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Quality of Recent IPO- issue Book -How Low can issuers www.Niftyviews.com special report.

2010-02-24T21:57:00.000-08:00

OPTION SUBSCRIBER QUERY ==========CAN BE HELPFUL TO EVERYONE

2009-11-11T19:25:00.000-08:00

Hello tj,
Thank you so much for your mail expressing your worries and problems. We at Team stock researchers are always open to genuine ideas and always strive to make our relationship with our clients more healthy and long lasting. I have noted your problems with minute details and will also be answering it in minute detail. Kindly try to understand the concept of options trading first of all.

I have traded on a large scale in delivery, nifty, bank nifty, stock futures and options and believe me, it has been on a large scale earlier. Out of all forms of trading the stock markets I found options trading the most intricate and quick witted form of trading. It involves the least amount of capital with a higher degree of returns in terms of percentage wise. Hence, I personally too,now do only options trading. As you will know options premiums do not have supports and resistances like nifty or stocks, hence, involve a higher degree of calculation and foresight. It also involves taking into stock, the days left for expiry and finding the most liquid strike price compared to the current market price. A liquid strike price can turn illiquid any time and also an illiquid strike price can suddenly turn liquid in anticipation of a future movement of a stock towards a given target. Hence, finding the right strike price is one dicey part in options trading. Now that is where people like you and so many others who have had a bad experience in options trading in the past seek professional help with companies like us and become our clients. Trading in the right strike prices given the days left for expiry involves choosing strike prices varying between OUT OF THE MONEY TO AT THE MONEY AND ALSO IN THE MONEY. This headache you can leave on us. I hope you have now understood the basics of options trading of which I am sure you too are quite aware of.

Now coming to the way I trade options which has resulted in a high degree of success will also help you in understanding this concept better. Stock options premiums do not project the correct undercurrent during the first 15 minutes of trade and hence we watch the premiums move in a haywire fashion although we helplessly watch the stock prices rise at a fast pace. Patience is utmost important in options trading. There are times when I can wait whole day to give a call until a particular stock comes to my target range and there are times when I can give an instant call like suzlon 70CA given a few days back at 9.56 AM. I being a chartist prepare my charts of the eight stocks mentioned earlier (RIL, SBI, ICICIBANK, TISCO, DLF, UNITECH, HINDALCO, SUZLON) and NIFTY every evening in preparation for the next day on a piece of paper. Hence, all resistance and support levels are there on paper for for me to see. When I see a certain stock breaking a resistance,I give its CA and vice versa for a PA when it breaks supports. Now my job is to watch the exact movement of that particular stock and relate it with the options premium of a particular strike price at the same time which you will agree requires far greater concentration than any other form of trading. I have to decide whether the cmp of the premium is constituent with the current price of the stock and whether it is feasible to enter it with proper stop loss. I always give calls on CA at or near supports of that stock as my levels are on paper showing the same. Once, I decide that ok, its ok to enter, I give its CA call and the stop loss is generally such that it is lower than the next immediate support. Hence, when two supports break, it is better that the stop loss is taken which is quite possible as it results in stoppage of further loss. That is what the whole concept of stop loss is after all. One should be open to trade both ways on any given day and not sit in to trade with preconcieved notions. You will also agree that the premiums in stock options move at jet speed if one is playing AT THE MONEY OR DEEP IN THE MONEY. Only when one is playing deep OUT OF THE MONEY,does the premiums do not move at such a rapid pace.Now there are days when a stock or nifty does not move much,you will notice the options premiums also do not move much when playing the OUT OF MONEY calls. Hence, to overcome this, I usually play with strike prices very close to the cmp and in index options,I am always playing DEEP IN THE MONEY. Why ? The reason being the closer to strike price you are, the bigger the chances of premiums moving in a bigger range and also chances of making bigger money. Yes it also involves a much greater degree of danger and risk. And that is where my knowledge of stock levels come into play. I repeat playing ATM OR DEEP ITM involves greater risk and should not be attempted by novices or those who dont have levels knowledge.

A few examples for you as per todays trade. The first call I gave on Hindalco 130CA - When I know it will not break 125 very easily,I will be prepared to gives its CA nearer to that level. When it was at 126 after mkt open, its 130 CA was trading at 4.40, then it fell to 4.30. Simultanously, hindalco fell to 125.15 and started to go up, while its 130CA came up to 4.35. My call was typed ready by that time and as soon as I saw it sustaining 125, I sent the call. Now what happens is that since I have such a high number of clients, everybody endeavours to enter it at the same time.The number of options clients coming into the chat room do not even represent a fraction of the actual clients I have who are sitting at thier mobiles. They know since its call has come, it has been given at important supports. Some even hit blank market orders thus triggering the next offer price at a rapid pace which only results in the price of premiums moving fast. Now for a person who is slow at trading, there are only three choices left, either he waits for that cmp to come back or he does not trade or he picks it up at the higher price. I am not saying that everytime, the cmp will be the lowest price. It can go lower too, so the choice is upon each individual to take up the call as per his risk appetite. I simply cannot help on this. Only thing I will say is even if one gets it a bit higher, there is no problem as one might miss out on a bigger gain that might result ahead. As it is,a range used to be given earlier,so that can explain it all. But stop loss is to be maintained strictly at any cost.

Second example of SBI 2370CA today. SBI was not breaking 2325 since two days. And today too it came down to 2330. Thats when I saw the 2370CA at 63.70 and since my call was already typed, I just had to send it at 2330 and apparently 63.70 ended up being the days low too. Some people caught it at that price as shown in the shoutbox down below today, but most again compain, they never took it up.

Now to come to your individual questions .

1. Like I explained above, first fifteen minutes will show erratic movement in stock options premiums, hence, it is pretty impossible to guess which strike price will be active before market open. Now how can I keep sending sms of each individual stock whose strike prices have become active. If I do this who will watch my live intra day nifty chart and other live charts that run parallel to my trading software. And who will track any call if given. The only solution to this is that of the eight stocks I mentioned earlier, an options client needs to put two or three strike prices above and lower than the current market price of all eight stocks (CA & PA) to be prepared to recieve a call on them at any given time. This will help a lot in executing the trades a lot quicker as options traders who are quick witted and quick fingered have a better advantage. However, I do give the index options calls to be kept under scanner on a regular basis, that too after market opens if anyone will notice in the shoutbox.

2. You are suggesting to send an early sms stating for example to buy hindalco 130 CA at for example 5 if it goes above a certain level. Well, my friend , what will happen if hindalco does not sustain above that level, it will only result in you getting stuck up with the highest traded price then and surely the stop loss being taken. Options trading is not that easy as it looks. And above all, I never give any call which states to buy anything above a certain level. Only in chat, I may give levels, but never in my calls. A stock can easily break a resistance and fall back and likewise, it can break a support and bounce back too. Hence, a call involves a lot of gut feeling too along with knowlege of levels and anticipated future intra day market movements. Also, I am tracking so many stocks together and only when one reaches my level do I give its call. Now how to predict which stock will first reach my level out of the eight I track. Giving a call also involves a particular event based on news and the mood of global markets, the mood of FII and DII, open interest buildup etc etc. I myself do not decide which call I will be giving today,hence, its not possible to send an early sms.

3. Coming to the problem of range given earlier. When it was given earlier, there was more confusion as people always complained we got at higher range and some saying we missed it. Then there was calculation problem which always resulted in more arguments as to what price to be taken into account as index options calls always had a range of 10 rupees. Old options clients know that there used to be a range of 10 rupees in index options calls and hence, even if they do not get the trade at cmp, they know, its safe to buy it 5 rupees higher. For example, today the 4700ce call was given at 260 cmp. Next it jumped to 265 and then ursbuddy writes,he left it as it was 5 rupees higher. Now, 5 rupees is just 2 % on a call that costs 260 rupees. Yes I agree its a huge percentage if one is playing deep OTM, but when we are playing deep IN THE MONEY, one must be prepared for rapid movement in these calls as explained earlier. So to save that 5 rs, he lost out on profits of at least 30 rupees as we exited at 295 which later went up to 342. Yes this call could have hit stop loss too, but if one always fears of stop loss hitting, then one is sitting at the wrong place. I can have a few days of bad calls as am only human, but I can bounce back too. Some people say to give targets in advance. In index options calls, my usual first target is 20 points, then I raise my sl to cost. If a given target is given in advance, what if the market gets stronger like today,then we miss out on much bigger profits. So leave the targets to me as I will give exit as and when I see a certain resistance being reached or any weakness setting in. Also typing a range involved a greater loss of time for me while sending the call. For example, in index options calls, since I play deep in the money, there is rapid movement thus resulting in myself having to continuously rectifying and modifying the range and stop loss. This loss of time is harmful for us as split second decisions have to be taken by me while sending calls. I am finding calls based on cmp quicker for me to send, thus resulting in better chances of the clients catching it at cmp too.

While we are at the subject, allow me to also clarify the concept of two lots here. As I mentioned earlier, I have a varied class of traders as my clients which include brokerage houses too. I have clients who are trading one lot of index options to clients who even trade above 30 lots on one call. Now to cater to our clients in general, we always suggest to buy two lots as our calls carry two exit points. Now people have difference of opinion on this subject too. Allow me to explain it in an easier manner. An options trader who has big risk appetite may buy both lots at cmp given and exit first lot at first exit and second lot at last exit. An absolutely low risk taker may buy only one lot at cmp and exit fully from it at the first exit given. A relatively average risk taker should buy one lot at cmp, then wait for the price of that trade to come closer to the stop loss and buy the second lot. However, the same stop loss in all the above three cases shall stricly be mantained as my stop losses are given purely on a technical basis. Upon calculation, if second exit is higher than the first exit, it is calculated, however, if second exit is lower than the first exit, then the higher exit is always calculated since the final calculation is on one lot basis. People complain, when stop loss is hit on two lots, the loss is big. But they also forget , when both targets are met and second exit is higher, we do not calculate the profits on the first lot which they made. Hence, all this is done on a mutually beneficial basis. One must not forget, my stop loss hitting ratio is much less as compared to the number of calls given.

The whole idea for me to explain all this in such intricate detail is that I hope it will help all options clients to clear their doubts and at the same time would also request them not to upset the mood of the callers as we belong to the sensitive class of species who have immense pressure on our heads. Arguing over silly questions will only result in us callers taking the wrong decisions which will only eventually result in your own personal loss. Kindly refer your queries and problems to the various class of people we have designated on chat for your yahoo message problem or sms problem and help us to concentrate on our calls thus ensuring a much more beneficial relationship between us. Looking forward to a better and much more humongous relationship with one and all.

Thanks

I remain,
Yours Sincerely,

Sunil1
( OPTIONS MASTER )

IN REPLY TO

Hi Sunil,

I became premium member of TSR option on 21st October. A problem whcih has been consistently coming is getting in at right price. And since you have stopped giving ranges as well, the person dont know whether to get in if price has moved. I have already expressed this thing many time on the chat room. And I have also given you examples real time, when even entering 3 prices above given CMP couldnt be executed because price moved very very fast.

While i dont blame or say nething negative about way of giving calls. I have one small request:

1. As you mention in the active calls window keep 4700 CE and 5000 PE for watch etc. Please send sms for keeping a watch on other stocks you are looking at currently. You said u look at 8 stocks only but still the specific ones whcih are about to generate call according to you shud can be made known by sms, we cant watch all the strike prices and stocks all the time.

2. You can always send an sms before the actual call generation like: Buy Hindalco CA 130 at 5 if hindalco crosses 120.5. SL will be 3.9 etc.
This way we already know which one to take before market actually moves, we may have multiple calls in this manner out of which half may not actually get generated but we will be ready to get into right calls. I know there may be limitations to this but things can be worked out around this. I am sure today also, not many people were able to take advantage of your efforts and their money.

3. If nothing is possible range thing was better anyday to get the confidence. Simple thing is if point 2. can be implemented, i am sure execution of trades for many members will become easier.

Think of people who have made losses in your calls hitting SLs after entering above CMP given by you, you will realize it becomes increasingly difficult to remain confident of getting into trades if CMP is left behind after those losses.

Hope you will look into this a little more closely.

Cheers,
tj

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2009-07-30T00:20:00.001-07:00

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Naked Put-Another bullish strategy.

2009-07-04T22:34:00.000-07:00

Naked Put

Risk: high
Reward: limited

General Description
Entering a naked put position entails selling puts (most likely in-the-money).

The Thinking
This strategy is employed when you are very bullish. If the stock rallies above the strike price you keep the entire premium, but you have huge risk to the downside if the stock drops. You would then have to either buy the puts back at a much higher price or the stock would get “put” to you, and you would show an immediate loss.

Example
Let's say RNRL is trading @ 82.8 and you think a big rally is coming soon. You sell the 80 put options for 5.10.

Your max profit is the premium collected from selling the puts. As long as the stock closes above 80, you keep the entire premium. Simple as that. Your breakeven point is 74.9 – at that price the 80 puts will be worth 5.10 (80.0 – 74.9). Below 74.9 you will lose money at the same rate as if you owned the stock. You will then have to buy the puts at a much higher price or let the stock be “put” to you at 80/share and show an immediate loss. Between 74.9 and 80 you will have a profit but less than the max.

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Call Back Spread- Some Bullish strategy.

2009-07-04T22:31:00.000-07:00

Call Back Spread

Risk: low
Reward: potentially high

General Description
Entering a call back spread typically entails selling in-the-money calls and buying a greater number of out-of-the-money calls.

The Thinking
This strategy is employed when you are bullish on a volatile stock but want to lower your risk. You buy calls because you are bullish, but then you sell a lower strike price call to lower your risk. This offsets your loss if the stock moves lower. The drawback comes if the stock fails to move or rallies big. One of your long calls will be canceled out by your short call, so your profit potential is lowered.

Example
Let's say S KUMARS is trading @ 43.4 and you think it will rally. Buy (2) 45 calls for 1.05 and then sell (1) 40 call for 4.00.

If the stock closes below 40, all calls will expire worthless and you keep the extra premium. Your greatest loss occurs at 45. The long 45 calls will expire worthless and the 40 calls which you sold for 4 will need to be bought back at 5. Above 45, you will only make money on one of the long calls because the other one will be canceled out by your short call.

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Bear Put Spread- Bearish strategy

2009-06-28T02:05:00.000-07:00

Bear Put Spread

Risk: low
Reward: low

General Description
Entering a bear put spread typically entails buying in-the-money puts and selling out-of-the-money puts.

The Thinking
This strategy is employed when you are bearish but don't think the stock will crash. Essentially you are buying puts as you normally would in a long put play, but since you don't think the stock will crash, you sell out-of-the-money puts for a little extra cash.

Example
Let's say IFCI is trading at @ 56.9, and you buy the 60 puts for 3.5 (because you think the stock will move down) and then sell the 50 puts for 0.50 (because you don't think the stock will fall below this level). If the stock falls as you expect, you will make money on the 60 puts, and as long as the stock stays above 50, you keep the entire premium for selling the 50 puts. Your max profit occurs at 50 and below; this is where the long and short positions cancel each other out. Your max loss occurs above 60 – all puts will expire worthless and your loss will be the initial capital necessary to enter the position.

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Bear Call Spread- Another Bearish strategy

2009-06-28T02:02:00.000-07:00

Bear Call Spread

Risk: low
Reward: low

General Description
Entering a bear call spread position typically entails selling at-the-money calls and buying out-of-the-money calls.

The Thinking
This strategy is employed when you are generally bearish but want a little upside protection. Essentially you are selling naked calls but then protecting yourself by buying out-of-the-money calls just in case the stock rallies.

Example
Let's say Prism cement is trading @ 30.10. You are bearish and think the stock will fall, but want some upside protection just in case it doesn't. Sell the 30 calls (you are naked); then buy the 32 calls for some upside protection.

If the stock drops below 30 as you expect all calls (long and short) will expire worthless and you will profit because the premium collected from selling the 30 calls was greater than what you paid for the 32 calls. Your max loss occurs at 32 where the 30 calls will have to be bought back at a higher price than what you paid and 32 calls expire worthless. Above 32, the long and short calls will cancel each other out.

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Put Back Spread

2009-06-20T04:59:00.000-07:00

Put Back Spread

Risk: low
Reward: moderate

General Description
Entering a put back spread typically entails selling a put at a higher strike price and buying a greater number of puts at a lower strike price.

The Thinking
This strategy is employed when a big down moved is expected in a volatile stock but you want to lower your risk. You buy puts because you are bearish, but then you sell a higher strike price put to lower your risk. This lowers your max loss in place at a lower price. The drawback comes in the stock collapses. One of your long puts will be canceled out by your short put, so you profit potential is lowered.

Example
Let's say TTML is trading @ 30.06 and you think the stock will drop. Buy (2) 30 puts for 1.25 and then sell (1) 32.5 put for 2.70. Your net credit from initiating the trade is 0.20.

If the stock closes above 32.5, all puts will expire worthless and you keep the 20. Your greatest loss is 230 and occurs at 30. This is where the long 30 puts will expire worthless (a 250 loss) and your 32.5 put will be worth $20 (sold it for 2.7 and bought it back 2.5). Below 30 you will start getting some of your money back and below 27.7 your profit increases to a max when the stock drops to zero. But you will only make money on one of the long puts because the other one will be canceled out by your short put.

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Naked Calls- another bearish option strategy

2009-06-20T04:57:00.000-07:00

Naked Calls

Risk: high
Reward: limited

General Description
Entering a naked call position entails selling calls.

The Thinking
This strategy is employed when you are very bearish. If the stock closes below the strike price on expiration day, you keep the entire premium. But if the stock rallies, you have unlimited loss potential to the upside because by selling calls you are granting someone else the right to “call” the stock from you at a predetermined price (the strike price). So if the stock rallies and the option buyer exercises the call, you will be forced to buy the stock in the open market at a high price and then immediately turn around and sell the stock at the lower strike price. Obviously naked calls carry very high risk, and most traders will not be approved by their broker to enter such a position.

Example
Let's say UNITECH is trading @ 83.10. You sell the 90 calls for 1.35.

If the stock closes below 90 on expiration day you keep the entire premium and your max profit scenario will be realized. A stock price between 90.0 and 91.35 (90.0 + 1.35) will get you some, but not all of your money back. Above 91.35, your loss grows as the stock moves up.

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Long Butterfly- another neutral option strategy

2009-06-13T02:09:00.000-07:00

Long Butterfly

Risk: low
Reward: low

General Description
Entering a long butterfly entails buying 1 call at a lower strike price, selling 2 calls at a middle strike price, and buying 1 call at a higher strike price. The middle strike is midway between the higher and lower strikes. Essentially the long butterfly is a combination of the bull call spread and bear call spread.

The Thinking
You are not bullish or bearish and you feel fairly certain the stock will not move much from its current position. Because you think the stock will trade sideways you sell calls. If the stock doesn't move the calls would deteriorate in price and you would make money. But at this point you are naked and have huge exposure to the upside, so you buy the calls at the lower and higher strike prices. This limits your reward because you are locking in your max profit at a lower price, but it also limits your risk in case the stock rallies. This strategy is not recommended by those who trade small position sizes because commissions will kill you. This strategy is best used by those looking to make small amount of money multiplied by a large position size.

Example
Let's say IFCI is trading @ 65, and you buy (1) 60 call for 5.5 and (1) 70 call for 0.50, and you sell (2) 65 calls for 2.25 for a net debit of 1.5..

Max profit occurs when the stock closes at 65 – the short calls expire worthless; you keep the entire premium; the long 60 call gets sold for a for a small profit; and the long 70 call expires worthless. Your max loss is locked in place at the onset and will occur if the stock closes below 60 (all calls expire worthless) or above 70 (long and short calls will all cancel each other out).

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Short Strangle-ANOTHER NEUTRAL STRATEGY-

2009-06-13T02:06:00.000-07:00

Short Strangle

Risk: high
Reward: limited

General Description
Entering a short strangle entails selling out-of-the-money calls and puts.

The Thinking
You are not bullish or bearish and you feel fairly certain the stock will not move much from its current position. You sell calls and puts (essentially you are using a naked call and naked put position at the same time) and will keep most of the premium as long as the underlying issue trades sideways. But if the stock takes off in either direction your risk is huge because you have no protection.

Example
Let's say IFCI is trading @ 65, and you sell the 70 calls for 2.4 and sell the 60 puts for 2.6 for a total credit of 5.0. If the stock closes anywhere between 60 and 70, both legs of the strangle will expire worthless and you keep the premium collected from both. But if the stock closes below 55 (calls expires worthless and naked put incurs a loss) or above 75 (puts expire worthless but naked call incurs a loss) you will lose money and your loss gets grows for every tick beyond the 55-75 range the stock moves.

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Long Strangle-Another well traded option strategy.

2009-06-13T02:01:00.000-07:00

Long Strangle

Risk: medium
Reward: very high

General Description
Entering a long strangle entails buying out-of-the-money calls and puts.

The Thinking
You are not bullish or bearish but you do think a big move is coming soon. If the stock rallies huge, the puts will expire worthless, and you could profit from the calls. If the stock drops, the opposite will be true. But you need a big move; if the underlying stock just sits there, both the calls and puts will rapidly deteriorate in value.

Example
Let's say IFCI is trading @ 65 and you think a big move is coming. You buy the 70 calls for 3.9 and the 60 puts puts for 4.1 for a total debit of 8.0. If the stock rallies above above 78, the puts will expire worthless, but your calls will more than make up for it, and you'll profit on the entire trade. If the stock drops below 52, the calls will expire worthless, but your puts will more than make up for it, and you'll turn a profit. So, like the long straddle, you must get a big move in one direction or the other or else your calls and puts will deteriorate in value and you'll incur a loss on the trade..

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Short Straddle- Neutral Option strategy-INDIAN Context

2009-06-13T01:54:00.000-07:00

Short Straddle

Risk: high
Reward: medium

General Description
Entering a short straddle entails selling at-the-money calls and puts at the same strike price.

