OPTION TRADING TIPS

Monday, 12 June 2023

OPTION CALL PUT TIPS FOR 12 JUNE 2023

BUY 1 LOT SRF 2300 PUT @ 26-27 TARGET 35-36

BUY 1 LOT BEL 125 CALL @ 2.2-2.25 TARGET 3.4-3.5

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Sunday, 11 June 2023

Bank Nifty Lot Size Reduced by 40%: Positive or Negative?

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The Nifty Bank Index, an industry index measuring the banking sector, is one of the most traded indices on the NSE. This index is also a favorite of option sellers who like to write options on this index, especially the weekly ones. Most of you are aware that there is a periodic lot size review for securities in the derivatives market that is performed by the exchanges to maintain their contract value. So if a security falls too much during a set period, its lot size is revised up to restore the contract value. Likewise, for a security that increases significantly in a short period of time, the lot size is reduced in the immediate lot size schedule to lower the contract value (contract value = lot size x price). At the last lot size revision, NSE decided to reduce the lot size of Nifty Bank by 40% from the current 25 to just 15 shares. How does this affect your trading and more importantly, is it good or bad?

In my opinion, it has no disadvantages, only positive aspects. First, reducing the lot size leads to a reduction in the overall contract value, which simply results in lower margins. Currently, 1 Bank Nifty Near Month Futures contract requires margin of INR 1,40,000. This is higher than Nifty 50's margin requirement of INR 1,02,000 as there is a big difference between the contract values of both. At the close on Friday, the contract value of Nift 50 was INR 8,67,987 compared to INR 10,15,216 for Bank Nifty.

Obviously, margin fluctuates all the time and depends on several other factors like volatility, but total contract value is the most important factor in how much margin you have to pay. So, after the lot size change, Nifty Banks' margin would decrease noticeably.

Second, lower margins would further increase liquidity. As more traders would be able to trade this index, we could likely see a gradual trend of increasing volume, which is beneficial to all as it reduces the impact cost (difference between bid and ask price). If you leave the current weekly and monthly contracts, subsequent contracts will have less liquidity. Third, a lower contract value also generally reduces risk without traders having to do anything. Where you used to lose 200 points (INR 5,000), the same 200 point action against you now minimizes your loss to INR 3,000. Some traders might complain that this also reduces profit size, which is true, but then multiple contracts can be traded. In summary, lower margins, lower risk and higher liquidity would contribute to a better trading experience. If the lot size is reduced, an increase in the quantity blocking limit is also to be expected.

Now the main question as to when these changes will take place: All monthly contracts expiring in July 2023 will have the changed lot size. The current monthly contracts in April, May and June 2023 will have the existing lot size of 25. All weekly contracts from August 2023 with weekly expiration and beyond will have the revised lot size. The lot size of all existing long-term option contracts (with expiration). longer than 3 months) will be revised after the end of the monthly contract in June 2023.

The securities quoted are for illustration only and are not recommendatory . Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Saturday, 10 June 2023

8.00 PM STOCK SUGGESTION FOR TRADING ON MONDAY 12 JUNE 2023

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Atul Ltd

BALRAMPURCHINI

DELTACORP

SRF

EXIDEIND

HAL

APOLLOTYRE

INDIACEM

SBIN

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HOW TO TRADE IN STOCK MARKET ?🤔

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Stock Market For Beginners: A Guide

As an investor or trader, you can experience gains and losses, as well as ups and downs. Therefore, learning how to trade the stock market is important, especially if you are a beginner.

Stock trading usually involves buying and selling stocks on the secondary market on the same day. Therefore, it is necessary to gain an understanding of the primary and secondary markets.

Primary market

In a primary market, companies issue new securities and offer them to the public. The transaction thus takes place between issuers and buyers.

Secondary market

On the secondary market you can buy and sell stocks that are issued on the primary market. The transaction takes place between the seller and the buyer. The exchange or broker acts as an intermediary in the secondary market.

When you buy and sell a stock on the same day, it's called intraday trading. At the end of the day, the trader posts either a profit or a loss.

Process of stock trading for beginners

1. Open a Demat account

To enter the stock market as a trader or investor, you need to open a demat account or brokerage account. You cannot trade on the exchange without a Demat account. The Demat account works like a bank account where you keep money for trading. The securities you buy are managed electronically in the Demat account.

2. Understand stock quotes

A stock's price changes based on news, fundamentals, technical analysis, etc. By gaining knowledge of these aspects, you can expand your knowledge of stocks and stock markets. This will help you determine the right price to enter or exit a trade.

3. Bids and asks

A bid price indicates the maximum price you are willing to pay to buy a stock. The ask rate is just the opposite. It represents the minimum price at which the seller is willing to sell the stock. Setting the right bid and ask price is important to ensure a profitable trade.

4. Fundamental and technical knowledge of stock

Study the stock's fundamental and technical analysis to plan your trading. Fundamental analysis evaluates security by measuring its intrinsic value. Various dynamics are taken into account, including income, expenses, assets and liabilities. Meanwhile, technical analysis evaluates the stock based on the stock's past price and volume chart to predict its future potential.

5. Learn to stop the loss

Volatility is an implied characteristic of the stock market. So, a beginner needs to understand how to prevent heavy losses. While executing a trade you need to set a stop loss price to minimize the loss. Failure to stop the loss can result in severe damage to your capital.

6. Ask an expert Call/ Whatsapp 9039542248

The stock market is unpredictable. No one can accurately predict a stock price. But expert advice will help beginners make the right trading decision. It will help you make the right choice.

7. Start with safer stocks

A large loss of capital can weaken your confidence in the beginning. A wise choice is to start with the less volatile stocks. This can lead to a slow start. But these stocks are more likely to maintain good performance even in adverse conditions. Investing in the stock market can be difficult. You can take the first step towards trading success by opening a Demat account. Next, work to develop adequate knowledge of the stock market. This will help you to counteract all adversity and overcome stock market volatility.

Conclusion

In summary, investing in the Indian stock market can be a lucrative opportunity for investors with a long-term perspective and a diversified portfolio. Although every investment comes with risk, India's growing economy and stable business environment make it an attractive destination for investors looking to expand their portfolio. By doing thorough research and seeking advice from financial experts, investors can make informed decisions and reap the potential benefits of investing in the Indian stock market.