:00am - 11:45pm There are many of you that cannot participate in the markets during these hours for various reasons, the most common being attending to your primary profession or your day job. Fret not, the Jini has answered your wishes, because now, thanks to the AMO feature, you will never miss a trading opportunity ever again.   What is an After Market order? AMO is an advance order that allows traders to place buy/sell orders after regular market hours. In other words, an AMO is similar to a normal order with the exception that it is placed after regular market hours. An AMO for different segments have set time slots for it to be considered as valid, and they are Products AMO slots Equity spot/cash Market 5:00pm to 8:59am Equity F&O Market 5:00pm to...

Basket Order

Basket Order What is a Basket Order? Basket Order is a handy feature provided by Tradejini to all traders. It is an amalgamation of all your orders listed in a single window. This changes everything! Now, you will no longer have to place all your orders individually as multiple orders can be executed at an instance with a Basket Order.   How does a Basket Order work? A Basket Order enlists all your orders in one window. This can be extremely time-saving as traders usually place multiple orders one by one. To elaborate further, Assume Ramji, our superficial but extremely adventurous fictional character, has to buy groceries from the nearby supermarket. Ramji enters the supermarket and walks the aisles for a while, he picks a 5kg packet of sugar and proceeds to the cash counter where he gets his item billed and pays for it. Ramji walks back to the aisles, picks up a 10kg bag of wheat, walks back to the cash counter to complete the purchase. Ramji now explores...

Shares and Commodity Trading In One Account

Shares and Commodity Trading In One Account Starting 01 April 2018 we unfold a new chapter of trading in the Indian stock market where commodity and equity clients can trade with a single entity. Let’s understand the history/background of this new chapter. The Indian derivatives market is divided between equity, currency & commodity market where Equity & Currency market was regulated by SEBI and The commodity market was regulated by forwarding Market Commission (FMC). Arun Jaitley (Finance Minister of India) during the budget presentation of 2015  proposed SEBI as the single regulator of equity, currency & commodity derivatives market and as a result, SEBI on 28 Sept 2015 took charge as the single regulator. SEBI being a single regulator on Sept 2017 proposed trading in equity and commodity market via a single entity.   So what is in to for Traders?? Current Scenario Individuals who trade in both equity and commodity market have to transfer money to 2 companies (one of equity & other of a commodity) and this was a huge constraint as it would result...

Margin Shortfall Penalty

Margin Shortfall Penalty Margin shortfall penalty will be levied by the exchanges when there is a margin shortfall on overnight positions held in the trading account without sufficient margin as prescribed by the exchange. This penalty is applicable only for overnight margin shortfall however it does not apply for intraday positions. Margin shortfall is applicable to stock, commodity and currency exchanges (NSE, BSE, MCX, and MCX-SX). For more details about the prescribed margin required for Derivative future contracts please visit Daily Margin required for NSE Future contracts. How the Margin Penalty is calculated If the overnight margin is less than 1 lakh and the margin shortfall is less than 10% of applicable margin then, 0.5% of penalty is levied and in case if the margin exceeds 1 lakh or the margin shortfall exceeds 10% of applicable margin then, 1% margin is levied on the margin shortfall. Short collection for each client Penalty percentage (< Rs 1 lakh) And (< 10% of applicable margin) 0.5% (= Rs 1 lakh) Or (= 10% of...

Cover Order Explained

Cover Order Explained Traders that usually trade with high leverage often use Cover Orders to control risk and protect themselves from potential losses. Really? There are ways to cut losses and minimize risk?... YES! Does a Cover Order help in any way?... YES! Okay, How?... Well, let’s find out.   What is a Cover Order? A Cover Order is an advance intraday order that is accompanied by a compulsory Stop Loss Order. This helps traders minimize their losses by safeguarding themselves from unexpected market movements. A Cover Order offers high leverage and is available in Equity Cash, Equity F&O, Commodity F&O, and Currency F&O segments. It has 2 orders embedded in itself, they are Limit/Market Order Stop Loss Order   How does a Cover Order work? A Cover Order can be placed either as a Market or a Limit Order. Although a Market Order executes the order at the current market price, a Limit Order is executed only when the price of the share hits the desired entry price. Let’s look at...

Calculating Correct Investment Returns?

Calculating Correct Investment Returns? The only reason people make investments is to get returns. Most people think that they know how to calculate actual returns. But many don’t use the right method to calculate returns. Using the wrong method to calculate returns can give an incorrect picture of your investments. For example, a person tells you that his investments of Rs 25 lacs in stocks are now worth Rs 75 lac. He is very happy to have tripled his original investment. But when he tells you that this increase has taken place in 15 years, will you still consider it to be a good investment? We try to answer this question by understanding the 3 main ways to calculate returns Absolute returns, Compounded annual growth rates & IRR Let's use the above example to understand these methods.   Absolute Returns Absolute Return (AR) is a simple way of calculating returns. It uses point-to-point values to calculate returns within a given period. It is calculated as follows: Absolute Returns = (Final Value - Initial Value)/Initial...

Introduction to Fundamental and Technical analysis of stock

Introduction to Fundamental and Technical analysis of stock Introduction to fundamental and technical analysis of stock  buying or selling stock should always be preceded by at least some or other form of rational analysis that is backed by data. This ensures that the investor or trader has done some groundwork before taking the buy/sell decision and is not just throwing darts in the dark. At a very broad level, there are two disciplines of doing the stock analysis: Fundamental Analysis of stock Technical Analysis of stock Both are very different from each other and attract market participants of different financial profiles and time horizons.   Fundamental Analysis of stock This analysis requires an evaluation of a company’s business by analyzing its qualitative and quantitative parameters. Qualitative parameters involve rational analysis and earnings projection by analyzing key financial indicators. For this, analysts delve deep into a company's past years balance sheets, income statement, cash flow statements, and disclosures. Quantitative parameters, on the other hand, require analyzing other non-financial aspects of the company like management quality, corporate governance, treatment of minority shareholders,...

Types Of Stocks

Types Of Stocks People invest in stocks to earn higher returns than what fixed income products offer. But all stocks are not the same. Like the companies and businesses, the stocks of different companies also have different characteristics. In general, companies issue two types of stocks– Preferred (have priority over other shareholders) & Common stocks. In line with its name, the common stocks are the first choice of retail investors. We will be focusing on common stocks in this article. Let’s evaluate different stock classifications that are commonly used:   Types of stocks 0n basis of Market Capitalization Stocks are often classified as large caps, mid caps, small caps, and micro caps on basis of their total market capitalization (Current Share Price x Total Number of Shares). Though there are no exact cutoffs about what exactly is defined as a large-cap and what isn’t, investors usually categorize companies under as follows: Large-cap: Market Cap > Rs 10,000 Crore (Cr) Mid-cap: Rs 2,000 Cr < Market Cap < Rs 10,000 Cr Small-cap: Rs...

Impact Of Inflation

Impact Of Inflation Do you remember how much a week’s worth of grocery cost you 2 or 3 years back? Does the same amount of grocery still cost you the same? We are sure that the answer is a big and an emphatic NO! This is the impact of inflation. To put it simply, inflation is a general rise in prices of various goods and services year after year. With each passing year, inflation reduces the number of things you can buy with a fixed sum of money. So if you were able to purchase 5 kgs of an item for Rs 200 in the year 2011, chances are that you would get lesser amount (maybe just 3 kgs) of the same item for Rs 200 in 2016. Causes of Inflation Sometimes, people have sufficient money and continue to buy goods and services, thereby increasing their demand. This increase in demand leads to an increase in prices, and hence - inflation. At times, the prices of raw materials used in production can...