The Thinking
You are not bullish or bearish and you feel fairly certain the stock will not move much from its current position. You sell calls and puts and will keep most of the premium as long as the underlying issue trades sideways. But if the stock takes off in either direction your risk is huge because you have no protection.

Example
Let's say UNITECH is trading @ 80. You sell the 80 calls and puts for 6 each for a total cost of 12. If the stock closes at 80, both legs of the straddle will expire worthless and you keep the premium collected from both. To profit the stock must either close above 68 (80-12) or below 92 (80+12). But if the stock falls below 68 your naked put position will increase in value point for point as the stock falls, and if the stock rallies above 92 your naked call position will increase in value point for point as the stock rallies. So you need the stock to stay pretty close to home.

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The Condor-An option strategy.less risk.

2009-05-30T02:48:00.000-07:00

The Condor

Risk: low
Reward: low

General Description
The condor is a butterfly stretched over 4 strike prices instead of 3. Entering a condor entails selling calls at two consecutive strike prices (this forms the “body”) and then buying a call above and below the body. The condor is a combination of a bull call spread and a bear call spread.

The Thinking
You are not bullish or bearish and you feel fairly certain the stock will not move much from its current position. As with the butterfly, this strategy is not recommended by those who trade small position sizes because commissions will kill you. This strategy is best used by those looking to make small amount of money multiplied by a large position size.

Example
Let's say MRPL is trading @ 75, and you sell the 75 and 80 calls for 2.5 and 1.0, and you buy the 70 and 85 calls for 6.0 and 0.50 for net debit of 3.0.

If the stock closes at 75, the 75, 80 and 85 calls expire worthless and the 70 calls would be worth 5.0.The 5-point gain vs. the 3-point debit to initiate the trade gives you a profit of 2.0.

If the stock closes at 80, the 80 and 85 calls would expire worthless, and the 5 point loss in the short 75 call position would be canceled out with the 10 point gain of the 70 calls, so your net is still 5.0 and your profit is still 2.0. This is your max gain. It occurs anywhere between 75 and 80.

Your profit declines above 80 and below 75 with the max loss occurring above 85 and below 70, but your max loss is locked in as the initial cost of the trade.

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Long Straddle-Option explanation

2009-05-30T02:35:00.001-07:00

Long Straddle

Risk: medium
Reward: high

General Description
Entering a long straddle entails buying at-the-money calls and puts at the same strike price.

The Thinking
You are not bullish or bearish but you do think a big move is coming soon. If the stock rallies huge, the puts will expire worthless and you will profit from the calls. If the stock drops big, the opposite will be true. But you need a big move; if the underlying stock just sits there, both the calls and puts will rapidly deteriorate in value.

Example
Let's say SUZLON is trading @ 95. You buy the 95 calls and the 95 puts for 7 each for a total cost of 14. For you to make money, the stock must either drop below 81 (95-14) or rally above 109 (95+14). If the stock closes anywhere between 81 and 109 you will lose money with your max loss occurring at 95. So again, you need a big move one way or the other.

Want further help Join our google group and post your query

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Bull Put Spread-Another Important option strategy.

2009-05-23T20:40:00.000-07:00

Bull Put Spread

Risk: low
Reward: low

General Description
Entering a bull put spread position typically entails selling in-the-money puts and buying out-of-the-money puts.

The Thinking
This strategy is employed when you are bullish and like the idea of selling puts (rather than buying calls) but would also like a little downside protection just in case the underlying issue drops.

Example
Let's say KINGFISHER is trading @ 54.4 and you think it will rally. You like the idea of selling puts rather than buying calls so you sell the 55 puts for 2.55. This is the naked put strategy , but you want a little downside protection just in case the stock declines. You then buy the 50 puts for 0.85.

Your max profit is locked in place at the onset and occurs above 55. That's where all puts will expire worthless and your profit is the premium collected from your short put position minus the cost of the long puts. You max loss occurs at 50. This is where the long put position will expire worthless and the short put position will be worth 5. You will then either have to buy back your short puts at a greater price than what you paid, or the stock will be “put” to you (i.e. you will be forced to buy it) at 55.0. Below 55, your long and short positions cancel each other out.

--
Thanks
TSR
www.NIFTYVIEWS.com

Option Strategy-the collar strategy

2009-05-23T20:35:00.000-07:00

The Collar

Risk: limited
Reward: limited

General Description
The collar entails buying an out-of-the-money put and selling an out-of-the-money call of a stock you own and want to hold.

The Thinking
You own a stock and would like to hold it but would like to protect yourself to the downside. Essentially you are buying a put to protect yourself in case the stock drops, and you sell a call to help pay for the put. The put will protect you on the downside, but if the stock rallies you won't participate beyond the strike price of the call.

Example
Let's say you are the proud owner of 100 shares of ISPAT IND which is currently trading @ 18. You plan on holding the stock but think it may fall in the short term. Buy the 17.5 put for 0.60 and sell the (1) 20 call for 0.80 .

The call you sold pays for the put (i.e. the call pays for downside protection). If the stock drops below 17.5 you will lose, but at least your loss will be minimized by the put option. If the stock rallies, you will make money on the long stock position, but above 20 the long stock position will be canceled out by the short call position.

--
Thanks
TSR
www.NIFTYVIEWS.com

Bull Call Spread-Another Call strategy.

2009-05-15T09:05:00.000-07:00

Bull Call Spread

Risk: low
Reward: low

General Description
Entering a bull call spread position entails buying a call option (preferably in-the-money) and selling an out-of-the-money call option.

The Thinking
This strategy is employed when you are generally bullish but don't think the stock will rally too much. Essentially you are buying calls because you think the underlying issue will rally, but since you don't think it will rally too much, you sell an out-of-the-money call to lower your risk by locking in your max loss at a lower price. The margin occupied in the same is also less as compared to a naked call strategy.

Example
Let's say dish tv is trading @ 26.85. You are bullish and think the stock will rally a few points, but you don't think it will catapult higher. You buy the 25 (in-the-money) calls for 2.95 and sell the 30 (out-of-the-money) calls for 0.50.

Selling the calls reduces your risk because you max loss is locked in place at a lower price than if you had only bought the calls. In exchange for wanting lower risk, you forego whatever profits you would have enjoyed if the stock rallies above 30. Your max profit occurs at 30; above 30 the long and short call positions will cancel each other out. You max loss is locked in place at the onset. It is the amount you paid for the 25 calls minus the premium collected from selling the 30's.

Covered Calls -one call strategy

2009-05-15T08:56:00.000-07:00

Covered Calls

Risk: low
Reward: low

General Description
Buying covered calls typically entails selling out-of-the-money call options on stocks that you own.

The Thinking
This strategy is employed when you are the proud owner of a stock that you do not wish to sell but would like to earn “residual” income from. You sell out-of-the-money calls, and as long as the stock doesn't rally above the strike price, you keep the premium collected when you sold the calls and you remain in possession of the stock. Then you can do it again.

Example
You have been a long time stockholder of 15760 shares of IFCI and wish to hold for many more years. IFCI is currently trading at 26, and while you are bullish, you don't think the stock will rally too much in the next few weeks. Sell (1 LOT) 27.5 calls that expire next month for RS0.90 .

As long as the stock closes below 27.5 on expiration day, you keep the 0.90 and the stock. But if the stock rallies above 27.5, the call options will be in-the-money, and you will have a decision to make. You will need to either buy the calls back and therefore make less money or possibly incur a loss, or you can simply let the stock get “called” from you.

Remember, when you buy a call, you have the right to buy the stock at a given price. But when you sell a call, you are essentially granting someone else the right to buy your stock at a given price. There is very little risk involved because if the stock drops, you keep the premium, and you were planning on keeping the stock anyway. The possible drawback is, if the stock rallies beyond the strike price, you don't get to participate in the price appreciation.

HOPE IT CLEARS SOME DOUBTS.

Book of My guru-Jesse Livermore-How to trade in stocks-1940 published taken from a library in North calorina USA

2009-05-12T10:31:00.000-07:00

DOWNLOAD HERE

Long calls -TSR OPTION LEARNER STRATEGIES

2009-05-09T21:05:00.000-07:00

Risk: limited
Reward: potentially very high

General Description
Entering a long call position simply entails buying call options…preferably ones that are in-the-money.

The Thinking
If you are very bullish a stock, you can buy the stock or you can buy a call option which grants you many of the same benefits of owning the stock at a fraction of the cost. But what you gain in leverage you lose with time. Whereas a stock can be held indefinitely, options have an expiration date. So the stock doesn't just need to do what you think it will do, it needs to do it within a specified time frame.

Example
Let's say SUZLON is trading @ 55, and you think it will rally in the next few weeks. You could buy 1000 shares for 55,000, but instead you buy (10) 55 call options for 2.50 (2500) that expire next month.

If the stock rallies to 57.5, you will break even. For every point above 57.5, you will profit 1,000, so a huge rally could bring you a huge profit (remember we said you get the benefit of owning the stock without actually buying it). If the stock goes nowhere, the calls will expire worthless and you will lose your entire investment. Your max profit is theoretically unlimited because the stock can rally indefinitely, and your max loss is locked in place as your initial capital outlay.

--
Thanks
TSR
www.NIFTYVIEWS.com

Long Puts -TSR OPTION LEARNER STRATEGIES

2009-05-09T20:58:00.000-07:00

Risk: limited
Reward: very big

General Description
Entering a long put position simply entails buying put options…preferably ones that are in-the-money.

The Thinking
If you are very bearish a stock, you can short the stock or buy a put option which grants you the right to sell the stock at a predetermined fixed price. But what you gain in leverage you lose with time. Whereas a short stock position can theoretically be held indefinitely, options have an expiration date. So the stock doesn't just need to drop like you expect, it needs to do it within a specified period of time.

Example
Let's say RELIANCE is trading @ 1800, and you think it will suffer a big drop in the next few weeks. You could short 900 shares for 16,20,000, but instead you buy (300) 1800 put options for 90000 (30000) @100 premium that expire next month

If the stock drops to 1700, you will break even. For every point below 1700, you will profit Rs 900, so a huge collapse would bring you a huge profit (remember we said you get the benefit of being short without actually being short). If the stock closes above 1800, the puts will expire worthless, and you will lose your entire investment. A closing price between 1700 and 1800 will get you some, but not all of your money back. Your max profit occurs if the stock drops to 0; your max loss is locked in place as your initial capital outlay.

Will cover more basic strategies incoming days.

Have a likening for Options Join TSR OPTION SERVICES

REFER

http://www.niftyviews.com/

Join TSR GOOGLE GROUP

http://groups.google.com/group/STOCKRESEARCHER

Nifty Trading technical session -Ram &Gks

2009-02-22T02:50:00.000-08:00

22 Feb 09, 15:04
[×] [o] Taprico: surat can also do that
22 Feb 09, 15:04
[×] [o] Ashu: before start kindly tell how this session can be saved by broaders for future use, pls
22 Feb 09, 15:04
[×] [o] VinayaK: Thanks To both Taps and Surat
22 Feb 09, 15:04
[×] [o] GKS: The weighted averages of the stocks make up the Nifty index
22 Feb 09, 15:04
[×] [o] VinayaK: Ashu u will get the Link for the same
22 Feb 09, 15:05
[×] [o] GKS: The top 5 stocks in Nifty in terms of weighted average are
22 Feb 09, 15:05
[×] [o] GKS: RIL, ONGC, Airtel, NTPC and Relcom
22 Feb 09, 15:05
[×] [o] VinayaK: One question here
22 Feb 09, 15:05
[×] [o] GKS: which means, any big movements in these stocks shud move Nifty
22 Feb 09, 15:05
[×] [o] VinayaK: Do traders know that Dow jones is not a weighted avg index
22 Feb 09, 15:06
[×] [o] VinayaK: it is like price summation index
22 Feb 09, 15:06
[×] [o] VinayaK: Just an extra Bit of info.. from my side
22 Feb 09, 15:06
[×] [o] GKS: Ok Vini
22 Feb 09, 15:06
[×] [o] GKS: ICICI, Infosys, TCS, BHEL and SBI are the next 5 stocks.. i.e 6 to 10
22 Feb 09, 15:06
[×] [o] Raj+: What kind of index BSE then?
22 Feb 09, 15:06
[×] [o] GKS: Remember these 10 stocks, when u start trading in Nifty

22 Feb 09, 15:07
[×] [o] GKS: RIL by itself has 11.7% weightag in Nifty
22 Feb 09, 15:07
[×] [o] Chennaigopi: Thats cool ah..
22 Feb 09, 15:07
[×] [o] GKS: that is why, Nifty and RIL always move in the same direction
22 Feb 09, 15:07
[×] [o] VinayaK: Chennai Control posts
22 Feb 09, 15:07
[×] [o] VinayaK: No unwarranted posts plz..
22 Feb 09, 15:07
[×] [o] GKS: unless and otherwise u have a big movement by a collection of other stocks
22 Feb 09, 15:07
[×] [o] Chennaigopi: ok done!!
22 Feb 09, 15:08
[×] [o] GKS: Now, what are the indexes NSE allows you to trade
22 Feb 09, 15:08
[×] [o] GKS: Nifty is the primary one
22 Feb 09, 15:08
[×] [o] GKS: Mini Nifty is just a clone of Nifty
22 Feb 09, 15:08
[×] [o] GKS: Mini Nifty is for those who have less margin to trade
22 Feb 09, 15:08
[×] [o] GKS: CNX IT and CNX Bank are the other 2 indexes
Deleted
22 Feb 09, 15:09
[×] [o] GKS: There are few more indexes, but the liquidity is very low and not advisable
22 Feb 09, 15:09
[×] [o] prakash1: cnx full form
22 Feb 09, 15:09
[×] [o] GKS: Even CNX IT has a very low liquidity and hence not advisable for intra day trades
22 Feb 09, 15:10
[×] [o] GKS: that is why, we give calls mostly in Nifty and Bank Nifty

22 Feb 09, 15:10
[×] [o] VinayaK: CRISIL NSE Indices
22 Feb 09, 15:10
[×] [o] VinayaK: cnx full form
22 Feb 09, 15:10
[×] [o] GKS: Lot size of Nifty is 50. Lot size of Bank Nifty is 25. LOt Size of Mini Nifty is 20
22 Feb 09, 15:10
[×] [o] GKS: Lot size of Bank Nifty is increasing from next month
22 Feb 09, 15:11
[×] [o] GKS: Now, to trade 1 lot of Nifty, u need around 30-35K as margin
22 Feb 09, 15:11
[×] [o] GKS: The margin will be blocked in ur trading account, when u take position of 1 lot
22 Feb 09, 15:11
[×] [o] GKS: For Mini Nifty, u need amargin of around 15k
22 Feb 09, 15:12
[×] [o] gops: Is margin same for buying & selling ?
22 Feb 09, 15:12
[×] [o] GKS: When u cover ur position, the net profit or loss will be credited or debited
22 Feb 09, 15:12
[×] [o] GKS: yes, margin same for buying and selling
22 Feb 09, 15:12
[×] [o] VinayaK: gops yes
22 Feb 09, 15:12
[×] [o] Chennaigopi: For trading in bank nifty also we need to monitor those 5 stocks??

22 Feb 09, 15:12
[×] [o] GKS: the credit/debit will be based on closing price
22 Feb 09, 15:13
[×] [o] VinayaK: nrc all questions when asked for
22 Feb 09, 15:13
[×] [o] GKS: As ur position starts to lose, the MTM debit will keep increasing
22 Feb 09, 15:13
[×] [o] GKS: at the point when ur remaining margin is lower than the minimum margin, the position will be auto squared by the broker
22 Feb 09, 15:14
[×] [o] GKS: hence, it is required to pump in margin, if u want to keep a losing position
22 Feb 09, 15:14
[×] [o] GKS: Ok guys, any questions here..
Deleted
22 Feb 09, 15:14
[×] [o] Chennaigopi: what is the normal amont of MTM for a losing position
22 Feb 09, 15:14
[×] [o] mahesh: how can i play in sensex, my broker doesn't have bse derivatives
Deleted
Deleted
22 Feb 09, 15:14
[×] [o] GKS: there is no normal amount..
22 Feb 09, 15:14
[×] [o] nagarajan: that is called as MTM Margin. is it right sir.
22 Feb 09, 15:15
[×] [o] ekamber: what are the probable levels we can expect for next settlement
22 Feb 09, 15:15
[×] [o] Mr.Surat: Mark To Market MTM
22 Feb 09, 15:15
[×] [o] GKS: if u lose 100 points from ur starting price, MTM is 5000rs for 1 lot
22 Feb 09, 15:15
[×] [o] GKS: yes nagarajan
22 Feb 09, 15:15
[×] [o] VinayaK: Mahesh Bse has sensex futsIts nt that much active
22 Feb 09, 15:15
[×] [o] GKS: For those want to trade Nifty in cash, there is something called Niftybees

22 Feb 09, 15:15
[×] [o] mahesh: ok
22 Feb 09, 15:15
[×] [o] utpal: GKS MTM is computed on a daily bais??
22 Feb 09, 15:15
[×] [o] Chennaigopi: can i have an example..
22 Feb 09, 15:15
[×] [o] GKS: Niftybees is equivalent to cash trading
22 Feb 09, 15:16
[×] [o] utpal: basis??
22 Feb 09, 15:16
[×] [o] GKS: utpal, yes
22 Feb 09, 15:16
[×] [o] GKS: Lets take an example
22 Feb 09, 15:16
[×] [o] GKS: I take a Nifty buy at 2700
22 Feb 09, 15:16
[×] [o] GKS: 1 lot
22 Feb 09, 15:16
[×] [o] utpal: so. if my margin is less thhen the MTM position, i need to pump inmore money
22 Feb 09, 15:16
[×] [o] GKS: Nifty closes at 2650 for the day, and I havethe position open
22 Feb 09, 15:16
[×] [o] VinayaK: http://www.bseindia.com/deri/Futures/SensexFut.htm?L=2&id=hd2&Lid=1 Sensex futs link
22 Feb 09, 15:17
[×] [o] GKS: which means, 50 rs loss for the day.. and hence MTM will be 50*50 = 2500rs
22 Feb 09, 15:17
[×] [o] utpal: and if you have placed your shares as margin, the same will be sold by the broker to cover the difference
22 Feb 09, 15:17
[×] [o] gops: icicidirect also does'nt allow trsding in bse sensex ?
22 Feb 09, 15:17
[×] [o] GKS: 2500 will be debited from ur account on that day
22 Feb 09, 15:17
[×] [o] VinayaK: anything as collateral will be sold 2 recover the margin

22 Feb 09, 15:18
[×] [o] GKS: If u r trading whith shares as margin, shares will be sold to recover the MTM losses
22 Feb 09, 15:18
[×] [o] VinayaK: There is a limit when the collateral is sold though
22 Feb 09, 15:18
[×] [o] prakash1: yes utpal correct
22 Feb 09, 15:18
[×] [o] VinayaK: it wont be sold for minor Mtm
22 Feb 09, 15:18
[×] [o] Nikilesh: who decides weight age in index and why only reliance got more???
22 Feb 09, 15:18
[×] [o] Chennaigopi: so even if the market open at 2700 the next day morning also we will be in loss right?
22 Feb 09, 15:18
[×] [o] VinayaK: Gops ask question when asked
22 Feb 09, 15:18
[×] [o] GKS: Now.. as MTM losses pile up and ur remaining amount goes below minimum margin which is around 25000 for Nifty
22 Feb 09, 15:18
[×] [o] utpal: one quetion
22 Feb 09, 15:18
[×] [o] GKS: Broker will aquare of u position without asking u
22 Feb 09, 15:18
[×] [o] VinayaK: Nikhilesh it is based on Market cap.Related with free float of equity
22 Feb 09, 15:19
[×] [o] Nikilesh: k
22 Feb 09, 15:19
[×] [o] VinayaK: This is the reason why MMtc is nt an index based stock
22 Feb 09, 15:19
[×] [o] utpal: Vini - when we square up the position in profit, do we get the margin plus profit back??
22 Feb 09, 15:19
[×] [o] VinayaK: free float is less then a lakh share
22 Feb 09, 15:19
[×] [o] GKS: yes utpal
22 Feb 09, 15:19
[×] [o] VinayaK: Utpal yes

22 Feb 09, 15:19
[×] [o] utpal: thanks GKS and Vini
22 Feb 09, 15:20
[×] [o] Chennaigopi: MTM is only for losing position?
22 Feb 09, 15:20
[×] [o] GKS: Chennai, it is for profitable positions also
22 Feb 09, 15:20
[×] [o] ras: GKS..can u extend this example when nifty long position taken. closes loss in intraday but becomes profitable next day
22 Feb 09, 15:20
[×] [o] GKS: u get the MTM profits credited
22 Feb 09, 15:20
[×] [o] GKS: yes ras
22 Feb 09, 15:20
[×] [o] GKS: if Nifty closes at 2750
22 Feb 09, 15:20
[×] [o] dhiraj123: hi room
22 Feb 09, 15:20
[×] [o] GKS: u get 2500 credited at the end of the day
22 Feb 09, 15:20
[×] [o] VinayaK: Mtm means marked to market
22 Feb 09, 15:21
[×] [o] Chennaigopi: as MTM
22 Feb 09, 15:21
[×] [o] GKS: now.. next thing to know is broketage
22 Feb 09, 15:21
[×] [o] VinayaK: either it is + or - or 0
22 Feb 09, 15:21
[×] [o] GKS: brokerage depends on broker and trading qty
22 Feb 09, 15:21
[×] [o] VinayaK: No other option
22 Feb 09, 15:21
[×] [o] Chennaigopi: how about the profits?
22 Feb 09, 15:21
[×] [o] ras: Margin + prfts gets credits gopi
22 Feb 09, 15:21
[×] [o] GKS: chennai, refer above
22 Feb 09, 15:21
[×] [o] GKS: typically it is around 2 to 3 rs per lot per trade..
22 Feb 09, 15:21
[×] [o] lol: how many share in mini nifty
22 Feb 09, 15:22
[×] [o] dhiraj123: todays session was on technicalls na..
22 Feb 09, 15:22
[×] [o] GKS: most of the brokers give zero brokerage for covering trade, if covered on the same day
22 Feb 09, 15:22
[×] [o] dinu: mini nifty 20
22 Feb 09, 15:22
[×] [o] utpal: GKS, ICICI charges higher brokerage for options??
22 Feb 09, 15:22
[×] [o] Chennaigopi: covering trade?

22 Feb 09, 15:23
[×] [o] letsc57: hi gks & vini....when a margin gets blocked ?
22 Feb 09, 15:23
[×] [o] lol: which has highest weighted share in Mini nifty
22 Feb 09, 15:23
[×] [o] utpal: also other brokers charge about 50rs a lot?
22 Feb 09, 15:23
[×] [o] GKS: dhiraj123, we will cover some technical areas on the later part of the session
22 Feb 09, 15:23
[×] [o] gsk: are bank nifty options available
22 Feb 09, 15:23
[×] [o] GKS: letc, when a position is opened

22 Feb 09, 15:24
[×] [o] nrc: whats name less rs brokarage
22 Feb 09, 15:24
[×] [o] gsk: ol
22 Feb 09, 15:24
[×] [o] GKS: ok.. questions stop..  lets move on to next topic
22 Feb 09, 15:24
[×] [o] VinayaK: Nrc freezed for 15 mins
22 Feb 09, 15:24
[×] [o] VinayaK: GKS CONTINUE
22 Feb 09, 15:24
[×] [o] GKS: trading TSR nifty calls
22 Feb 09, 15:24
[×] [o] GKS: TSR gives calls on Nifty and Bank Nifty

22 Feb 09, 15:25
[×] [o] GKS: calls cud be buy or sell
22 Feb 09, 15:25
[×] [o] lol: movement is sane in mini nifty and nifty ?
22 Feb 09, 15:25
[×] [o] vijays: GKS, can u give few brokerage houses which give zero brokerage for NF trading
22 Feb 09, 15:26
[×] [o] GKS: any positional calls will be given along with a hedging position
22 Feb 09, 15:26
[×] [o] gsk: good afternoom i am late can i ask question
22 Feb 09, 15:26
[×] [o] GKS: we will look at hedging a little later
22 Feb 09, 15:27
[×] [o] GKS: we advice trading on 2 lots for our R2 calls
22 Feb 09, 15:27
[×] [o] VinayaK: Vijays freezed for 10 mins
22 Feb 09, 15:27
[×] [o] VinayaK: Think before u post questions unasked for
22 Feb 09, 15:27
[×] [o] GKS: R1 calls can be traded for higher qty, if u like to
22 Feb 09, 15:27
[×] [o] GKS: but R1 calls are not easy in this market
22 Feb 09, 15:28
[×] [o] GKS: R3 calls, trade half qty
22 Feb 09, 15:28
[×] [o] asarkar04: what is R1 R2?
Deleted
22 Feb 09, 15:28
[×] [o] VinayaK: Rank 1 rank 2
22 Feb 09, 15:28
[×] [o] GKS: R1 is TSR Ranking system based on probability
22 Feb 09, 15:28
[×] [o] siri: GKS, will u please explain what is R1 and R2 calls ?
22 Feb 09, 15:28
[×] [o] siri: ok thanks got it
22 Feb 09, 15:28
[×] [o] VinayaK: prs refer this http://stockresearcher.googlegroups.com/web/Payment.pdf
22 Feb 09, 15:28
[×] [o] VinayaK: and kindly post after 15 mins nw
22 Feb 09, 15:28
[×] [o] GKS: Once u see the call, first thing u shud look at is SL
22 Feb 09, 15:28
[×] [o] Sunil1: rank 1 , rank 2
22 Feb 09, 15:28
[×] [o] GKS: Have the SL set in the system
22 Feb 09, 15:29
[×] [o] GKS: we dont advice holding position even if SL hits for a second
22 Feb 09, 15:29
[×] [o] GKS: no point waiting after the SL is hit
22 Feb 09, 15:29
[×] [o] GKS: When Tgt1 hits, book 50%..
22 Feb 09, 15:29
[×] [o] VinayaK: PREMIUM CLIENTS NEW SYSTEM FOR CALLS ALL CALLS WILL BE RANKED WITH EVERY CALL WILL GET A RANK FOR EX. RANK 1. 90% PROBABILITY RANK 2. 75% PROBABILITY RANK 3. 50% PROBABILITY. SO TRADERS CAN CHOOSE ANY CALLS AND THE RANKING DENOTES THE IDEA OF THE CALL GENERATOR.TECHNICAL TRADES AS USUAL IS FOR GIVING YOU AN IDEA OF THE STOCK AND THE TARGETS WITH SL FOR THE STOCKS.TRADING IDEAS CAN BE TRADED IN CASH/FUTURES IF AVAILABLE AS SUBSCRIBERS WISH.
22 Feb 09, 15:29
[×] [o] VinayaK: Ranking system
22 Feb 09, 15:29
[×] [o] GKS: After Tgt1 hold remaining 50% with SL at cost
22 Feb 09, 15:30
[×] [o] GKS: After Tgt2, hold iit with SL at Tgt1, if u like to tke a risk
22 Feb 09, 15:30
[×] [o] Madhav: at the time of providing calls u indicate the rank
22 Feb 09, 15:30
[×] [o] GKS: dineshvit, see vini's post
22 Feb 09, 15:30
[×] [o] GKS: yes Madhav
22 Feb 09, 15:31
[×] [o] GKS: we calculate our performance based on 1 lot only
22 Feb 09, 15:31
[×] [o] GKS: it is upto traders capacity to take more positions
22 Feb 09, 15:31
[×] [o] VinayaK: Dinesh Ranking is done by Tsr
22 Feb 09, 15:31
[×] [o] sathish: so u advice to trade always with 2lots for nifty calls
22 Feb 09, 15:31
[×] [o] VinayaK: u will get calls with Ranks

22 Feb 09, 15:31
[×] [o] GKS: Some Dos and Donts
22 Feb 09, 15:31
[×] [o] VinayaK: can be in multiples of 2
22 Feb 09, 15:31
[×] [o] VinayaK: 2-4-20-40-100
22 Feb 09, 15:31
[×] [o] VinayaK: whatever
22 Feb 09, 15:31
[×] [o] goofers: Hi everybody
22 Feb 09, 15:31
[×] [o] prs: 1 lot means 100 shares in intraday
22 Feb 09, 15:32
[×] [o] GKS: never mix trading calls.. means.. dont trade TSR calls and hold with someone else SL
22 Feb 09, 15:32
[×] [o] dineshvit: how do u do that ,any logic
22 Feb 09, 15:32
[×] [o] GKS: or.. never trade someone else calls.. and hold with TSR tgts or SL
22 Feb 09, 15:32
[×] [o] VinayaK: Dinesh i have posted the logic
22 Feb 09, 15:32
[×] [o] GKS: Be clear on ur trade before u take the position
22 Feb 09, 15:32
[×] [o] GKS: Dont carryover the trade unless u get an update to do so
22 Feb 09, 15:33
[×] [o] GKS: Dont hold a position if SL hits
22 Feb 09, 15:33
[×] [o] GKS: Dont expect every trade to be in profit
22 Feb 09, 15:33
[×] [o] GKS: Expect and plan for SL hitting when u take a trade

22 Feb 09, 15:34
[×] [o] GKS: the goal shud always be for net profits at the end of the month
22 Feb 09, 15:34
[×] [o] GKS: when u start trading, have some funds for accomodating losing trades in the begining
22 Feb 09, 15:34
[×] [o] GKS: means,, if trade 1 lot, have 35 k for magin and 15 k for reserves
22 Feb 09, 15:35
[×] [o] GKS: and very importantly, control ur greed and fear when u r on a trade
22 Feb 09, 15:35
[×] [o] Nisha@Cmb: GKS....for Nifty trades where SL is triggered do we calculate loss for 2 trades for calculating monthly net profit or loss
22 Feb 09, 15:35
[×] [o] Ashu: while on the point, one query pls, suppose a trade is entered into, and just after that downtrend starts, should v wait till SL is hit or come out early (to save money)
22 Feb 09, 15:35
[×] [o] GKS: just follow the levels given and keep ur ears closed for what others say in the room
22 Feb 09, 15:36
[×] [o] GKS: Nisha, we calculate everything based on points for 1 lot
22 Feb 09, 15:36
[×] [o] Taprico: Always trade in equal lots nisha
22 Feb 09, 15:36
[×] [o] GKS: bioth for profit trades and loss trades
22 Feb 09, 15:36
[×] [o] Nisha@Cmb: not clear Taprico / GKS
22 Feb 09, 15:36
[×] [o] VinayaK: Nisha we use it for 1 lot
22 Feb 09, 15:36
[×] [o] VinayaK: so In case its 2 lots
22 Feb 09, 15:36
[×] [o] Taprico: the preformance report is prepared on 1 lot basis
22 Feb 09, 15:36
[×] [o] VinayaK: for actual profits u need2 multiply it by 1.5 not 2
22 Feb 09, 15:37
[×] [o] VinayaK: That will be the actual result of 2 lots
22 Feb 09, 15:37
[×] [o] lol: how calls given for nifty can traded for mini nifty............?
22 Feb 09, 15:37
[×] [o] GKS: important advice for everyone here
22 Feb 09, 15:37
[×] [o] Taprico: yes los
22 Feb 09, 15:37
[×] [o] Nisha@Cmb: Vini Sir..than what about a call where both tgts are meet..how we calculate the profit for monthly reporting
22 Feb 09, 15:37
[×] [o] GKS: it is based on my personal experience
22 Feb 09, 15:37
[×] [o] Ramkumar: Same lol - just do it for minifty
22 Feb 09, 15:38
[×] [o] magesh: hi vinayak
22 Feb 09, 15:38
[×] [o] VinayaK: Nisha thats the reason I said Multiply by 1.5*
22 Feb 09, 15:38
[×] [o] GKS: u will always see people coming here and saying attractive targets
22 Feb 09, 15:38
[×] [o] GKS: 2400 coming... 3400 coming etc
22 Feb 09, 15:38
[×] [o] VinayaK: its done empirically

22 Feb 09, 15:38
[×] [o] Nisha@Cmb: Vini Sir than for SL also we should multilply with 1.5
22 Feb 09, 15:38
[×] [o] VinayaK: Hello magesh
22 Feb 09, 15:38
[×] [o] VinayaK: Nisha end results The net at the end of the month should be Multiplied by 1.5
22 Feb 09, 15:39
[×] [o] GKS: beleive on one thing.. u cannot make easy money in markets
22 Feb 09, 15:39
[×] [o] VinayaK: net =profits-losses
22 Feb 09, 15:39
[×] [o] magesh: how much i need to invest for nifty calls
22 Feb 09, 15:39
[×] [o] Nisha@Cmb: now clear...thanks
22 Feb 09, 15:39
[×] [o] ras: Nisha. today we are not her to discuss how performace is calculated...
22 Feb 09, 15:39
[×] [o] VinayaK: welcome
22 Feb 09, 15:39
[×] [o] GKS: profits come slow.. and only if u stick to ur rules
22 Feb 09, 15:39
[×] [o] GKS: magesh, u need 1 lac for trading comfortably on 2 lots
22 Feb 09, 15:39
[×] [o] VinayaK: http://stockresearcher.googlegroups.com/web/Payment.pdf Magesh refer this
22 Feb 09, 15:39
[×] [o] Mr.Surat: vini plz let gks only continue plz
22 Feb 09, 15:39
[×] [o] Nisha@Cmb: ras....it is important to know...its part of trading
22 Feb 09, 15:42
[×] [o] Ramkumar: TSR NIFTY MASTER – TRADING CALLS – HOW WE DO IT?
22 Feb 09, 15:42
[×] [o] Ramkumar: FIRST SOME BASICS
22 Feb 09, 15:42
[×] [o] Ramkumar: There are lots of factors which affect a market as a whole: We can put them under two categories:
22 Feb 09, 15:43
[×] [o] Ramkumar: 1) Macro Economic Related Eg:- Global Market Performance, Global financial Policy decisions etc or anything not directly deriving out of our country but those which can affect the global economies directly or indirectly.
22 Feb 09, 15:43
[×] [o] Ramkumar: 2) Micro Economic Related Eg:- Internal News affecting the country, Both Financial as well as non Financial. Financial News:- Inflation, Real Economic Activity, Various Bank Rates decisions, Results Season etc
22 Feb 09, 15:43
[×] [o] Ramkumar: So, how does this affect TSR’s Nifty Trading strategy…..
22 Feb 09, 15:44
[×] [o] Ramkumar: Well as like any markets the sentiments do affect our markets as well and to an extent markets absorb these news and sometimes well in advance…
22 Feb 09, 15:44
[×] [o] VinayaK: lol 15 mins break
22 Feb 09, 15:44
[×] [o] Ramkumar: Like when inflation figures are announced we can see immediate reaction and recovery
22 Feb 09, 15:44
[×] [o] Ramkumar: I WILL TELL
22 Feb 09, 15:46
[×] [o] Ramkumar: So is trading so easy……………………..
22 Feb 09, 15:46
[×] [o] Ramkumar: YES TRADING IS EASY ...AS LONG AS U R DESCIPLINED AND DEADLY IF TOU PLAN TO MAKE SOME QUICK BUCKS.....
22 Feb 09, 15:47
[×] [o] Ramkumar: WELL IF TRADING WAS EASY THEN..........Then at times like this the government can ask people to trade instead of worrying about finding/keeping a Job…..
22 Feb 09, 15:47
[×] [o] Ramkumar: Well the traders are the best answer themselves…….. Im quite confident that almost all the traders will agree with me when I say – trading requires the quickest reaction possible, clear head on your shoulders, ability to withstand pressure…..
22 Feb 09, 15:47
[×] [o] Ramkumar: The final part is not necessary if you are with TSR Nifty Master……as we take in the pressure for you guys…… ?
22 Feb 09, 15:48
[×] [o] Ramkumar: TECHNIQUES AND TOOLS USED TO ARRIVE AT A CALL
22 Feb 09, 15:48
[×] [o] Ramkumar: GUYS ONE THING - THERE ARE LOTS OF WAYS IN WHICH TECHNICAL ANALYST ARRIVE AT CALLS....
22 Feb 09, 15:49
[×] [o] Ramkumar: BUT ALMOST EVERYONE HAS TO DEPEND ON A CHART

22 Feb 09, 15:50
[×] [o] Ramkumar: CHARTS,CHARTS.CHARTS :- We use different types of charts and every day is a new day for me …… every single day the charts make a pattern….. its like the charts telling us cacth me if you can and I sincerely hope we at TSR Nifty have done a good job…….
22 Feb 09, 15:50
[×] [o] mahesh: ram, when nifty depends on weitage, whether charts will be any use
22 Feb 09, 15:51
[×] [o] Ramkumar: Intra charts help us in assessing the pattern in Index movements plus added with it the volumes will give us an idea about impending moves.
22 Feb 09, 15:51
[×] [o] Ramkumar: When we generate the calls, most of the time we do wait for a clear signal , but sometimes we have to take the risk of assessing the movement little bit earlier as a sudden spurt or fall can happen in seconds.
22 Feb 09, 15:52
[×] [o] Ramkumar: SO IN ORDER TO CATCH TH EMOVMENT THE CALLS ARE GIVEN BEFORE THE CLEAR SIGNAL 
22 Feb 09, 15:52
[×] [o] Ramkumar: AS IF CLIENTS REMEBER WE GAVE A SELL CALL A RANK 3 CALL FOR BANK NIFTY AND WE WERE ABLE TO GET ADVANTAGE OF 40-50 POINTS IN BANK NIFTY BECASUE OF THAT
22 Feb 09, 15:53
[×] [o] Ramkumar: SO IF WE GIVE THE CALLS BEFORE A CLAER SIGNAL IS THERE IT IS USALLY A RANK 3 CALL

22 Feb 09, 15:53
[×] [o] chiku: why u not give positional call in nifty
22 Feb 09, 15:53
[×] [o] letsc57: Ram, if market is 2 much volatile, e.g., moving + - 50 here n there, then how can a chart be more acceptable??
22 Feb 09, 15:53
[×] [o] Ramkumar: At the rare moments when our sl’s hit this is the reason for it…..
22 Feb 09, 15:54
[×] [o] Ramkumar: ARRE WAIT LETSC UR ANSWER IS COMING
22 Feb 09, 15:54
[×] [o] Ramkumar: CHIKU WE DID GIVE ....BUT NOT ALWAYS
22 Feb 09, 15:54
[×] [o] Ramkumar: Other Tools Used :-
22 Feb 09, 15:54
[×] [o] chiku: some time your sl hit then target achived why
22 Feb 09, 15:54
[×] [o] gs: Ramji....when r1 calls recd ?
22 Feb 09, 15:55
[×] [o] GKS: chiku, we give positional calls at times, along with a hedge. The reason being, we believe on slow profits rather than taking risk and disappearing from markets
22 Feb 09, 15:55
[×] [o] Ramkumar: Relativity Stock Index (RSI) (Even though iam not a big fan but sometimes does help) AS it is confusing because of its ability to accept fall moves well inside
22 Feb 09, 15:55
[×] [o] aishwarya: ramkumar will this session be posted
22 Feb 09, 15:56
[×] [o] Ramkumar: gs r1 given when ...... there is a break out/break down and there is enough space till resisiatnce or supports
22 Feb 09, 15:56
[×] [o] Ramkumar: yes aishwarya
22 Feb 09, 15:56
[×] [o] Ramkumar: Slow Stoch ----Helps me assess over bought and over sold zones – Will be very confusing if you are not able to understand supports and resistance and market mood
22 Feb 09, 15:57
[×] [o] aishwarya: i couldnot attend the session from 3pm as i had to go out
22 Feb 09, 15:57
[×] [o] rup: how can we find supports and resis
22 Feb 09, 15:57
[×] [o] Ramkumar: i AM USING THIS VERY RECENTLY ONLY AS IM A STAUNCH BELIVER IN SUPPORT AND RESISTANCE AND EXPECIALLY WE ARE TRADING IN FUTURTES NOT SPOT AND FUTURES MOVEMTN TO A LARGE EXTENT IS DERIVED FROM TRADER ACTIVTY BASED ON THEIR SENTIMENTS AND ANALYSYS
22 Feb 09, 15:57
[×] [o] Ramkumar: RUP COMING
22 Feb 09, 15:58
[×] [o] Ramkumar: EMA (Exponential Moving Avg – Very Important as for chartist this is an Important tool to give calls at brek of support or resistance (can sometimes prove erroneous if EOD data of Index is flash or freak)
22 Feb 09, 15:58
[×] [o] chiku: is there any role of marketmaker(operator) in technical break out
22 Feb 09, 15:58
[×] [o] Taprico: Ram its been observed that the big falls or up moves come only when the slow stoch is at extreme end
22 Feb 09, 15:58
[×] [o] Ramkumar: YES CHIKU...... A LOT
22 Feb 09, 15:58
[×] [o] Ramkumar: YES TAPS - BUT NOT ALWAYS  ...THTS THE BIG PART
22 Feb 09, 15:59
[×] [o] Ramkumar: Strocks I Watch/Trach for Nifty Calls :- RIL- The King Kong of Markets , Infy, Ongc, SBIN, Bharti plus mostly also follow ICICI, TCS, NTPC, RCOM For Bank Nifty BIN is king, followed by ICICI, HDFC/Bank (plus a glance at PNB, Axis, Bank of India)….looking at them will give us an idea.
22 Feb 09, 15:59
[×] [o] Ramkumar: MAHESH THIS FOR U
22 Feb 09, 15:59
[×] [o] aishwarya: taps please post the link when uploading this session plese
22 Feb 09, 15:59
[×] [o] Ramkumar: SBIN IS KING FOR BANK NIFTY
22 Feb 09, 15:59
[×] [o] Taprico: Yes aish
22 Feb 09, 15:59
[×] [o] chiku: that is why we have to leave position at sl
22 Feb 09, 15:59
[×] [o] gs: Ramji......i.e. OPERATORS can spoil the chart patterns ?
22 Feb 09, 16:00
[×] [o] sm-asr: for intraday is 5min chart to be used
22 Feb 09, 16:00
[×] [o] Sunil1: operators are advanced chartists themselves
22 Feb 09, 16:00
[×] [o] Ramkumar: YES .....GS - THTS WHEN FALSE BREAKOUTS/DOWNS HAPPEN.... ....+
22 Feb 09, 16:00
[×] [o] Ramkumar: THEY ARE CALLED AS INSTITUITIONAL PLAYERS GS 
22 Feb 09, 16:00
[×] [o] Sunil1: operators are the ones who play the big game for big targets
22 Feb 09, 16:01
[×] [o] Ramkumar: SM ASR..... ITS UR COMFARTABILITY
22 Feb 09, 16:01
[×] [o] Ramkumar: Remember guys the stocks to an extent will help us with Spot only but once the stock is breaking out or cracking the fut will take its own course for sometime.
22 Feb 09, 16:01
[×] [o] Ramkumar: OK NOW QUIET FOR SOMETIME
22 Feb 09, 16:01
[×] [o] wealth: how can we track the operators
22 Feb 09, 16:01
[×] [o] Ramkumar: LET ME CONTINUE
22 Feb 09, 16:01
[×] [o] rup: can we pickout some where operators plays major part
22 Feb 09, 16:01
[×] [o] Ramkumar: RUP,WEALTH AFTER SESSION
22 Feb 09, 16:02
[×] [o] Ramkumar: THE SAID STOCKS ......ABOVE.....The stocks are good enough to assess the market overall as a whole……
22 Feb 09, 16:02
[×] [o] Ramkumar: BUT ONLY TO ASSESS....AS NIFTY FUT ONE CAN KEEP ON SELLING FOR POSTIONAL EVEN IF INTRADAY IS STRONG
22 Feb 09, 16:03
[×] [o] Ramkumar: How Can You Use These tools for your benefit
22 Feb 09, 16:03
[×] [o] Ramkumar: 1) First start of with EOD charts available at NSE site….. follow our supports levels given at http://niftyviews.com and try to understand the supports and resistance
22 Feb 09, 16:03
[×] [o] Ramkumar: 2) The Line charts in NSE will be easy to follow….. then try your hands at EOD charts using the candle sticks (learn candle sticks to understand the patterns) will help you understand the charts in a much easier way now.
22 Feb 09, 16:04
[×] [o] Ramkumar: YOU CAN DOWNLOAD HUBBINVESTOR FREE OF CHARGE AND VIEW CANDLE STICK CHARTS
22 Feb 09, 16:04
[×] [o] Ramkumar: EOD ONLY OR U CAN USE YAHOO
22 Feb 09, 16:04
[×] [o] Ramkumar: TO GET QUOTES AND USE VARIOUS OTHER S/W LIKE AMIBROKER ETC
22 Feb 09, 16:05
[×] [o] Ramkumar: BUT MY SUGGESTION TRY TO UNDERSTAND THE LINE CHARTS FIRST AND UNDERSTAND FROM OUR RESISTANCE
22 Feb 09, 16:05
[×] [o] Ramkumar: AND SUPPORTS BEFORE MOVING ON TO CANDLE STCISK
22 Feb 09, 16:05
[×] [o] Ramkumar: 3) Try to understand the supports of markets in Intraday …many steps can be taken such as pivot calculator, previous days market movement is the best one as far as iam concerned….. plus here little bit understanding of the EMA will be very helpful
22 Feb 09, 16:06
[×] [o] Ramkumar: 4) Well if you want to analyze and trade nifty on your own…then welcome to the jungle…….. nah just kidding….. try to learn supports of some biggies such as ril,infy, (even though not volatile as it used to be)sbin,bharti,ongc,ntpc plus one stock frm each sector and it will help to assess the mkts…. - WILL HELP IN GETTING THE MARKET TRAND ....I MEAN ONLY THE TREND
22 Feb 09, 16:06
[×] [o] Ramkumar: Supports and Resistance don’t work sometimes as we may have a false break out/break down….this is usually casued by huge sells near supports or resistance but are not sustained will be failed moves.
22 Feb 09, 16:07
[×] [o] Ramkumar: RUP - THIS FOR U
22 Feb 09, 16:07
[×] [o] Ramkumar: 6) One tip for the attendees …… first think of charts as another scaffolding ….think how scaffolds work ….. they are built on supports of each other ….think charts like that…..will be much easier……
22 Feb 09, 16:07
[×] [o] rup: ok, Ram
22 Feb 09, 16:08
[×] [o] Ramkumar: PLUS ONE IMPORTANT ADVICE….. NO CHARTS/SOFTWARE/TOOLS WILL GIVE YOU A CLEAR BUY SELL SIGNAL…… ALL OF THESE GIVE YOU ONLY AN INDICATION ON WHAT CAN OR COULD HAPPEN…. THE DAY ANYONE INVENTS SOMETHING LIKE THIS…… HE GOING TO BE THE RICHEST RICHEST RICHEST HUMAN BEING…… 
22 Feb 09, 16:08
[×] [o] GKS: couple of links for some simple charts..
22 Feb 09, 16:08
[×] [o] chiku: i alwys see ril sbi info bhel ntpc ongc for market support
22 Feb 09, 16:09
[×] [o] Ramkumar: FOR ME ....... I STRICKY FOLLOW SUPPORTS AND RESISTANCE AND WORKS OUT FOR ME MOST OF THE TIME
22 Feb 09, 16:14
[×] [o] VinayaK: ask whatever questions u have on Nifty for Ram and Gks
22 Feb 09, 16:14
[×] [o] GKS: http://in.finance.yahoo.com/q/ta?t=1d&s=%5ENSEI&l=on&z=l&q=c&p=e3&p=e3&p=e3&p=e3&p=e3&p=e13&p=e3&p=e3&p=e13&p=e3&p=e3&p=e13&p=e3&p=e13&p=e13&p=e3&p=e13&p=e34&p=e3&p=e13&p=e34&p=e3&p=e13&p=e34&p=e3&p=e13&p=e34&p=e3&p=e13&p=e34&p=e3&p=e13&p=e34&p=e200&a=ss&a=ss&a=ss&a=ss&a=ss&a=r14&c=
22 Feb 09, 16:14
[×] [o] dhiraj123: * only these ema GKS
22 Feb 09, 16:14
[×] [o] SHALIN: WEALTH  OPERATORS TRACK US
22 Feb 09, 16:14
[×] [o] meet_Rahul: the link works
22 Feb 09, 16:14
[×] [o] GKS: use this for intra day

Knowledge is nectar Option Trading Tips

2008-12-26T08:55:00.000-08:00

I. Set Your Goals And Objectives

II. Set Your Guidelines for Money Management

Do Not risk more than 5% (or less) of your risk capital on any trade.
Look for trades that have a 3:1 Reward/Risk.
Be prepared for every trade that you make.

III. Keep a Trading Journal to Record Every Trade

Before Placing A Trade: Record exit rules for cutting losses and taking profits,
entry point, reason for entering the trade support and resistance levels, general
market conditions, how you feel about the trade when you place it.
After Exiting A Trade: Record exit price, profit or loss amount, why you exited
the trade, why the trade worked when you win, why it did not work when you lose,
what you learned from the trade, how you felt when you exited the trade.

Perform a post-mortem analysis on my trades on a monthly, quarterly, and annual basis.
Analyze what worked and what did not work and write your conclusions in your
trading journal.

IV. Entry Rules
Write down the Market Direction, Stock Direction, Support, Resistance, Setups,
Entry Signals and Exit Strategy For Every Trade Before the Trade is Placed.

1. Setups (Signals that require confirmation.)

5, 10, 20 EMA Crossover
- Bullish when the 5 day EMA crosses above the 10 day and 20 day EMA and price is above 5 day EMA.
- Bearish when the 5 day EMA crosses below the 10 day and 20 day EMA and price is below 5 day EMA.
- Neutral when the 5 day EMA is between the 10 day and the 20 day EMA.

Candlestick Patterns -
- Bullish: Bullish Engulfing, Hammer, Morning Star
- Bearish: Bearish Engulfing, Shooting Star, Evening Star
- Continuation: Doji
Breakout of Resistance or Rising Trendline (New High)
or Breakdown of Support or Falling Trendline (New Low)
or Breakout/Breakdown from Consolidation Pattern (Triangle)

Failure of Candlestick, Support, Resistance, or Consolidation Patterns (includes double tops and bottoms).
for example close below prior day's low after bullish signal,
or close above prior day's high after bearish signal.

2. Entry Signals (Confirmation)

Above average volume and following day close in the same direction of the signal.

Combination of Multiple Patterns and Indicators.

Stock price bounces off Bollinger Band.

Bullish or Bearish Indicator Divergence (Stochastics, RSI, TSV, MoneyStream).

Choose Option Trading Strategy to Match Your Expectations

Bullish Strategies - For example: Buy Call, Bull Call Spread, Bull Put Spread, Diagonal Call Spread.

Bearish Strategies - For example: Buy Put, Bear Put Spread, Bear Call Spread, Diagonal Put Spread.

Neutral Strategies - For example: Iron Condor, Calendar Spread, Strangle etc

V. Exit Rules

Write these down in a Journal for Every Trade before that trade is placed.
(More important than entry rules).

For Losses (or failed trades)

Always have a Stop-Loss set based on the minimum risk of these rules:

Exit any trade that shows a loss of the predetermined risk level for that trade
(Initially $300)

Exit any trade when the stock price closes below (above) the lowest (highest) price
in the last week.

For Profits (or to cut losses shorter)

Exit any trade when the initial entry signal is reversed.

Exit any trade that has not moved in my favor within two weeks.

Exit any trade when price closes below support (bullish trade) or above
resistance (bearish trade)

Once a trade becomes profitable, adjust Stop-Loss in the direction of the trade.

Exit any trade when the stock closes below the Stop-Loss position.

Consider exiting 1/2 of your position when you have made a profit and the market pauses.

DAY TRADING FOR BEGINNERS

2008-11-26T22:44:00.000-08:00

Courtesy Laxman

Here I will guide you about the setups needed fort day trading.

First off all you need to arrange all the inventories before starting
day trading. I will describe below what you need to do first. All are
inconsideration that you want to be a dedicated online trader and need
to have a fool proof trading system. This setup will keep you in
trading as far as you want.

1. Open a Bank Account, Demat Account & Online Trading Account. You
can contact a broker firm to get these accounts opened.
Brokerage firms: Sharekhan, Geojit, Religare, Reliance Money, HDFC,
ICICIDirect, etc.

Funds from your bank will be transferred to the trading account. Then
shares can be brought using that money. The shares you brought will be
held on your demat account.
While buying a share: Bank account -> (cash) Trading Account ->
(shares) Demat Account
While selling a share: Demat Account (shares) -> Trading Account
(cash) -> Bank Account

The above transactions attracts certain commissions, known as
brokerages. Since, above the value of shares you will be charged some
small amount of money as brokerages. Also you will be charged some
taxes for these transactions and for the gain.

Brokerage: For the whole buy and sell value,
STT(Security Transaction Tax): Calculated on the Weighted Average
Price of the client for a particular days turnover,
Stamp Duty,
Service Tax,
etc.
This doesn't include income tax. You need to pay a particular % of
income tax for all your Gains only, Also you can deduct your losses
from the Gains for the calculation of income tax.

I will post a real life example of a transaction.

Share: UNITECH LTD
No of Shares brought: 200
Buy Price: 147.85
Total Amount: Rs: 29570
Brokerage: Rs: 15
Service Tax: Rs:1.86
NET COST OF BUY: Rs: 29586.86

Now you have a Trading Account ready to buy and sell shares.
For day traders the shares are brought and sold in the same day
itself.
So these shares will not actually go to your demat account.

Now we can discuss about other client setups.
Consider you are a dedicated trader who trades from your home or
office, you need to have the below hardwares and softwares.

1. Sufficient Trading Capital (Money).
3. A good Computer System.
4. A Power Back Up System.
5. A good Trading Terminal Software.
6. A very good Internet Connection.
7. A calm environment where other will not disturb you.

Sufficient Trading Capital
You should have sufficient fund for trading. Broker firms allow you to
trade more than the money you have for non-delivery trading(day
trading) or for 6 days trading with some brokers like Sharekhan. This
is known as leverage, its good you can buy more for less money but,
say for example if you have Rs:1000 the broker firm may allow you to
trade for 4000 and for even 10000 with some brokers. But high
leveraged trading is extremely dangerous and it will kill your trading
capital. So try to be less leverage as possible.

See the danger of leveraged trading by an example,
One have taken the leverage of 10 times his trading capital of 1000
and brought shares worth 10000.
Brought ABC 100 share for Rs:100
After 15 minutes the share price is not moving up but going down. So
he decided to sell the shares at the current price to limit the
losses.
He sold at: Rs:90, means he lost Rs:10 per share.
So, Total loss = 10*100 = 1000. Now Rs: 1000 will be deducted from his
trading account. Now his trading capital is 0, means he cannot trade
since there is no money left.

His Capital: 1000
Brought in leverage: 10000
Lost 1000
Now his Capital: 0
Like wise if you have gained and booked profit at 110 you will gain
1000. Means you have made 1000 from 1000 from a single trade. But a
single loss will kill a greater percentage of your capital and you
will get pain to even recover from the loss.

I know I have detailed roughly about leverage. But consider, many
traders left trading just because they traded with highly leveraged
money. So my advice is to not leverage or leverage very less but never
leverage more than 4 times(4000 from 1000). As a thumb rule don't
loose more than 1% to 2% of your money in any single trade and not
more than 10% at any time.

Computer System
These days all computers are highly powered so there is no need to
discuss much but, for a dedicated online trader I recommend the
following computer setups.
Processor: Dual Core min. 3.2 Ghz(1.6*2)
RAM: 1 GB or more if you are using Windows XP or higher versions.
Monitor: Preferably 2 monitors. 15inch minimum. One for Charts/Graphs
and the other for orders and Index tracking.
Browsers: Internet Explorer + Opera or FireFox

Power Back Up System
You must have a power back up system over your conventional 20 minute
UPS. Buy a UPS which gives atleast 1 hour back up or buy some other
kind of backup system. Even if the power fails you must be able to
trade for the next 1 hour atleast even if you have no power cuts in
your area.

Trading Terminal Software
As a day trader you should have a trading terminal rather than brokers
webpage trading. For this you can signup for brokers providing
software terminals to trade. Below are some brokers who provides
softwares.

Sharekhan: Provides Software(with technical analysis tools).
ICICIDirect: Donot provides software (So, not suitable for day
traders).
Religare: Provides Software.

[Optional]
If you can buy technical analysis softwares (like MetaStock,
Amibroker, etc) will be a good idea. Also you need to buy good real
time data feeds inorder to see charts and prices in MetaStock,
Amibroker,etc. Softwares provided by brokers doesn't need additional
data feeds. The advantage of these Technical Analysis softwares over
broker's trading terminal softwares are the higher ability to do
technical analysis.

Internet Connection
A proper internet connection is a must for every trader. A 250Kbps
internet connection will smooth out your trading. Also take a backup
connection from a different company inorder to continue trading when
the other connection fails of any reason.
Backup Connection is not expensive if you take a usb data card
wireless connection or mobile edge internet connection. All these are
available for as low as 400 per month or even less. You may also
activate the backup connection from your mobile service provider and
can use your mobile as modem to access internet through GPRS or EDGE.
All mobile service providers have this facility for less than 250 per
month. This will save you from a sudden internet blackout.

I wrote these all in a jiffy manner, so please correct if I have
missed something or did anything wrong. Will update and add more
advanced topics regarding day trading soon. But I need your feedback,
questions
THANK YOU

{T.S.R:3946} Re: TRADING FOR LIVING- ALEXANDER ELDER

2008-08-19T23:25:00.000-07:00

Download it from here..

http://rapidshare.com/files/138658374/Elder_Alexander_-_Trading_For_A_Living.pdf.html

Rumors in Financial Markets: Insights into Behavioral Finance - Mark Schindle

2008-08-14T03:38:00.000-07:00

Uploaded to: http://www.driveway.com/e0t1e8x1k8

Product Description http://www.amazon.com/Rumors-Financial-Markets-Insights-Behavioral/dp/0470031964

On the trading floor, all action is based on news, therefore rumors in financial markets are an everyday phenomenon. Rumors are the oldest mass medium in the world and their nature is still difficult to grasp. Scientifically, not much is known about rumors, especially in the financial markets, where their consequences can have real money consequences. Rumors in Financial Markets provides a fresh insight to the topic, combining the theory of Behavioral Finance with that of Experimental Finance--a new and innovative scientific method which observes real decision makers in a controlled, clearly structured environment. Using the results from surveys and experiments, the author argues that rumors in the context of financial markets are built on three cornerstones: Finance, Psychology and Sociology. The book provides insights into how rumors evolve, spread and are traded on and provides explanations as to why volatility rockets, strong price movements, herding behavior for example, occur for apparently no good reason.

From the Inside Flap
Conceptualizing the interplay of financial markets with psychological, interpersonal, organizational, and sociological impacts is key to successful behavioral finance analysis and research. Mark Schindler demonstrates the momentum and self dynamics of rumors among market participants and their social environment. - Prof. Dr. Roland W. Scholz, Institute for Environmental Decisions, Natural and Social Science Interface, ETH Zurich

Rumors are one of the most mystical aspects of finance. This book is an excellent work in finance that combines a nice survey of rumors as perceived by traders with legal aspects and scientific models. The book draws from a new approach in finance: experimental financial markets. This approach is ideal to study rumors since it is only in laboratory experiments that we have sufficient control about 'who knows what when'. Rumors in Financial Markets is a must-read for anyone who is trading on financial markets and it is also a rich source of insights for anyone who writes about others' trades. - Prof. Dr. Thorsten Hens, Swiss Banking Institut, University of Zurich

This book brilliantly exposes the role of rumors in the financial markets and in one sweep deals with an issue that ahs long been neglected: the significance of the source of news, and not just its contents. A truly relevant contribution to a better understanding of communication in the communication-intensive world of finance. - Alfons Cortes, Advisor to the Board, LGT Capital Management AG, Vaduz & Pfaffikon

Session On Intraday futures-23.06.08

2008-06-23T03:47:00.000-07:00

Hi Friends,
We are here to discuss Fno Intraday tardes and the benefit one can derive from trading futures on an Intraday basis.I will start with my basic content and will address any query at the latter half of the session.
I shall also provide some guidance on how to trade TSR calls to optimize your profits in futures trading.

-- lets start with basic stuffs
Futures Trading is for whom.
Futures or derivates trading is for traders basically to hedge there positions.Worldwide futures are used along with the options to hedge positions on stocks or commodities or any other tradeable unit.
Definition of futures

A futures contract is a type of derivative instrument, or financial contract, in which two parties agree to transact a set of financial instruments or physical commodities for future delivery at a particular price. If you buy a futures contract, you are basically agreeing to buy something that a seller has not yet produced for a set price.

I prefer future trades in Intraday as compared to cash segment basically for two reasons .
1 is liquidity I can gurantee that my clients can Buy/Sell at the same time without making big difference in prices.
2.Is exit opportunity is always there as there are no circuit filters of 5-10-20% in Fno stocks.
3. Traders can also hedge against cash segment at the same time can also book 50% profits using the cash segment.

Before i start going through the bookish definition of futures let me state that in India we use futures as contracts to speculate.You will find people in lakhs who will say futures is for gambling.
Lets go ahead with an example.
I had given a buy call on praj today .Buy above 179.50.The call was given at 176 odd levels with sl at 176 and target of 182 and 185.
Any Buys below this level is a gambling bet according to me.
Before i explain the strategy further i would like to differentiate between gambling and speculating.

gambling is a bet where there can be profits or losses along with the outcome of the bet.The extent of the loss is known and so are the extent of profits.Generally the probability of profit is less then 0.5
In speculating the probability is more then 0.5 and the extent of losses or profits are generally unlimited.You can earn unlimited amounts by doing right kind of speculating

As i was discussing with My Praj trade today the Buy above was initiated at 179.50.The Buy above triggered at 12.50 approx and made a high of 181.55 at 12.53.In just 3 mins the stock gave return of >1%.We did booked the trade at around 181.8 in another 2 hours.
Thats the way traders will have to trade in futs.There is no element of manual feeding of orders.If its a Buy above call Triggers should be used same goes with a sell below call or with sl.

One more important need here is that you either need to have a good online trading terminal.Something like sharekhan tiger terminal or Power India Bulls.Any other trader terminal which can execute orders in 1 secs will do.

One can take the services of offline broker if they are accessible in a moment of a second.We at TSR use the best sms servers so that sms can be sent in 5 secs anywhere in India provided the network connectivity is not a problem throughout the coverage area.

let me start with the margin needed to trade Fno intra calls of TSR.

Its a myth that futures can now be traded by only HNIS.With the fall in markets the fall in lot size and the margin amount is only debatable.There was a time which i had personally witnessed where an Ifci lot was worthed approx 8 lakhs rupees.A reliance cap lot was worthed 16 lakhs rupees.With the reduction in lot size the average lot is now worthed around 1.3-1.8 lakhs much below the lot size of 2 lakhs recommended by sebi.

We recommend that traders should have 2 lakhs of cash margin to trade all our calls and trade them without any margin related problems.I personally recommend that small traders should not carry any overnight positions with a BTST or a STBT tag as the volatility in the markets will give enough chance for traders to make intra profits

Coming back to the way to trade calls
I will tell an example .let me know the way to trade this call

Buy reliance capital futs cmp 1000 in 980-1000 range sl 968.
what should be the way to trade in futs if anyone uses this strategy to trade 2 lots

what should be the way to trade in futs if anyone uses this strategy to trade 1 lots

For small traders with 1 lot the way will be a bit different.If the price is at avg like 990 go ahead and buy 1 lot @ 990.
If not then the trader has to follow one strategy buy 50% of the qty at Buying range 1 in cash .If Buying range 2 comes then exit the cash holding and convert the position to futures

Keep strict sl and book 50% at targets 1

What i will suggest here is that the targets should be kept 0.1% below those of recommended target as the stock might give a downmove after just touching the T1.

Same goes with target 2.
For those traders who carry just 1 lot and are eager to book 50% profits I have a strategy which will work on an Intra basis .
You can short approx 50% in cash segment if you are holding just 1 lot in futs.

Now going ahead the best way to tackle the downfall as i have been suggesting since weeks now is that traders should keep strict sl and trade leveraged only on Intra basis

Before i move further can people suggest what are the myths or dangers in FNO trades
:
Leverage
Leverage
and leverage

But what i will say is that this is the biggest myth
Leverage is not a problem the problem remains with the point of Leverage in the wrong side.

Kindly let me know what you feel by leverage on the wrong side.
In intra it means wrong trades
the only way 2 reduce these losses is the sl.We cant enjoy the same outcome in a positional trade .In a positional trade we can never fight against the unsystematic or a systematic risk of stocks or stock markets .For example if anyone had a BTST of reliance capital bought @ 1045 yesterday with sl 1030 and targets of 1070-1100 whatever.He wouldn't had got a chance to exit the same.The same can never be said about intraday trading .

Hope you enjoyed the same
Vinayak

Vinayaks diary session taken on 11.05.08

2008-05-16T03:54:00.001-07:00

Hi friends,
Before i start with my session on Intraday trading techniques I will like to cover some Known facts and unknown facts about day trading.

Day trading as the perception goes is not gambling or just speculating.
The truth is that day trading if done with technicals and without emotions give profits in majority of trades.Majority for me is anything above 65% in the current market scenario.If one sees %age success it will be less but when when compares the correct trades w.r.t the ones that hits sl then its 65:35 which is a fair ratio.
This is not a bookish knowledge or something that is known by everyone.80% traders in day trading In India loose money. What i will share from here on might not make you a profitable one if you are loosing on day trades but will specifically make your losses next t nil.
On the contrary if you belong to the other 20% of the traders who are maing money you can use this advice to make more money.

I start with the discussion herewith.I will be taking query at the end of the session and will try and solve each one of them.

day trading for whom: You can never be a good trader if you have some other preoccupation in trading time.Intra trades require if not 100% 80% of your attention should be on your trading terminal.
On the second stance if you are not trading online.Your broker should be well equipped with your trading techniques like he should know the basic trading technique of sl ,targets and trailing sl.Its his duty to constantly update the same to you.If he is not doing the same its time you should change your broker.
before i start with my trading techniques I will have some views to share with fellow traders.what should be the adequate capital for an Intraday trader.I follow a rule quite strictly.

Example
Mr Hiren padia total asset in capital markets is 10 lakhs .According to me his trading capital for day trades should never be more then 2 lakhs.20% by the thumb rule.

2 lakhs rupees *5 times day trading exposure provided by any broker

We will only use 2.5*Times of the same

5 lakhs is the overall intraday trading limit at any point of time

5 trades of 1 lakh each =5 lakhs

1 lakh rs trade max sl 1-1.5% =1000-1500 rs max loss in any given trade

Now going ahead with the Intraday techniques .I personally believe that a Sl is much more important then the targets for an Intraday trade.You should define the maximum loss you are ready to bear.
I have personally seen the markets for years now.One important qoute i will like to say is " Markets remain forever only the traders change.
In intra day trades is you dont keep sl.There is a high probability that you might end up making good amount of losses.Example the sl of 1% gets extended to 10% in No time in day trades.Moreover the fact remains that with Sl you can restrict your losses.

Now how to go ahead with day trades

first rule which i follow: Dont be happy with your performance at the end of a single day.its foolishness to be happy after making 20-30k at Eod any given day.
See your performance at the end of 1 month for day trades.If you are in profits trade the same way.If not trade your strategy instead of shares and change your approach.

How to make sure that in day trading you make utmost money from the trade.This is the second most important part after the sl part.
basics any Intra trade from TSR or any other professional research group will have

Ex Buy tanla above 281 sl 277 target 285-289.
If the call is a Buy above or sell below sl and targets might be updated as soon as the call is activated.

Suppose Tanla crosses 281.From my model folio 1 lakh on each stock i Buy ( Not invest )400 shares of tanla solutions

Now price hits target 1 .Automatically 50% of the stock should be booked at 284.90.

My trailing sl ( new term used now ) will be above 281 for the rest of the positions

I keep the sl at 281.25 ( assuming 25 paisa as the cost of brokerage and the feed for my hungry government)

Now suppose the stock hits target 2.

Million $ question what will be done now.should we book entire profits at target 2.Or should be hold for some more gains.

Its greed that comes in picture my friend which is much above the technical targets or sl.

The best strategy i advice people to follow and i have been personally following is book 25% of the original shares here and keep sl above cost for the remaining 25%

The remaining 25% of the profits can be booked as and when you wish.For my personal trades if sl is not hit i prefer booking the remaining 25% at 3.00pm

People who dont follow sl,make one thing for sure.They dig there own trades and make it sure that they wont ever be able to make money in markets.

I will like to discuss the final aspect of my todays class.Trading calls using any service provider.Dont be a compulsive trader.
We at Team stockresearchers make it sure that at the end of the month if a client follows all our trades he will be in decent profits at the end of the month.Now one more important point here is that if you make money through day trades.Never increase the volume of your trading limit .Instead better go ahead and use this money for other productive purpose like Investing in long term and for other asset classes.

Investment Strategy-Portfolio Rebalancing

2008-04-24T08:32:00.000-07:00

nvestment Strategy-Portfolio Rebalancing

Why is it important and how you can do it?

Over the course of the year, the market value of each security within your portfolio earned a different return, resulting in a change in the allocation pie. This might change the investor's risk profile. While in the short term this may not have an adverse impact, such changes in risk profiles can have a far-reaching impact in the longer run. Portfolio rebalancing is a strategy that allows individuals to keep their risk level in check and minimize risk.

What Is Rebalancing?

Rebalancing is the process of buying and selling portions of your portfolio in order to set the weight of each asset class back to its original state. In addition, if an investor's investment strategy or tolerance for risk has changed, he or she can use rebalancing to readjust the weightings of each security or asset class in the portfolio to fulfill a newly devised asset allocation.

Assume an investor's portfolio worth Rs 1,00,000 is invested in equity funds (40%), Bond Funds (40%) and liquid funds (20%). In other words, Rs 40,000 will be invested in equity funds, Rs 40,000 will be invested in bond funds and Rs 20,000 will be invested in liquid funds. Let's assume that in Year 1, equity funds deliver 20% return, bond funds loose 2% and liquid funds give a modest 4% return. His portfolio, at the end of the year, will look like this:

Year 1	Returns	Opening	Closing
Equity Funds	20%	40000	48000
Bond Funds	-2%	40000	39200
Liquid Funds	4%	20000	20800
Total		100000	108000

Overall, the portfolio has returned 8%, but that's more due to the equities.

In year 2, assume the rise in the equity markets gets over and markets fall. So assume equity funds return -10%, bond funds on the other hand rebound and return 9%, while liquid funds continue with 4%.

Now assume two scenarios, viz. one where the above investor switches back to his original asset allocation, and the other where the investor doesn't reallocate his assets as per his original allocation and ignores the change.

		Rebalance portfolio		Ignored portfolio
YEAR 2	Returns	Opening	Closing	Opening	Closing
Equity Fund	-10%	43200	38880	48000	43200
Bond Funds	9%	43200	47088	39200	42728
Liquid Funds	4%	21600	22464	20800	21632
Total			108432		107560

As per the above example, while the rebalanced portfolio appreciates to Rs 1,08,432, the value of the ignored portfolio actually falls to Rs 1,07,560. As can be seen, the ignored portfolio got swayed by the equity return in Year 1 and therefore chose not to go back on the original asset allocation, not knowing that equities as an asset class can be quite volatile in the short run. A fall drop in the equities in Year 2 was enough to result in the ignored portfolio to under-perform the rebalanced portfolio.

Rebalancing strategy is, therefore, the optimal strategy.

Benefits of portfolio rebalancing

Disciplined investing

Rebalancing is a vital part of investment policy - there can be no asset allocation target without the discipline to preserve that target.

Reduces risk

A plan may incur higher risk if no rebalancing policy exists. This is true particularly for equity allocations, which can rapidly rise in a bull market. For instance, portfolio rebalancing ensures that in rising equity markets, the asset allocation doesn't get skewed towards equities and the portfolio correctly reflects the investor's risk profile. It also ensures that the portfolio is adequately diversified.

Buy low, sell high Rebalancing is a mechanism for sensible timing - the process naturally buys low and sells high. This strategy ensures that the portfolio returns are enhanced. A clear rebalancing policy avoids the risks of ad-hoc and costly portfolio revisions.

Balanced Funds - a better way to portfolio rebalancing

One way to rebalance the portfolio is to do it ourselves. In other words, investments can be made in equity and debt funds separately and then adequate rebalancing can be done depending on how the equity and debt markets perform.

A simple way to ensure portfolio rebalancing is to invest in Balanced Funds. Here, the fund manager does the rebalancing and not the investor. Usually, all balanced funds invest around 60-70% in equity markets and the rest in debt and money market instruments. They state their asset allocation, i.e. their allocation towards equity and debt instruments, in their offer documents for investors to refer to. Further, they are mandated by Sebi to stick by their stated allocation.

So when equity markets keep rising consistently, Balanced Funds are mandated to book profits and bring their equity allocation back to their stated levels. This way, balanced funds carry a low downside risk as when equity markets fall, balanced funds take a lesser hit than equity funds.

Interactive chat session-Explanation of beta and one stock pick

2008-04-20T02:50:00.000-07:00


If you have a problem viewing it here click on this link
Read here

19 Apr 08, 23:59
awesh: http://docs.google.com/View?docid=dkh7xb6_4dff7hx 
19 Apr 08, 23:59
MiTs: YES SATMAN.. FOR FREE TRIAL U CAN JOIN OUR SMS GUPSHUP 

Vinayak: its 2:00 
20 Apr 08, 14:02
ashu2025: HEllo Varun, Mits 

Varun Jain: Friends.......... WE HAHVE CALLED FOR THIS SESSION FOR ADVICING ON HOW TO BUILD A SOUND PORTFOLIO 

20 Apr 08, 14:02
Varun Jain: THE BIGGEST MYTH OF PORTFOLIO BUILDING IS THAT ONE NEEDS TO THINK ABOUT IT ONLY WHEN WE HV ATLEAST 5-6 LAKHS...... 


Varun Jain: PORTFOLIO MANAGEMENT STARTS THE DAY ONE ENTERS SOCK MARKET 

Varun Jain: ALSO.one shud clearly separate a trading portfolio from a long term portfolio.....THEY SHUD NEVER BE MIXED.....NEVER 
20 Apr 08, 14:04
ashu2025: guys listen to varun pls 


Varun Jain: INFACT I WOULD SUGGEST KEEP SEPARATE DEMAT A/Cs for both 

ANJI: WHO ARE THE THE ONLINE CONSULTANTS IN INTERACTIVE PROGRAM 
  

MiTs: http://premiumcalls.blogspot.com/ Delivery calls performance sheet of past 3 months have been uploaded.Kindly use Mozilla 



Vinayak: Guys kindly be in listen mode now 
20 Apr 08, 14:07
Vinayak: varun carry 


Vinayak: I will take care of others 
20 Apr 08, 14:07
prakash: hi vinayak varun 
20 Apr 08, 14:07
deep: whats the first thing one shold look to buy a stock for portfolio 
20 Apr 08, 14:07


Varun Jain: the mix of trading folio and , term folio shoudl depend upon a persons risk taking capacity 
20 Apr 08, 14:08


Varun Jain: It is generally adviced that out of your total exposure to equities ....25% shud be for trading and 75% for long term investments 
20 Apr 08, 14:09
Vinayak: the session is important for your survival in the markets.And make profits 
20 Apr 08, 14:10




Varun Jain: However......... for some one who is below 35....... and has a sufficient risk taking capacity...That means his primary source of income is secured and not related to stock market.........that person can even have a trading folio of 50%... but not more 
20 Apr 08, 14:11
dhirajsud: varun carry on 
20 Apr 08, 14:11
ANJI: WHAT IS THE DEFINITION OF PORTFOLIO IN YOUR VIEW WITH IN 10 WORDS 
20 Apr 08, 14:12
Varun Jain: A an ideal portfolio in stock amrket is A WELL DIVERSIFIED BASKET OF STOCKS WHICH BELONG TO AS VARIED SECTORS AS POSSIB LE AND WITH LEAST INTERLINKAGES....SO THAT ONE STOCK IS INSULATED FORM CRASH IN ANOTHER 
20 Apr 08, 14:12
gauravjm: I feel no one should message now for 30mins lets listen to Mr.varun Jain then we can ask abt our portfolio as lets not disturb him now 
20 Apr 08, 14:12
Vinayak: anji post after 30 minutes 
20 Apr 08, 14:13
aishwarya: anji please cut caps&keep ur quries for later the flow is disterbed 
20 Apr 08, 14:13
nsevsbse: hi all 
20 Apr 08, 14:14
dhirajsud: ANJI we r leaving this as u 
20 Apr 08, 14:14
aishwarya: varun please go ahead 
20 Apr 08, 14:14
nsevsbse: hi varunji, 
20 Apr 08, 14:14
Varun Jain: A PERSON WHOSE RISK TAKING CAPACITY IS LIMITED....THE BETA OF HIS PORTFOLIO SHOULD NEVER BE MROE THAN 1-1.2.....THAT MEANS..... IT SHOULD MOV IN TANDEM WITH THE INDEX 
20 Apr 08, 14:14
nsevsbse: varunji wht abt ispatind 
20 Apr 08, 14:15
Vinayak: nse post after 30 minutes 
20 Apr 08, 14:15
ashu2025: great going Varun 
20 Apr 08, 14:17
Varun Jain: That means ...........if there are some risky stocks in a portfolio like century textile ...then thre should be stocks with beta less than 1 to hedge against these risky stocks......like HLL or ITC..... 
20 Apr 08, 14:18
Varun Jain: For example...........during the recent crash...... if ur folio wud hv consisted of all stocks with high beta...... then there are chances that u wud hv been wiped out 
20 Apr 08, 14:18
Varun Jain: Century terxtile came down from 1200 odd levels to 650 
20 Apr 08, 14:18
Varun Jain: that is a 45% correction 
20 Apr 08, 14:19
Varun Jain: And have a look at the HLLs and ITCs 
20 Apr 08, 14:19
MiTs: can i ask u something in between varun ? related to BETA? 
20 Apr 08, 14:19
Varun Jain: Yes mits 
20 Apr 08, 14:20
hirentherock: yes mits beta ask 
20 Apr 08, 14:20
Varun Jain: So.now we have discussed abut 2 hedges....one against sectors......... and one against stocks 
20 Apr 08, 14:21
MiTs: varun BETA is something very imp for any investment.. can u give formula to find beta or can u explain wht is beta exactly.. as many ppl here dont know wht is it exactly..!!! where can they find BETA of any security and how can they find portfolio beta they have.. 
20 Apr 08, 14:21
Vinayak: beta of any stock listed in nse is given in its quote in nseindia.com 
20 Apr 08, 14:22
Varun Jain: Mits..........calculating beta can be a bit tricky........ but they are easily available on sites.... like bloomberg.com 
20 Apr 08, 14:22
Vinayak: http://www.nseindia.com/ 
20 Apr 08, 14:23
MiTs: thank u 
20 Apr 08, 14:23
Varun Jain: Is there anyone here who doesnt know wats beta? kindly ask if you dont understand anything 
20 Apr 08, 14:23
truemoon: hi mits wat is beta 
20 Apr 08, 14:23
Vinayak: ask now 
20 Apr 08, 14:23
Ali: Vinayak I just checked for RIL on the nseindia website, I could not find it, please let me know where 
20 Apr 08, 14:23
sandya: s want to know abt beta 
20 Apr 08, 14:23
gauravjm: sorry varun i have no idea abt beta 
20 Apr 08, 14:24
Shilpa: yeah, Vini...I also cudnt found it on nseindia 
20 Apr 08, 14:24
truemoon: hi vini,nits,hiren me too no idea qbout beta 
20 Apr 08, 14:24
ashu2025: so varun, beta more then 1 is for those scrips which move faster then the index? 
20 Apr 08, 14:24
Vinayak: ali let me see. 
20 Apr 08, 14:24
SHALIN: wassup 
20 Apr 08, 14:24
Vinayak: I used 2 find it from there earlier.Let me check 
20 Apr 08, 14:25
aishwarya: beta is the factor related to price movement&index movement 
20 Apr 08, 14:25
deep: what is dis beta?????? 
20 Apr 08, 14:25
SHALIN: aaj varun also out here.hmm 
20 Apr 08, 14:25
deep: volatility of a stock against index 
20 Apr 08, 14:25
Ali: Varun can you suggest some scrips with more than 1 beta 
20 Apr 08, 14:25
Varun Jain: In easy language... BETA IS THE MEASURE OF HOW VOLATILE A STOCK IS AS COMPARED TO GENERAL MARKET..... FOR EG............ IF A MARKET GOES UP BY 10% and A STOCK GOES UP BY 12% THEN THE BETA OF THE STOCK IS 1.2 
20 Apr 08, 14:25
SHALIN: BEAT D DAMN BETA....NJOY D PROFITS N RELAX.! 
20 Apr 08, 14:26
aishwarya: shalin VARUN JAIN is the BOSS of this session 
20 Apr 08, 14:26
SHALIN: ohk... 
20 Apr 08, 14:26
truemoon: varun understood,,,go ahead,,, 
20 Apr 08, 14:26
Ali: Shalin let varun finish it 
20 Apr 08, 14:26
hirentherock: so does it mean beta keeps changing suppose if stock like orchid showed great movments...if we compare its beta of last month to today it has changed? 
20 Apr 08, 14:26
truemoon: shalin pl,,,,,, 
20 Apr 08, 14:27
truemoon: is there any beta ratings for each and every stocks... 
20 Apr 08, 14:27
aishwarya: hiren it is generally based on the HISTORIC movement of the stock 
20 Apr 08, 14:28
aishwarya: not on daily basis 
20 Apr 08, 14:28
Shilpa: ok....and if stock goes dn...then its Beta will be in negative or in 0........? 
20 Apr 08, 14:28
Varun Jain: Hiren.....that depends on what data the beta is calculated on......... SO IF U CALCULATED BETA OF ORCHID ON BASIS OF 2 YEAR MOVEMENTS...THEN HUGE MOVEMENTS FOR JUST 1 MONTH WONT HV THT MUCH IMPACT ON BETA...ONLY IF IT CONTINUES TO BE VOLAITLE FOR LONG PERIOD THEN ONLY BETA WUD CHANGE 
20 Apr 08, 14:28
Vinayak: Guys who want the anser for bets 
20 Apr 08, 14:28
Vinayak: answer* 
20 Apr 08, 14:29
ANJI: thank u aishwarya 
20 Apr 08, 14:29
Vinayak: Earlier it used to be published in nseindia website 
20 Apr 08, 14:29
Vinayak: But now its not 
20 Apr 08, 14:29
Vinayak: Don't know if it is available online or not, but the Business standard newspaper (Saturday) edition has the beta values of stocks. If you're doing an Equity research rep. for an academic purpose, then I suggest that you go to NSE India's website, download the closing prices of the NIFTY and the SCRIP for at least 2 years and calculate beta using the equation given in the text books covariance of Scrip with Nifty/variance of nifty 
20 Apr 08, 14:29
Vinayak: So Buy a business standard saturday edition 
20 Apr 08, 14:29
Vinayak:  
20 Apr 08, 14:30
Varun Jain: Shilpa......if stock moves against market.....it goes down when mkt goes up.or vice versa .then beta is negative 
20 Apr 08, 14:30
aishwarya: dalal streetpublishes it in all its issuesaswell VINAYAK 
20 Apr 08, 14:30
Vinayak: K aish 
20 Apr 08, 14:30
Bramesh: Jai Jinendra varun bhai 
20 Apr 08, 14:30
RDutt: Beta is a measure of a stock's volatility in relation to the market. By definition, the market has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0. If a stock moves less than the market, the stock's beta is less than 1.0. High-beta stocks are supposed to be riskier but provide a potential for higher returns; low-beta stocks pose less risk but also lower returns. 
20 Apr 08, 14:30
Shilpa: ok Varun... 
20 Apr 08, 14:30
Bramesh: dalal strret we can get beta value 

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[older messages] 
20 Apr 08, 14:32
[×] [o] Vinayak: bharat post after 30 minutes now/.I am very strict now 
20 Apr 08, 14:33
[×] [o] Vinayak: varun carry on 
20 Apr 08, 14:33
[×] [o] hirentherock: bharat..discuss all other things after varun gets over wd d topic 
20 Apr 08, 14:33
[×] [o] truemoon: varun jain pl continue 
20 Apr 08, 14:33
[×] [o] DUDE: mits i heard u r using angel broking can u tell how it is i have to choose between religare and angel 
20 Apr 08, 14:33
[×] [o] Varun Jain: So guys.............. we have discussed 2 qualities of a good portfolio.... 1) diversify among sectors 2)diversify among specific stocks based on individual riskiness 
20 Apr 08, 14:33
[×] [o] Ali: Vinayak that's good, guys let us wait for Varun to finish I am sure he has much more to share with us 
20 Apr 08, 14:34
[×] [o] jolly: vini normally we caompares tock bete vs mkt bet value am i right? 
20 Apr 08, 14:34
[×] [o] truemoon: varun s carry on 
20 Apr 08, 14:34
[×] [o] ANJI: what is swing trade 
20 Apr 08, 14:35
[×] [o] Vinayak: Jolly u will be told 2 ask questions 
20 Apr 08, 14:35
[×] [o] Varun Jain: AND how to distinguish between trading and lng term investing 
20 Apr 08, 14:35
[×] [o] Vinayak: anji post aftre 30 minutes 
20 Apr 08, 14:35
[×] [o] aishwarya: friends donot u understand the flow of varun gets disturbed 
20 Apr 08, 14:35
[×] [o] DUDE: MITS i heard u r using angel broking can u tell how it is i have to choose between religare and angel 
20 Apr 08, 14:35
[×] [o] hirentherock: anji dnt ask questions for now.strict warning 
20 Apr 08, 14:35
[×] [o] Vinayak: after* 
20 Apr 08, 14:35
[×] [o] Vinayak: dude dont talk now 
20 Apr 08, 14:35
[×] [o] hirentherock: dude last warning 
20 Apr 08, 14:35
[×] [o] Varun Jain: the low of varun......  
20 Apr 08, 14:35
[×] [o] MiTs: dude wil reply after 30 min 
20 Apr 08, 14:35
[×] [o] Varun Jain: *flow 
20 Apr 08, 14:36
[×] [o] Varun Jain: Beta calculation can also be used to hedge a long term folio ugainst unforseen crashes 
20 Apr 08, 14:37
[×] [o] Ali: The topic is getting scattered, please go ahead 
20 Apr 08, 14:37
[×] [o] aishwarya: how varun 
20 Apr 08, 14:38
[×] [o] Varun Jain: If an investor knows the beta of his portfolio........then he can hedge his folio by buying the corresponding no. of nifty puts... to hedge against a crash 
20 Apr 08, 14:39
[×] [o] aishwarya: ok 
20 Apr 08, 14:39
[×] [o] Ali: Varun this is a bit complex, I mean I do I chart out the beta of my portfolio 
20 Apr 08, 14:39
[×] [o] truemoon: varun give us exmple 
20 Apr 08, 14:40
[×] [o] truemoon: varun explain with an example pl 
20 Apr 08, 14:41
[×] [o] Varun Jain: For example ..........if the beta of someones folio is 1.........and folio value is 2.5 lakhs......then he need to buy 1 put for nifty to hedge completely against crash(nifty is 5000) 
20 Apr 08, 14:42
[×] [o] Varun Jain: so as the beta keeps on increasing the more puts 1 need to buy 
20 Apr 08, 14:42
[×] [o] Ali: Varun there is the guess, How will I know the beta of my portfolio is 1 or less 
20 Apr 08, 14:43
[×] [o] Vinayak: Guys post your questions now 
20 Apr 08, 14:43
[×] [o] Vinayak: I will taking a 10 mins discussion on choosing your stocks after this 
20 Apr 08, 14:43
[×] [o] Ali: Varun assuming I have RIL, BHEL, LT, GMR, JP Asso, SBI, Suzlon with a value of 50 Lacs, how should I calculate the beta of this folio 
20 Apr 08, 14:43
[×] [o] Vinayak: A very small and informative one 
20 Apr 08, 14:43
[×] [o] Varun Jain: ALI.......U CAN GET THE BETA OF YOUR STOCKS FROM SOME SITES...THEN U CAN MUTLIPLY THE INDIV BETA WITH THEIR WEIGHTS IN THE FOLIO AND GET THE BETA FOR FOLIO 
20 Apr 08, 14:43
[×] [o] ashu2025: Varun how exaactly we calculate the number of puts to buy for our beta 
20 Apr 08, 14:44
[×] [o] Varun Jain: OK LET ME EXPLAIN THE WHOLE PROCESS 
20 Apr 08, 14:44
[×] [o] jolly: varun how can we calculate our own portfolio beta value? 
20 Apr 08, 14:44
[×] [o] Ali: Varun please go ahead 
20 Apr 08, 14:45
[×] [o] Ali: Vinayak do we post the questions or let Varun finish it 
20 Apr 08, 14:45
[×] [o] hirentherock: let varun explain as he told 
20 Apr 08, 14:45
[×] [o] Varun Jain: INVESTOR A HAS 3 STOCKS IN FOLIO.......... STOCK 1 WITH BETA 1.2. FOR 2 LAKHS....... S2 WITH BETA 1.4 FOR 3 LAKHS...... AND S3 WITH BETA 1.3 FOR 5 LAKHS 
20 Apr 08, 14:46
[×] [o] Varun Jain: NOW THE BETA OF THIS FOLIO IS = ((1*1.2)+(1.4*3)+(1.3*5))/(2+3+5) 
20 Apr 08, 14:46
[×] [o] Newman: hi friends 
20 Apr 08, 14:47
[×] [o] aishwarya: ok varun 
20 Apr 08, 14:47
[×] [o] Varun Jain: SO BETA IS 1.31 
20 Apr 08, 14:48
[×] [o] sanjubaba: varun price considered shd be cmp or pur price 
20 Apr 08, 14:48
[×] [o] Varun Jain: NOW LETS CALCULATE NO. OF PUTS TO BE BOUGHT 
20 Apr 08, 14:48
[×] [o] Ali: Varun I think it should be ((1.2*2)+(1.4*3)+(1.3*5))/(2+3+5) please clarify 
20 Apr 08, 14:48
[×] [o] Vinayak: guys fire your questions if you have any of them 
20 Apr 08, 14:48
[×] [o] hirentherock:  
20 Apr 08, 14:49
[×] [o] Yuvi: ((2 *1.2)+(1.4*3)+(1.3*5))/(2+3+5) 
20 Apr 08, 14:49
[×] [o] Varun Jain: CORRECT ALI 
20 Apr 08, 14:49
[×] [o] Varun Jain: DOE ANYONE WANT TO KNOW NOW HOW TO CALCULATE NO OF PUTS TO BUY???? 
20 Apr 08, 14:49
[×] [o] ashu2025: Varun how to calculate corresponding PUTS? 
20 Apr 08, 14:50
[×] [o] Vinayak: I will share how to pick up stocks.With one recent long term pick as a Thanks giving for attending the session 
20 Apr 08, 14:50
[×] [o] Ali: Yeah very much Varun, please go ahead 
20 Apr 08, 14:50
[×] [o] aishwarya: hiren why the smily 
20 Apr 08, 14:50
[×] [o] hirentherock: vinayak told fire d questions n there was a mistake so i just smiled  
20 Apr 08, 14:51
[×] [o] aishwarya: lol hiren 
20 Apr 08, 14:51
[×] [o] aishwarya: that was smart thinking hiren 
20 Apr 08, 14:51
[×] [o] Varun Jain: SO NOW THE THING FOR U GUYS IS TO PLZ CALCULATE THE BETA OF UR PORTFOLIO...AND DISCUSS TOMORROW ON BLOG ABOUT HOW RISKY OR LESS RISKY IS UR PORTFOLIO 
20 Apr 08, 14:51
[×] [o] sumit_829: hi friends 
20 Apr 08, 14:52
[×] [o] jolly: varun how to add puts for hedging and how to reduce the risk in our portfolio? 
20 Apr 08, 14:52
[×] [o] Varun Jain: I HOPE OF WAS OF SOME USE TO YOU GUYS.....THANKS FOR LISTENING 
20 Apr 08, 14:52
[×] [o] aishwarya: varun that was very simple&elementry 
20 Apr 08, 14:52
[×] [o] Ali: Varun if the beta of folio is less than 1 then what do you suggest? 
20 Apr 08, 14:52
[×] [o] sridh75: Varun Jain:can you please put this in excel , so mistakes 
20 Apr 08, 14:52
[×] [o] jolly: any calculation for that? 
20 Apr 08, 14:53
[×] [o] ashu2025: varun, how to calculate PUTS and that too of wht level nity 
20 Apr 08, 14:53
[×] [o] sridh75: Varun Jain: will be minimum 
20 Apr 08, 14:53
[×] [o] Ali: Sridh75 just copy the text of the formula from the screen and paste in excel sheet you will get the result 
20 Apr 08, 14:53
[×] [o] Varun Jain: AISH.......... I HAVE TO CONSIDER THE WHOLE BLOG...IF U HAVE ANY SPECIFIC QUERY THE U CAN ASK 
20 Apr 08, 14:53
[×] [o] accessarpit: Thanks Varun for your efforts....it was a really good & informative session...and a humble effort from TSR 
20 Apr 08, 14:54
[×] [o] Vinayak: guys 
20 Apr 08, 14:54
[×] [o] Vinayak: now kindly give me 10 minutes 
20 Apr 08, 14:54
[×] [o] hirentherock: diya...tum b kya yad rakhoge :d 
We will have an interactive chat session on portfolio advisory today at 2.00pm today afternoon.Kindly visit http://www.teamsr.co.cc/ at 1:45 
 
20 Apr 08, 14:54
[×] [o] hirentherock: diya...tum b kya yad rakhoge :d 
20 Apr 08, 14:54
[×] [o] jolly: varun how to add puts for edging 
20 Apr 08, 14:54
[×] [o] Ali: Thanks Varun!!!!!! 
20 Apr 08, 14:54
[×] [o] sumit_829: de diya 
20 Apr 08, 14:54
[×] [o] Varun Jain: NOW GUYS.......LISTEN TO VINAYAK.THERE IS ANOTHER SESSION 
20 Apr 08, 14:55
[×] [o] ashu2025: varun, how to calculate PUTS and that too of wht level nity 
20 Apr 08, 14:55
[×] [o] Vinayak: Stock picking as many people say is not an art neither does it require factory visits and constant interaction with company people. 
20 Apr 08, 14:55
[×] [o] Varun Jain: GREAT ALI.WATS UR BETA? 
20 Apr 08, 14:55
[×] [o] aishwarya: ali if ur no queries varun it is compliments for ur efforts u made it look so simple 
20 Apr 08, 14:55
[×] [o] jolly: for example my beta value is above 1 and less than 1 
20 Apr 08, 14:55
[×] [o] Vinayak: Stock picking as many people say is neither an art nor does it require factory visits and constant interaction with company people. 
20 Apr 08, 14:55
[×] [o] Vinayak: Point is how should you go ahead 
20 Apr 08, 14:55
[×] [o] Varun Jain: JOLLY/............LISTEN TO VINAYAK................WE WILL DISCUSS THAT IN NEXT SESSION 
20 Apr 08, 14:56
[×] [o] jolly: ok varun 
20 Apr 08, 14:56
[×] [o] sumit_829: what is beta.......... 
20 Apr 08, 14:56
[×] [o] Ali: Varun I need to calculate it and will share with you tomorrow 
20 Apr 08, 14:56
[×] [o] Vinayak: first view the sectors that is of interests for markets and not you 
 
20 Apr 08, 14:56
[×] [o] Vinayak: first view the sectors that is of interests for markets and not you 
20 Apr 08, 14:57
[×] [o] Varun Jain: GUYS,,,,,.......... WARNING.NOW LISTEN TO VINAYAK.........QUESTION AFTER THE SESSION 
20 Apr 08, 14:57
[×] [o] Vinayak: 2>. view the leaders in the sectors that are leaders in revenue sharing and are under model portfolio 
20 Apr 08, 14:57
[×] [o] aishwarya: VARUN mywords were compliments i have no specific quiry u made it look so easy&simple 
20 Apr 08, 14:58
[×] [o] Vinayak: now point is how to make money with minimum effort 
20 Apr 08, 14:58
[×] [o] Vinayak: You sit here and do just 2 hours research and sit back and relax for 6 months with shares in your dp. 
20 Apr 08, 14:58
[×] [o] Vinayak: In these 6 months the expected returns shouldn't be below 40-45% 
20 Apr 08, 14:59
[×] [o] Ali: Vinayak you mean to say a MT investment 
20 Apr 08, 14:59
[×] [o] Vinayak: also do note that we wont Buy penny stocks.We will do Indepth research and Buy 
20 Apr 08, 14:59
[×] [o] Vinayak: yes ali 
20 Apr 08, 14:59
[×] [o] Vinayak: A sector that I have always loved in the current bull run is steel and iron stocks 
20 Apr 08, 15:00
[×] [o] Vinayak: I have been discussing a stock since past one month here 
20 Apr 08, 15:00
[×] [o] Ali: But I think Vinayak this sector is beaten up badly now a days 
 
20 Apr 08, 15:00
[×] [o] Ali: But I think Vinayak this sector is beaten up badly now a days 
20 Apr 08, 15:01
[×] [o] Ali: Can you please name it 
20 Apr 08, 15:01
[×] [o] Vinayak: Few people know that the stock has bounced close to 40% from its lows 
20 Apr 08, 15:01
[×] [o] Vinayak: ali i will name it 
20 Apr 08, 15:01
[×] [o] jolly: vini any specific reason for this sector if u tell we also know how to choose sectors 
20 Apr 08, 15:01
[×] [o] Vinayak: The report has not been mailed 2 premium clients yet.i will like to share it here today 
20 Apr 08, 15:01
[×] [o] Vinayak: Jolly prices will be firm for coming 4-5 years 
20 Apr 08, 15:01
[×] [o] Vinayak: teh value doesnt lie in sail,tisco 
20 Apr 08, 15:02
[×] [o] Vinayak: value lies in small and mid cap stocks who will eb alloted mines in coming 2-3 months 
20 Apr 08, 15:02
[×] [o] Vinayak: Once the mines are alloted we will see good value in each one of them and who is who of the investment world talking about it in CNBC 
20 Apr 08, 15:03
[×] [o] Vinayak: But that time we wont get shares until they are fully valued 
20 Apr 08, 15:03
[×] [o] shady: which r those companies vini 
20 Apr 08, 15:03
[×] [o] Vinayak: before i start with the current pick 
20 Apr 08, 15:03
[×] [o] Vinayak: will start with some of our past picks 
 
20 Apr 08, 15:04
[×] [o] Vinayak: MSP Steel & Power Ltd. (MSP) was caught by us at 17-18 levels 
20 Apr 08, 15:04
[×] [o] Vinayak: as a long term pick 
20 Apr 08, 15:04
[×] [o] Vinayak: The question comes why 
20 Apr 08, 15:05
[×] [o] Vinayak: we discovered while researching on the stock that the value lies in it coal mines 
20 Apr 08, 15:05
[×] [o] Vinayak: *Coal Linkages: * MSP's requirement of 1.44 lakh tonnes of coal for each kiln of one lakh tonne capacity is being sourced from Mahanadi Coalfields and South Eastern Coalfields initially. After coal mining from its joint venture company, it will captively source its coal requirements, which would reduce its cost substantially. 
20 Apr 08, 15:05
[×] [o] Vinayak: markets fancied mines in this Bull run.we found out this stock around may last year. 
20 Apr 08, 15:06
[×] [o] Vinayak: Stock doubled we said book your cost and keep the profits.Now people dont need 2 see the price.Its for free 
20 Apr 08, 15:06
[×] [o] Vinayak: Second pick in the same space was Jayaswals Neco 
20 Apr 08, 15:07
[×] [o] aishwarya: again recomondedat17-18 
20 Apr 08, 15:07
[×] [o] Vinayak: Yup 
20 Apr 08, 15:07
[×] [o] aishwarya: touched46 
20 Apr 08, 15:07
[×] [o] Vinayak: But the reason was what was attractive in the stock 
20 Apr 08, 15:08
[×] [o] Vinayak: If you see the time when we had covered it 
20 Apr 08, 15:08
[×] [o] jolly: cmp alo 42.2 
20 Apr 08, 15:08
[×] [o] Vinayak: 12th august 2007 -vinayak 
20 Apr 08, 15:08
[×] [o] Vinayak: EXCLUSIVE: THE COMPANY HOLDS 12.76% STAKE IN JAS TOLL ROAD COMPANY LIMITED.AS Toll Road Company Limited is an SPV promoted by M/s Jayaswals group and SREI International Finance Limited for rehabilitation and widening of the Neelamangala – Tumkur section of NH – 4, to a 4-lane corridor with provision to be made for further widening to 6-lanes. The project is part of the Golden Quadrilateral project initiative of NHAI The project cost at Rs 2217 mn has been financed by equity of Rs 759 mn from the promoters, rupee term loans aggregating Rs 1250 mn, and an NHAI grant of Rs 208 mn. The project was commissioned in April 2004 WE HAVE VALUED JNL STAKE IN THIS VENTURE AT 33 CR WHICH WILL GIVE AN EXTRA VALUE PER SHARE OF RS 3 PER SHARE ABOVE OUR ESTIMATIONS.MOREOVER JAS TOLL ROAD WILL BE COMING OUT WITH AN IPO VERY SOON AND IT HAS ALREADY FILED RHP WITH SEBI. 
20 Apr 08, 15:08
[×] [o] Vinayak: this is an excerpt from that report 
 
20 Apr 08, 15:08
[×] [o] Vinayak: this is an excerpt from that report 
20 Apr 08, 15:09
[×] [o] Vinayak: after our recommendation on 17th of august most of the investment analysts gave a Buy call on it. 
20 Apr 08, 15:09
[×] [o] Yuvi: Vinayak's Fav pick Rathi Udyog, My Fav pick Visa Steel 
20 Apr 08, 15:10
[×] [o] Vinayak: yuvi post after 30 minutes 
20 Apr 08, 15:10
[×] [o] Vinayak: Sp tulsian gave a buy call at 42.stock reached 83 after that 
20 Apr 08, 15:10
[×] [o] Vinayak: Point is when you catch it early your margin of safety rises 
20 Apr 08, 15:11
[×] [o] Vinayak: 2. The stock trades at a very low EFY08 PE OF 2.8 and is a strong candidate of re-rating. 
20 Apr 08, 15:11
[×] [o] chirag: i missed the session is it over? 
20 Apr 08, 15:11
[×] [o] Vinayak: this was the valuation when the call was given 
 
20 Apr 08, 15:11
[×] [o] Vinayak: this was the valuation when the call was given 
20 Apr 08, 15:12
[×] [o] Vinayak: http://brokersreports.blogspot.com/2007/09/jayasawals-neco-limited-premium-clients.html one can download that report from here 
20 Apr 08, 15:12
[×] [o] Vinayak: Now coming to my recent pick 
20 Apr 08, 15:12
[×] [o] Vinayak: any guesses 
20 Apr 08, 15:12
[×] [o] satman007: NO probs Chirag.... A Log file for whole Teaching Session will be uploaded to GOOGLE Group of TEAMTSR after session is over...wait a while  
20 Apr 08, 15:12
[×] [o] Vinayak: I had a discussion about the stock a number of times 
20 Apr 08, 15:12
[×] [o] jolly: ind bank merchant 
20 Apr 08, 15:12
[×] [o] ANJI: thank u for best advices 
20 Apr 08, 15:12
[×] [o] Vinayak: yes chirag will upload the contents 
20 Apr 08, 15:12
[×] [o] aishwarya: yes vinayakforbesco 
20 Apr 08, 15:12
[×] [o] prasin: forbes 
20 Apr 08, 15:12
[×] [o] Vinayak: No jolly 
20 Apr 08, 15:13
[×] [o] Vinayak: Its in steel 
20 Apr 08, 15:13
[×] [o] jolly: ok vini 
20 Apr 08, 15:13
[×] [o] Vinayak: no pradeep 
20 Apr 08, 15:13
[×] [o] prakash: rathi udyog 
20 Apr 08, 15:13
[×] [o] MiTs: om metal ?  
20 Apr 08, 15:13
[×] [o] Vinayak: Yup prakash 
20 Apr 08, 15:13
[×] [o] Vinayak: Rathi udyog 
20 Apr 08, 15:13
[×] [o] MiTs: jaiswal neco? 
20 Apr 08, 15:13
[×] [o] MiTs: ok.. 
20 Apr 08, 15:13
[×] [o] sanjubaba: rathi udyog 
20 Apr 08, 15:13
[×] [o] ANJI: sail 
20 Apr 08, 15:13
[×] [o] Vinayak: If you do a google search you will reach to its website 
20 Apr 08, 15:13
[×] [o] Vinayak: http://www.rathiudyog.in/aboutus.htm 
 
20 Apr 08, 15:13
[×] [o] Vinayak: http://www.rathiudyog.in/aboutus.htm 
20 Apr 08, 15:14
[×] [o] Vinayak: its not uploaded since 2005 speaks poorly about the management.This is what some of my analysts friends say 
20 Apr 08, 15:15
[×] [o] Vinayak: What i have to say here is websites are created in a matter of hours 
20 Apr 08, 15:15
[×] [o] Vinayak: Rathi is a 6 decade old group in steel industry 
20 Apr 08, 15:15
[×] [o] sachin777: faccor steel ?? 
20 Apr 08, 15:16
[×] [o] Vinayak: Will an attractive website make the stock attractive.Never 
 
20 Apr 08, 15:16
[×] [o] Vinayak: Will an attractive website make the stock attractive.Never 
20 Apr 08, 15:16
[×] [o] Bramesh: Facor stell multi bagger 
20 Apr 08, 15:16
[×] [o] Vinayak: If someone does some research he will know that rathi had come with a FPO at 51 in 2006 
20 Apr 08, 15:16
[×] [o] Vinayak: Bramesh post after 30 minutes 
20 Apr 08, 15:17
[×] [o] Vinayak: after 2 full years price is at 26 
20 Apr 08, 15:17
[×] [o] Vinayak: Why???? 
20 Apr 08, 15:17
[×] [o] aishwarya: recent correction in that sector 
20 Apr 08, 15:17
[×] [o] Vinayak: answer remains in the fact that the co.. is now in investment phase 
20 Apr 08, 15:18
[×] [o] Vinayak: 30 mw captive power plant 
20 Apr 08, 15:18
[×] [o] Vinayak: and a 0.15 mtpa sponge iron plant in its sambhalpur facility is active since september 2007. 
20 Apr 08, 15:18
[×] [o] ANJI: msp steel &power 
20 Apr 08, 15:19
[×] [o] Vinayak: Money is made when you know the news before the crowd 
20 Apr 08, 15:19
[×] [o] Vinayak: This news of expansion is known by 70%.Whats new in It 
20 Apr 08, 15:19
[×] [o] Vinayak: any guesses 
20 Apr 08, 15:20
[×] [o] sanjubaba: vinayak i have noticed that mgmt of these small steel co.are very unprofessional.they run co.like family owned co. ala neco.sarda energy is one of the best managed co.insteel,fully integrated from mines,power,sponge iron and ferro alloys 
20 Apr 08, 15:20
[×] [o] nsevsbse: hi 
 
20 Apr 08, 15:20
[×] [o] nsevsbse: hi 
20 Apr 08, 15:20
[×] [o] aishwarya: power will cost practically nil for them 
20 Apr 08, 15:20
[×] [o] Vinayak: Thanks sanju 
20 Apr 08, 15:20
[×] [o] Vinayak: 20 Apr 08, 15:19 [×] [o] Vinayak: This news of expansion is known by 70%.Whats new in It 
20 Apr 08, 15:20
[×] [o] Vinayak: Kindly reply in context to this question 
20 Apr 08, 15:20
[×] [o] Vinayak: whats new in rathi udyog 
20 Apr 08, 15:21
[×] [o] accessarpit: demerger? 
20 Apr 08, 15:22
[×] [o] Vinayak: No access 
20 Apr 08, 15:22
[×] [o] Vinayak: I think most here are banned  
20 Apr 08, 15:22
[×] [o] sandya: accquisition? 
20 Apr 08, 15:22
[×] [o] Vinayak: No sandya 
20 Apr 08, 15:22
[×] [o] sanjubaba: mines 
20 Apr 08, 15:22
[×] [o] sandya: k 
20 Apr 08, 15:22
[×] [o] Vinayak: The reason is similar to msp stee; 
20 Apr 08, 15:22
[×] [o] Vinayak: yes sanju 
20 Apr 08, 15:22
[×] [o] Vinayak: Co.. is getting coal mines alloted 
 
20 Apr 08, 15:22
[×] [o] Vinayak: Co.. is getting coal mines alloted 
20 Apr 08, 15:23
[×] [o] sanjubaba: in which state vini? 
20 Apr 08, 15:23
[×] [o] Vinayak: The coal mines will lead to saving and ost reduction 
20 Apr 08, 15:23
[×] [o] Vinayak: cost* 
20 Apr 08, 15:23
[×] [o] Vinayak: www.coal.nic.in/cpagenda.pdf 
20 Apr 08, 15:23
[×] [o] Vinayak: Refer some links 
20 Apr 08, 15:23
[×] [o] Vinayak: www.coal.nic.in/listsponge.pdf 
20 Apr 08, 15:23
[×] [o] Vinayak: mahanadicoal.nic.in/list.pdf 
20 Apr 08, 15:24
[×] [o] Vinayak: they have received a LOA from MCL for coal mines 
20 Apr 08, 15:24
[×] [o] aishwarya: again orissa vinayak 
20 Apr 08, 15:24
[×] [o] Vinayak: emd of 2 crores approx for both cpp and sponge iron plant 
20 Apr 08, 15:24
[×] [o] Vinayak: Yes aish 
20 Apr 08, 15:24
[×] [o] Vinayak: Once this news is out its my guarantee you wont get the stock at cmp. 
20 Apr 08, 15:25
[×] [o] Vinayak: It will easily triple or be four times 
20 Apr 08, 15:25
[×] [o] Vinayak: mahanadicoal.nic.in/captive160108.pdf 
20 Apr 08, 15:25
[×] [o] jolly: but vini where can we get this news earlier? 
20 Apr 08, 15:25
[×] [o] Vinayak: www.coalindia.nic.in/summary.pdf 
20 Apr 08, 15:25
[×] [o] sheroo: crr hike 50 ps at two stages - nifty likely to scale 5060 5093 before expiry 
20 Apr 08, 15:25
[×] [o] Vinayak: Jolly 
20 Apr 08, 15:25
[×] [o] aishwarya: yes vinayak in fact orissa produces  
 
20 Apr 08, 15:25
[×] [o] aishwarya: yes vinayak in fact orissa produces &sells more power to all the southern states 
20 Apr 08, 15:25
[×] [o] hirentherock: disclosure:im holding some shares of rathi udhyog  
20 Apr 08, 15:25
[×] [o] Vinayak: You have 2 constantly search coal india site 
20 Apr 08, 15:26
[×] [o] jolly: not this one vini generally all these kind of news 
20 Apr 08, 15:26
[×] [o] jolly: ok vini 
20 Apr 08, 15:26
[×] [o] Vinayak: Jolly u should have good skills 2 search 
20 Apr 08, 15:26
[×] [o] bharat: What about marekt for this week? 
20 Apr 08, 15:26
[×] [o] Vinayak: One more factor 
20 Apr 08, 15:26
[×] [o] jolly: with help of vini? 
20 Apr 08, 15:27
[×] [o] Vinayak: Promoters know the co.. much more then you and me 
20 Apr 08, 15:27
[×] [o] Vinayak: In rathi udyog cmp 27 case Promoters have taken warrants only last month @51rs. 
20 Apr 08, 15:27
[×] [o] Vinayak: Hope next time when we discuss a long term pick in a year rathi has given you good returns 
20 Apr 08, 15:28
[×] [o] aishwarya: that is why the keep us in dark to release these facts as a surprise wepon 
20 Apr 08, 15:28
[×] [o] jolly: sure vini 
 
20 Apr 08, 15:28
[×] [o] sanjubaba: vini some co. are facing naxal problem in the regions of mines allotted to them in states of jharkhand,chhattisgarh and orrissa 
20 Apr 08, 15:28
[×] [o] Vinayak: Yes sanju 
20 Apr 08, 15:28
[×] [o] Vinayak: But that wont stop any of them . 
20 Apr 08, 15:29
[×] [o] Vinayak: Does fear of snakes keep people away from treasures.Never 
20 Apr 08, 15:29
[×] [o] Vinayak: http://www.blogger.com/comment.g?blogID=1764286854570111935&postID=5550357524912971018 
20 Apr 08, 15:29
[×] [o] nifty_trader: is rathi udyog and rathi ispat r same or different 
20 Apr 08, 15:29
[×] [o] Vinayak: Nifty diff 
20 Apr 08, 15:29
[×] [o] Vinayak: rathi udyog 
20 Apr 08, 15:30
[×] [o] Vinayak: http://www.blogger.com/comment.g?blogID=1764286854570111935&postID=5550357524912971018 
20 Apr 08, 15:30
[×] [o] Vinayak: For those who have something 2 say.Kindly post comments here 
20 Apr 08, 15:30
[×] [o] Vinayak: any questions can be posted now 
20 Apr 08, 15:31
[×] [o] taprico: Oh I missed it today - but got archives from 1.59 hope every thing is there 
20 Apr 08, 15:31
[×] [o] aishwarya: is ratiudyog ur latest LTpick vini 
20 Apr 08, 15:32
[×] [o] accessarpit: vini apart from Steel...which other sector do u see to be bouyant if the market goes up? 
20 Apr 08, 15:32
[×] [o] Vinayak: yes aish 
20 Apr 08, 15:32
[×] [o] newman: is their any other sector for this type of market on which we can bet on 
20 Apr 08, 15:32
[×] [o] Vinayak: access apart from steel i like hotels 
20 Apr 08, 15:32
[×] [o] sandya: is it the right time to buy or do we see any correction - rathi udyog? 

For details about our premium services visit

for performance of delivery calls
http://premiumcalls.blogspot.com/


FOR PAYMENT DETAILS
http://docs.google.com/View?docid=dkh7xb6_4dff7hx


Any further query email us at stockresearchers@gmail.com
or Call hiren at 09327744250

Books On Technical analysis -A good collection

2008-04-12T19:24:00.000-07:00

Download here

Real time Power india bulls (PIB) to amibroker with backfill

2008-03-26T20:28:00.000-07:00

Compiled by Tarun singh ( Taprico )

Real time Power india bulls (PIB) to amibroker with backfill

To get streaming data from PIB to Amibroker do this:-

1) Start PIB & open your market watch. You can have 100 tickers in 1 watch. If you want more tickers, open another market watch and keep all the market watches open.

2) PIB will disconnect if there is no activity for a long time in the account, so keep doing something. One way is to keep one chart open. Right click any ticker and open the chart in PIB. Make sure you are connected at all times. No data can be imported if you are not connected.

3) Open Amibroker and keep the database where you want to extract the PIB Data open. You can extract the Yahoo and PIB data in the same database.

4) Now open TDI.

5) Click On PIB (On TDI). Select the Data folder path. Which would be something like this ---

C:\Program Files\Indiabulls Securities Limited\Power Indiabulls\3024501\Data

6) For importing the PIB data - click start Import. All the data will start flowing into Amibroker. First the old data already present in your PIB Data Folder will get imported and then it will import the current data as and when PIB downloads it on your computer. Remember, PIB downloads the data into your computer anything from 45 seconds to 4 minutes. You will see data flowing to Amibroker in bunches.

7) If you need the data to flow urgently at any given moment and don't want to wait for the next "Bunched Update", you will have to do it manually. But its possible. Goto PIB and open any 1 Intraday chart of any Ticker by clicking F5 or opening Intraday Chart. Now again, Right Click on the chart and click Sync. This will get the back filled data for the chart & the current data for all the tickers open in your market watch straight into AMI.

Wow !! Now you have Futures, Options & the works. You could for eg., see live Nifty Tick by Tick from Yahoo & also have Nifty Futures to correlate your trade.

Watch out for Lot more from us. All at the same rate. :)

Have fun. Happy Trading and all the best.

Cheers !! :)

If you have further query refer to taprico on the chat room listed above.

Pitfalls of Day Trading

2008-03-25T09:56:00.000-07:00

Pitfalls of Day Trading

There are a number of things that can go wrong when you day trade stocks over which you may have little or no control. These form part of the risks associated with day trading of which you should be aware. Here are some of the common pitfalls encountered by many day traders relating to the execution of trades:

Execution of your orders are delayed due to order backlog or technical problems causing you to be filled at a higher price than you intended to pay.
You enter the wrong stock symbol when placing your order online.
You lose track of the many orders you have placed during the day.
your online broker's Web site goes down during the day and you cannot complete your trades.
Crossed or locked prices may occur for a period of time during which orders are not executed at all.
Failure or delays of real time data feeds can cause you to take an mistaken view of market conditions.
You misread a price quote and enter an order on the basis of this mistaken quote.
Your ISP goes down during the day leaving you without an Internet connection.
You place a market order as the price falls and find your order executed minutes later at a higher price because of the large backlog in unfilled orders for the stock.
You find that the online order function you wanted is temporarily unavailable.
You find out that, on a particular day, bid-ask size is not updated as frequently as it should be or is inaccurate.
You act on a ''hot tip'' from a newsletter or Web site that caters to day traders and later learn that this source is paid by third parties to make recommendations.

Pitfalls of Day Trading

2008-03-22T23:49:00.000-07:00

Pitfalls of Day Trading

There are a number of things that can go wrong when you day trade stocks over which you may have little or no control. These form part of the risks associated with day trading of which you should be aware. Here are some of the common pitfalls encountered by many day traders relating to the execution of trades:

Execution of your orders are delayed due to order backlog or technical problems causing you to be filled at a higher price than you intended to pay.
You enter the wrong stock symbol when placing your order online.
You lose track of the many orders you have placed during the day.
your online broker's Web site goes down during the day and you cannot complete your trades.
Crossed or locked prices may occur for a period of time during which orders are not executed at all.
Failure or delays of real time data feeds can cause you to take an mistaken view of market conditions.
You misread a price quote and enter an order on the basis of this mistaken quote.
Your ISP goes down during the day leaving you without an Internet connection.
You place a market order as the price falls and find your order executed minutes later at a higher price because of the large backlog in unfilled orders for the stock.
You find that the online order function you wanted is temporarily unavailable.
You find out that, on a particular day, bid-ask size is not updated as frequently as it should be or is inaccurate.
You act on a ''hot tip'' from a newsletter or Web site that caters to day traders and later learn that this source is paid by third parties to make recommendations.

Common mistakes in trading

2008-03-22T23:46:00.001-07:00

Common mistakes in trading

Trading for excitement & thrill Not for profits.
Many traders consider stock market as casino and trade for thrill and fun only. As soon as one has a losing trade, he wants to quickly make back the lost money. He thinks about the other things he could have done with the money, regret taking the trade and want to recover as quickly as possible. This in turn leads to further mistakes. Be patient and wait for the next high probability opportunity. Don't rush back in.

Trading with a high ego.
Many individuals who have remained highly successful in other business ventures have failed miserably in trading game. Because they have a fairly big ego and thought they couldn't fail. Their egos become their downfall because they can not except that they would be wrong and refuse to get out of bad trades. Once again, whoever or wherever has any one come from does not concern the markets. All the charm, powers of persuasion, number of degrees & diplomas of business management on the wall or business savvy will not budge the market when you are wrong.

Four 4-letter words that will kill you! HOPE--WISH--FEAR--PRAY
If you ever find yourself doing one or more of the above while in a trade then you are in big trouble! Markets has own system of moving up & down. All the hoping, wishing and praying or being fearful in the world is not going to turn a losing trade into a winning one. When you are wrong just use a simple 6-letter word to correct the situation-GET OUT!

Trading with money you can't afford to lose.
One of the greatest obstacles to successful trading is using money that you really can't afford to lose. Examples of this would be money that is supposed to be used in any other business, money to be paid for college/school fee, trading with borrowed money etc. Ultimately what happens is that when someone knows in the back of their mind that they are risking the money they can not afford to lose, they trade out of fear and emotion versus logic and no emotion. If you are in this situation It is highly recommend that you stop trading until you earn enough to put into an account that you truly can afford to lose without causing major financial setbacks.

No Trading Plan
If you consider yourself a trader, ask yourself these questions: Do I have a set of rules that tell me what to buy, when to buy and how much to buy, not just for the next trade, but for the next 10 trades? Before I enter a trade, do I know when I will take profits? Do I know when I will get out if I am wrong? These questions form the first part of a trading strategy. There simply cannot be any expectation of success if we can't answer these questions clearly and concisely.

Spending profits before you make them.
Nothing is more exciting then getting into a trade that blasts off and puts you into a highly profitable situation. This can cause major problems however, because this type of trade puts you in a highly euphoric state and leads to daydreaming about the huge profits still to come. The real problem occurs as you get caught up in the daydream and expectations. This causes you to not be prepared to get out as the market reverses and wipes off all your profits because you have convinced yourself of the eventual outcome and will deny the reality of the situation. The simple remedy for this is to know where and how you will take profits once you enter the trade.

Not Cutting Losses or letting Profits run
One of the most common mistakes made by traders is that they let their losses grow too large. Nobody likes to take a loss, but failing to take a small loss early will often result in being forced to take a large loss later. A great trader is not someone who has never had a loss. Great traders have made many losses. But what makes them great is their ability to recover quickly from a string of losses. Every trader needs to develop a method for getting out of losing trades quickly. Research and learn to apply the best methods for placing protective stoploss orders. The only way to recover from many (small) losing trades is to make sure the winning trades are much larger. After a series of losing trades, it becomes difficult to hold a winning trade because we fear that it will also turn into a loss. Let your profitable trades run. Give them room to move and give them time to move.

Not Sticking to your plans & Changing strategies during market hours
If you find yourself changing your strategy during the day while the markets are still open, be mindful of the fact that you are likely to be subject to emotional reactions of fear and greed. With rare exception, the most prudent thing to do is to plan your trading strategy before the market opens and then strictly stick to it during trading hours.

Not knowing how to get out of a losing trade.
It's amazing that most of the traders don't have any clear escape plan for getting out of a bad trade. Once again they hope, pray wish and rationalize their position. It must be kept in mind that market does not care what you think. It does what it does and when you are wrong you are wrong! The easiest way to keep a bad trade from going really bad is to determine before you get in, where you will get out.

Falling in love with a stock (Just Flirt).
Many traders get fascinated by just a stock or two and look for opportunities to trade in those stocks only ignoring the other profitable trading opportunities. It is because they have simply fallen in love with a stock to trade with. Such tendencies can be suicidal as far as trading is concerned. It may cost any one dearly.

The Four Advantages Of Options

2008-03-20T23:35:00.000-07:00

"Before reading this article Kindly note i am not the Author of this article.It has been compiled from a Number of sources considered relevant".

The Advantages of Options

They have been around for more than 7 years, but options are just now starting to get the attention they deserve. Many investors have avoided options, believing them to be sophisticated and, therefore, too difficult to understand. Many more have had bad initial experiences with options because neither they nor their brokers were properly trained in how to use them. The improper use of options, like that of any powerful tool, can lead to major problems.

Finally, words like "risky" or "dangerous" have been incorrectly attached to options by the financial media and certain popular figures in the market. It is important for the individual investor to get both sides of the story before making a decision about the value of options.

These are the main advantages (in no particular order) that options may give an investor: they may provide increased cost efficiency; they may be less risky than equities; they have the potential to deliver higher percentage returns; and they offer a number of strategic alternatives. With advantages like these, you can see how those who have been using options for a while would be at a loss to explain options' lack of popularity in the past. Let's look into these advantages one by one.

1. Cost Efficiency
Options have great leveraging power. An investor can obtain an option position that will mimic a stock position almost identically, but at a huge cost savings. For example, in order to purchase 200 shares of a Reliance stock, an investor must pay out 5,00,000. However, if the investor were to purchase two 2300 calls@Rs.40 (with each contract representing 100 shares), the total outlay would be only 8,000 (2 contracts X 100 shares/contract X 40 market price). The investor would then have an additional 492,000 to use at his or her discretion. Obviously, it is not quite as simple as that. The investor has to pick the right call to purchase (a topic for another discussion) in order to mimic the stock position properly. However, this strategy, known as stock replacement, is not only viable but also practical and cost efficient.

2. Less Risky - Depending on How You Use Them
There are situations in which buying options is riskier than owning equities, but there are also times when options can be used to reduce risk. It really depends on how you use them. Options can be less risky for investors because they require less financial commitment than equities, and they can also be less risky due to their relative imperviousness to the potentially catastrophic effects of gap openings.

Options are the most dependable form of hedge, and this also makes them safer than stocks. When an investor purchases stock, a stop-loss order is frequently placed to protect the position. The stop order is designed to "stop" losses below a predetermined price identified by the investor. The problem with these orders lies in the nature of the order itself. A stop order is executed when the stock trades at or below the limit as indicated in the order.

3. Higher Potential Returns
You don't need a calculator to figure out that if you spend much less money and make almost the same profit, then you have a higher percentage return. When they pay off, that's what options typically offer to investors.

For example, using the scenario from above, let's compare the percentage returns of the stock (purchased for 2500) and the option (purchased at 40). Let us also say that the option has a delta of 80, meaning that the option's price will change 80% of the stock's price change. If the stock were to go up 50, your stock position would provide a 2% return. Your option position would gain 100% of the stock movement (due to its 80 delta), or 40. A 40 gain on a Rs 40 investment amounts to a 100% return - much better than the 2% return on the stock. Of course, we must point out that, when the trade doesn't go your way, options can exact a heavy toll - there is the possibility that you will lose 100% of your investment.

4. More Strategic Alternatives
The final major advantage of options is that they offer more investment alternatives. Options are a very flexible tool. There are many ways to use options to recreate other positions. We call these positions synthetics.

Synthetic positions present investors with multiple ways to attain the same investment goals, and this can be very, very useful. While synthetic positions are considered an advanced option topic, there are many other examples of how options offer strategic alternatives. For example, many investors use brokers that charge a margin when an investor wants to short a stock. The cost of this margin requirement can be quite prohibitive. Other investors use brokers that simply do not allow for the shorting of stocks, period. The inability to play the downside when needed virtually handcuffs investors and forces them into a black and white world while the market trades in color. But no broker has any rule against investors purchasing puts to play the downside, and this is a definite benefit of options trading.

The use of options also allows the investor to trade the market's "third dimension", if you will: no direction. Options allow the investor to trade not only stock movements, but also the passage of time and movements in volatility. Most stocks don't have large moves most of the time. Only a few stocks actually move significantly, and then they do it rarely. Your ability to take advantage of stagnation could turn out to be the factor that decides whether your financial goals are reached or whether they remain simply a pipe dream. Only options offer the strategic alternatives necessary to profit in every type of market.

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OPTIONS-An Introduction- A COMPILATION BY TSR EDUCATIONAL INITIATIVE

2008-03-20T22:23:00.000-07:00

"Before reading this article Kindly note i am not the Author of this article.It has been compiled from a Number of sources considered relevant".

Over the past fortnight i had received a number of requests on options.Truly in The present state of affairs the options market is a safe haven for traders and more importantly long term investors.The rise in volatility in the stock market compiled with the frequent trading gap observed between opening and closing moves makes options far more attractive then it ever was.
Before you jump in the wagon do read this mailer till the end to understand the basic risks that lies when someone enters into an options contract.Before i begin I would just like to mention that the largest number of Global financial institutions collapse have occurred due to large unhedged exposures to derivatives and specifically OPTIONS.Be it the 7.1 billion $ recent write down of SOCIETTE GENERAL ( European index derivatives) or the 6.5 billion$ collapse of Amaranth advisor's ( Gas futures).I strongly believe that Options as an instrument should be used for hedging and not trading.But In the present speculative world no trading instrument has been left untouched by the buzz named SPECULATION.

we start with the explanation of some basic terms related with futures and Options.

Options Contract
Options Contract is a type of Derivatives Contract, which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying security at a predetermined price within or at end of a specified period. The option contract that gives a right to buy is called a Call Option and the option contract that gives a right to sell is called a Put Option.

For example, buying a call option provides the right to buy a specified quantity of a security at a set strike price at some time on or before expiration, while buying a put option provides the right to sell. Upon the option holder's choice to exercise the option, the party who sold, or wrote, the option must fulfill the terms of the contract.

The theoretical value of an option can be determined by a variety of techniques. These models, which are developed by quantitative analysts, can also predict how the value of the option will change in the face of changing conditions. Hence, the risks associated with trading and owning options can be understood and managed with some degree of precision.

Exchange-traded options form an important class of options which have standardized contract features and trade on public exchanges, facilitating trading among independent parties. Over-the-counter options are traded between private parties, often well-capitalized institutions, that have negotiated separate trading and clearing arrangements with each other.

TSR NOTES:Money is made in selling options.Its like selling an insurance premium.But selling unhedged options is suicidal.It is evident from the fact that even in Indian markets 90% of the options goes unexcerised.But the problem remains in the fact that the equation becomes one of unlimited risk and limited profits.With this equation the economic stability in long term is threatened.

Option Holder

Option Holder means a Trading Member who is the buyer of the Options Contracts.

Option Writer

Option Writer means a Trading Member who is the seller of the Options Contracts.
Options in Indian stance:

Buy Open

Means a buy transaction, which will have the effect of creating or increasing a long position.

Closing buy transaction

Means a buy transaction, which will have the effect of partly or fully offsetting a short position.

Closing sell transaction

Means a sell transaction, which will have the effect of partly or fully offsetting a long position.

Contract Month

Contract month means the month in which a contract is required to be finally settled.

Derivatives Contract

A contract that derives its value from the prices of underlying securities.

Expiration Day

The day on which the final settlement obligation are determined in a Derivatives Contract.

Futures Contract

Means a firm contractual agreement to buy or sell the underlying security in the future.

Last Trading Day

Means the day up to and on which a Derivatives Contract is available for trading.

Long Position

Long Position in a Derivatives contract means outstanding purchase obligations in respect of a permitted derivatives contract at any point of time.

Open Position

Open position means the sum of long and short positions of the Member and his constituent in any or all of the Derivatives Contracts outstanding with the Clearing Corporation.

Open Interest

Open Interest means the total number of Derivatives Contracts of an underlying security that have not yet been offset and closed by an opposite Derivatives transaction nor fulfilled by delivery of the cash or underlying security or option exercise. For calculation of Open Interest only one side (either the long or the short) of the Derivatives Contract is counted.

Outstanding Obligation

Means the obligation which has neither been closed out nor been settled.

Permitted Derivatives Contract

Permitted Derivatives Contract is a derivative contract, which is permitted to be traded on the Futures & Options segment of the Exchange.

Regular lot / Market Lot

Means the number of units that can be bought or sold in a specified derivatives contract and it is also termed as Contract Multiplier.

Risk Disclosure Document

Refers to the document to be issued to all potential investors at the time of registration for disclosure of the risks inherent to derivatives.

Settlement Date

Means the date on which the settlements of outstanding obligations in a permitted Derivatives contract are required to be settled.

Sell Open

Means a sell transaction, which will have the effect of creating or increasing a short position.

Short Position

Short position in a derivatives contract means outstanding sell obligations in respect of a permitted derivatives contract at any point of time.

Trading cycle

Trading cycle means the period during which the derivatives contract will be available for trading.

Trade Type

Trade type is the type of trade as may be permitted by the F&O Segment of the Exchange from time to time for each Market Type.

Underlying Securities

Means a security with reference to which a derivatives contract is permitted to be traded on the Futures & Options segment of the Exchange from time to time

In Indian stock exchanges two types of Options Contract are traded

Index options contract :The European style
Stock options contract: The American style

American Options
In American Model of options,call or put contracts can be settled on any day that falls between the date of entry and the expiry date.

European Options
In the European Model of options,settlement on all open positions could be undertaken on the final settlement day alone.However,buying positions could be squarred up or selling positions could be covered by opposite transactions on a daily basis.

Option Premium

Option premium is the price that has to be paid by the option buyer to the seller to acquire the right to buy or sell.To the buyer,this is the cost of buying options whereas this is the income to the option seller.

Settlement Price

This is the price at which all outstanding positions are cleared by the Exchange on the settlement day(generally,the expiry day)and the price is arrived at on the basis of the spot value of the asset on that day.

Types of Options

Broadly,options can be classified into two namely call option and put option.

Call Option

A call option gives the right,but no obligation to the contract buyer to purchase a specified quantity of the underlying asset subject to the contract terms such as strike price,exercise date etc.
On the other side,the seller of a call option is bound to honor the rights of the buyer as per the contract terms.

Limited Risk and Unlimited Profitability to the Buyer
A call option is bought when the contract buyer is bullish(expects that the price would rise)about the underlying asset and expects that a profit could be made by exercising his right (to buy) at the strike price and selling the asset at a higher price which is decided by the spot value of the asset.If things are going as expected,the call buyer can make a handsome profit and this could be termed as unlimited.

On the other side,his loss is limited only upto the premium paid if the value of the asset remained stagnant or even lower.

For example,person A purchases a right to buy 100 shares of Infosys Technologies at a price of Rs.3500(strike price) per share on the last day of December,2001(expiry day) and the right is bought at a premium of Rs.100 per share.Also assume that Infosys share price has increased to Rs.3900 on the expiry day.The call buyer will purchase Infosys at Rs.3500/share(since this is the strike on the contract) from the call seller and the same will be sold at Rs.3900/share because it is the settlement value.His gain after deducting the premium is Rs.300 per share.

Conversely,suppose that value of Infosys has come down to Rs.3000 on the expiry day.He can simply walk away from the contract and what he has to lose is the premium and nothing more.

Limited Profit and Unlimited loss to the Seller

Unlike a call buyer,the writer of a call option is bearish on the underlying asset(expects that the price would fall) and the call is sold on expectation that a profit could be made to the extent of the premium received.So long as he is right, the seller makes a profit but this is limited to the premium.On the other side,the call writer may be a big loser if the value of the asset increases.In such an occasion, he has to buy it from the market at a higher price to fulfill his obligation to sell to the call buyer and this loss may be unlimited.

Covered Call

If a call is written on an asset on the backing of long position(buying) of the same asset in the cash market,it is known as a covered call.Since,the call seller has bought the required quantity of the asset in the cash market, losses due to a price increase of the asset could be eliminated.

Naked Calls

A naked call is one where the seller of the call option does not have position in the underlying asset.

Put Option

Put Option refers to a type of option contract which gives its buyer a right,but no obligation,to sell a specified quantity of the underlying asset on a future date at the agreed price(strike price)

On the other side,the seller of the contract is obligated to buy the asset from the contract buyer as per the agreed terms.

As stated earlier,the buyer enjoys unlimited profit and limited loss in the case of put option too while the seller has unlimited loss and limited profit.

In the case of put option,the contract buyer is bearish on the asset(expects that the price would fall)and intents to make a profit by selling at a higher price(strike price) and settling the same by purchasing at a lower rate on the settlement day.The extent to which the strike price(that is his selling price) is higher to the settlement price(that is his buying price) is his profit and this can be termed as unlimited.On the other side,the maximum loss that may incur to the contract buyer is limited upto the premium paid in case his expectations proved wrong.

As far as the seller of put option is concerned,his profit is limited to the premium received while the loss may go up to any level,subject to the difference between the strike price(at which he was forced to buy as per contract terms)and the settlement price on which he has to sell or settle the account.

For example,a put option on Infosys is bought at a strike price of Rs.1300 and on payment of a premium of Rs.80 per share.In this case,the contract buyer starts to make profit when the price of Infosys falls to Rs.1220(strike price minus premium) and continues to gain to the extent of the price fall. On the other side,his maximum loss is only upto the premium in case the price of Infosys is going up.

From the above discussion,it is clear that the risk is much higher in option writing(selling) than in option buying.Option buyers also enjoy higher leverage to their funds in the sense that big positions of buying and selling could be maintained by payment of a small premium which is just a fraction of the value of the assets underlying.

Intrinsic Value

The difference between strike price of a contract and the spot value of the underlying asset at any point of time is the intrinsic value.Based on this,option contracts are said to be in the money at the money and out of the money.

In the Money

A contract is in the money when the contract is in favor of the buyer,that is,a profit could be made by trading or exercising his rights.
In fact,it depends on the difference between the strike price and the exercise value and hence will differ in the case of call option and put option.
A call option is in the money when the settlement value of the asset is higher than the strike price.
A put option will be in the money when the settlement value is lower than the strike price.

At the Money

An option contract is said to be in the money when there is no cash flow from exercising the contract.Such a situation arises when the strke price is equal to the exercise price and the case is the same in both call options and put options.

Out of the Money

An option contract is out of the money when the contract is not in favour of the buyer,that is,a profit could not be generated by exercising the right or by trading.

A call option is out of the money at times when the strke price is higher than the spot value of the asset.In such circumstances,a profit could not be made from the contract.

A put option is out of the money when the strike price is lower than the spot value or settlement price of the asset.

When a contract is out of the money,the premium fetched by it may be lower as compared to other times.A contract which may be out of the money at a point of time may turn to be in the money at another time and vice versa.

Settlement in option contracts
As stated earlier,each option contract carries an expiry date beyond which,the contract does not have any value and all contracts have to be settled on the settlement date that may be either the expiry date itself or any day prior to that.On the day of settlement,all open positions(buying or selling of calls and put which are not covered by an opposite transaction) which are in the money are compulsorily settled by the Exchange at the settlement price which is the spot value of the asset in question on the settlement day and subsequently,the profit is handed over to buyers.All contracts at the money or out of the money on the settlement day will be allowed to expire as worthless.

Assignment

When an option buyer comes forward to execute his right to buy or sell,the obligation to honor this right falls upon a seller and a notice may be served for this purpose.The process of vesting obligation on a seller is called assignment.

Options trading in the Indian Equity Market

Index Options

Options on stock indices commenced on June,4,2001 in the Futures & Option (F&O) segment of the National Stock Exchange and subsequently in the Stock Exchange,Mumbai.

Index Options can be defined as contracts on which the underlying asset is a stock index.These option contracts give us the right to buy or sell equity indices as per the contract terms such as strike price,expiry date etc and the transaction will be settled in cash because index can not be handed over from person to person.

Currently,index options are available on the S&P CNX Nifty of the NSE and on the Sensex(BSE 30)of the Stock Exchange,Mumbai.

Equity Options

Besides index options,equity options or stock options are also commenced on July,2,2001 and option trading is available on 31 individual stocks.The list is the same as those stocks on which Stock Futures are available and it has already been covered.

Salient Features
Market Lot
As seen earlier in Futures,option contracts are standardized products as far as minimum value,market lot,expiry dates etc are concerned.Like Futures contracts,the minimum value per contract has been fixed at Rs.2 lakhs as recommended by SEBI and the market lots are designed so as to maintain the above stated minimum value.Hence,option contracts on Nifty are available in the lots of 50 units and its multiples while the Sensex is being traded in 25 units lots.
As far as stocks options are concerned,market lot differs from scrip to scrip and this is decided so as to ensure the minimum value of Rs.2 lakhs per contract.

Expiry date
At any point of time,three varieties of option contracts are available when looked from the maturity angle, namely the near month,next month and far month contracts and the expiry dates are on the last Thursday of each month(near month refers to contracts that expire in the current and the other two are contracts having expiry dates in the next two subsequent months respectively)For example,in January,all January contracts are near month contracts,Februry and March contracts are next month and far month contracts respectively.

Trading and settlement

Final settlement of option contracts is on the last Thursday of each month and all open positions on the settlement date will be closed out by the Exchange at the settlement price(spot value of the asset on the settlement date) if the contracts are in the money.Option contracts out of the money or at the money will be allowed to expire because they are worthless from the point of view of option buyers.

Besides,final settlement of the contracts by the Exchanges concerned,buying or selling positions of option holders and writers could be traded on a daily basis and positions could be closed out at any time by entering into an opposite transaction.For example, a buying position in a type of contract could be closed out by effecting a sell and vice versa and profit can be booked without waiting for the final settlement day.Thus,options are giving profitable trading opportunities to the participants on a daily basis.

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3,500-year-old investment tips that still work!

2008-03-01T07:13:00.000-08:00

3,500-year-old investment tips that still work!

A book was cast in stone more than 3,500 years ago in Babylon and was found by a British professor late last century. What impressed him -- and helped him come out of a debt crisis -- were the inscriptions on how to manage one's finances.

The book is now available as The Richest Man of Babylon. It's a very small book, but with some very profound thoughts.

1. Pay yourself first: When we think of budgeting against our income, we typically look at our expenses: how much do I have to pay my landlord, my grocery bills, my medical expenses, my entertainment bills, et cetera. Once we have decided on our expenses, we find out what our savings will be.

Financial advisors and many credit card companies (or banks) today help clients in estimating their lifestyle expenses and help them understand where their money is being spent.

The old book turns this theory on its head: it says 'pay yourself first.' Before you pay others for the services that they give you, you should save money for yourself. You are working for yourself and not just for paying your bills and, hence, you should receive a fair share of your income for yourself.

The Richest Man of Babylon decrees that you should pay a minimum of 10% of whatever you earn to yourself. And the best thing is: once you have paid yourself, you will realise that your lifestyle does not change at all!

In today's consumption- driven world, this simple philosophy takes a back seat. It is important to nip the temptation of over-spending at the bud. With facilities like ECS available today, it is easy to transfer money to investments as soon as income is received.

For the clients that we have done that, they say that after the first couple of months, they have become used to the lesser disposable income, and do not feel the pinch in their life style at all.

2. Make your money work harder: The Richest Man of Babylon says that the only way for your money to grow is if it procreates. Using a wonderful analogy, it states that the money saved -- and invested -- is the father and it should bear children. The joy -- and the secret to financial independence -- lies in seeing the children grow bigger than the father.

It is very instructive to learn the difference between savings and investments. Indians typically 'save' a lot -- as demonstrated by the savings to GDP ratio of around 30%. However, in many cases, savings do not translate into investments, which earn returns.

Leaving money in the savings account for a rainy day is not investment. Such savings are like impotent people, who are progressively eaten away by age -- and inflation.

With the development of the financial markets, there are many avenues in which savings can be easily invested to procreate. Depending on your circumstances and requirements, you can invest in equities, real estate, long-tenor fixed deposits, etc. The idea should be that the children (the interest or dividend or capital appreciation) is so large that they can support their original father -- you.

Once your passive income is enough to sustain you, you are out of the rat race.

3. Take calculated risks -- but do take them: It is not always that the best intentions produce the best results. After having saved for one year as decreed by The Richest Man in the book, his disciple gave all his money to a merchant who was to go into far seas in search of the spices. Neither the boat, nor the man returned and all the savings of the disciple were lost.

While it is important -- rather it is a prerequisite -- that you need to take some risks to earn returns on your savings, you need to be careful in evaluating the risks that you can/should take. The first thing that you need to understand is the amount of risk that you are able and willing to take. It is easy to confuse between the ability and willingness -- and this is where you will need the assistance of your financial advisor.

Depending on your circumstances, you should define the amount and nature of risks that you can take. If you are nearing your retirement and have painstakingly built your nest-egg over your working life, it is important for you to ensure safety of your principal.

Conversely, if you are young and without responsibilities, you can risk your savings for higher returns.

4. Be persistent: After losing the money with the sea merchant, the disciple wanted to give up on saving and investment, saying that it is an illusory game leading to losses and pain. The Richest Man warned him not to lose heart and to continue the process year after year throughout his life. When the disciple invested -- more cautiously -- the second time, he not only received his principal back, but also received handsome interest.

It is easy to be lost in the maze of headlines and advisors who talk about the uncertainties in the markets and their abilities to time and make more money out of it. While one can try to get that extra return by tactically optimising on the portfolio allocations, what should not be lost sight of is that the mantra to investment success is to be disciplined.

There will be shocks on the way, but it is important that your savings are working for you.

It is surprising how the logic of wealth-creation written down millennia ago is still relevant today. The British archeologist who found these stone tablets was in a debt crisis, with credit card companies knocking at his door daily. By following the simple dictates above, he not only made his life debt-free, but set out on a path to financial independence!

7 important rules of investments/trading must read

2008-02-12T20:00:00.000-08:00

The following is a list of things you want to avoid at all costs. Anyone of them can literally destroy your financial dreams and goals!

1. Trading with money you can't afford to lose

One of the greatest obstacles to successful trading is using money that you really can't afford to lose. Examples of this would be money that is supposed to be used to pay the mortgage, bills or your child's college tuition. This is sometimes referred to as "trading with scared money" and there is a very good reason for that. Ultimately what happens is that when someone knows in the back of their mind that they are risking the borrow money, they trade out of fear and emotion versus logic and no emotion. If you are in this situation we highly recommend that you stop trading until you earn enough to put into an account that you truly can afford to lose without causing major financial setbacks.

2. The need to be "certain"

We all have the need to make sure that the trade we want to make is going to be a good one. Therefore we look for signs that will give us a confirmation to enter. This can come in several forms, for example… Tuning into any Busniess Channel or the Newspapers to give us news that our script is on the move or waiting for a couple of extra days to make sure that the script is really flying and just not on a false breakout. Other traders will get opinions from friends, family or broker. Others will wait for ten technical indicators to line up and give the "green light".

All of these are okay to a point, however the big mistake to avoid is taking so much time that you let the trade take off without you. Interestingly, what ends up happening as a result of waiting too long is that you actually increase your risk. This is because as a script moves higher and higher there are fewer buyers left in the market and it can come tumbling down until more buyers step in. It is like a game of musical chairs; eventually someone gets caught without a chair.

Traders who wait and wait and wait to make extra sure are usually the ones buying the top tick just before the stocks sells off. They then beat themselves up thinking they picked the wrong script.

The thing to keep in mind is that there can be no absolute certainty in any given trade. All we ever can do is take a very educated risk along with a leap of faith!

3. Words that will kill you! HOPE---WISH---PRAY

If you ever find yourself doing one or more of the above while in a trade then you are in big trouble! As We have already said, the market doesn't give a damn. All the hoping, wishing and praying in the world is not going to turn a losing trade into a winning one. When you are wrong just use a simple 4-letter word to correct the situation-SELL!

4. Not Acting on your plan

A big source of trouble arises when a trader starts to deviate from their strategy. Maybe for a week they will trade according to one set of rules and the next use something entirely different. You must never deviate from your methodology once you start. As long as it is a good one statistically there is absolutely no reason to change it. The way to make money from it is to trade it over and over again to exploit the edge it gives

5. Not knowing how to get out of a losing trade

It's amazing how many people we have talked to who don't have any clear escape plan for getting out of a bad trade. Once again they hope, pray wish and rationalize their position. As we keep saying the market does not care what you think. It does what it does and when you are wrong you are wrong!
The easiest way to keep a bad trade from going really bad is to determine before you get in, where you will get out.

6. Having an ego

We have seen a number of individuals enter the trading game that were extremely successful in other business ventures. Because of this they had a fairly big ego and thought they couldn't fail. Their egos became their downfall because they couldn't except that they were wrong and refused to bail out of bad trades.

Once again, whoever or wherever you came from does not concern the markets. All the charm, powers of persuasion, number of diplomas or business savvy will not budge the market when you are wrong.

7. Falling in love with a sector or script

Numbers of people are always involved with a particular sector or a script. And they are of the view that this sector or script always proves Lucky for them. And they love trading in that script without managing any risk. They are so much confidant that their every trade in that particular script will always result in to a winning or successful trade. But …………

To avoid the situation after but…, never fall in love with a particular sector or stock, It can cost you dearly!

How George Soros Predicted the Mortgage Crash

2007-09-22T22:34:00.000-07:00

Though it dates from 1994, George Soros' book The Alchemy of Finance is surprisingly relevant to current events. Soros, a billionaire hedge fund manager whose Quantum Funds once cleared $1 billion in a single day, predicts exactly how the mortgage boom and bust will unfold with eerie accuracy. Better yet, his theories offer Fools a tool for recognizing future market crashes.

Gaze into my crystal ball
Within the book, Soros includes a research report titled "The Case for Mortgage Trusts," correctly predicting the rise and fall of mortgage REITs. Here's how Soros explains it.

Investors are attracted to mortgage REITs (mREITs) like Redwood Trust (NYSE: RWT) and Income Investor recommendation Annaly Capital Management (NYSE: NLY) because they pay high dividends. As a result, their shares often trade at premiums to book value.

When mREITs trade for greater than book value, they can increase earnings by simply issuing additional shares, then reinvesting the proceeds. This results in a self-reinforcing cycle: investors bid up mREIT shares because they can increase earnings and pay out higher dividends, but in turn, the mREIT can increase earnings because of the higher share price.

If you're having trouble understanding, think of it this way: Paris Hilton is famous because everyone pays attention to her. Everyone pays attention to her because she's famous. It's a cycle that feeds off itself.

Thus, the traditional approach of figuring out future earnings and an appropriate multiple doesn't make sense, because the share price of the mREIT helps determine its future earnings and vice versa. Instead, investors should try to figure out the current phase of the boom-bust cycle, which Soros describes in four acts.

Act One
The boom begins. Dividend yields are high, losses are low, and pent-up demand exists for homes from strong builders like Toll Brothers (NYSE: TOL) and DR Horton (NYSE: DHI).

Act Two
Let's get this party started! Construction is booming, and liquidity is abundant, which allows homebuilders and mREITs to leverage up. The leverage allows mREITs to increase earnings and issue more shares, which in turn allows them to increase earnings even further.

At this stage, all the factors happily feed off each other: abundant liquidity, low mortgage rates (caused by mREITs competing for business), housing price appreciation, and low loss levels. The success of the existing mREITs spawns copycat mREITs, which investors eagerly snap up.

Act Three
No one realizes it, because the music's too loud and everyone's having so much fun, but the party's almost over. The influx of new mREITs ratchets up competitive pressures. The smart ones pull back, but the less scrupulous ease their underwriting standards in order to maintain growth and market share. Toxic loans, like negative amortization and liar loans, are originated solely to be sold to unwitting buyers.

However, the cracks eventually start to show. Losses start creeping into the picture. The big investment banks, like Merrill Lynch (NYSE: MER), Goldman Sachs (NYSE: GS), and Bear Stearns (NYSE: BSC), panic, cutting off many mREITs' lines of credit. That leaves them holding the bag, and brings the party to a screeching halt.

Act Four
Everyone -- lenders, borrowers, and financers -- scrambles for the exits all at once. Investors dump their shares of mREITs, which cuts them off from both bank and equity-market financing. Many mREITs go bankrupt as a result. At this point, the factors that fed off each other to create the boom now work in the opposite direction, to hasten the bust.

History repeats itself
Like the ins and outs of the tide, the mortgage and homebuilding cycle is inevitable, given the self-reinforcing mechanisms that create the boom and then cause the bust. Soros calls this theory "reflexivity," and he's successfully applied it to equity, fixed-income, and currency markets.

Likewise, Fools should recognize how the pattern works, and try not to get caught in acts three or four. I should probably also mention that Soros wrote "The Case for Mortgage Trusts" a bit earlier than the rest of the book -- in 1970, to be exact. Fools, never believe anyone who says, "This time, it's different.

Editorial Reviews of How Buffet Does It ?

2007-09-22T02:18:00.001-07:00

Editorial Reviews of How Buffet Does It ?
Book Description
Warren Buffett is arguably the world's greatest investor. His Berkshire Hathaway stock, issued at $450 per share, is now trading at an all time high of $94,000+!

Buffett has his own unique investing style: he doesn't buy what he doesn't know, he does not time the market, and he never listens to analysts or looks at stock charts. He does not care if the market is going up or down. He advises people who can't stomach a crash not to invest in stocks. His holding period is "forever."

He is, in short, the single best investor for other investors to emulate. And his methods work for both the novice investor as well as the more seasoned veteran.

Here is some of the recommendations in the book:

* Read Benjamin Graham, but never read anything with Greek symbols

* Don't listen to analysts

* Be fearful when others are greedy and greedy when others are fearful

* Focus on not losing money rather than making it

* Why predicting market direction is NOT the key to long term success

* Don't own any stock for 10 minutes you wouldn't own for ten years

From the Back Cover

Warren Buffett's straightforward rules for long-term success

One thousand dollars invested in Warren Buffett's Berkshire Hathaway stock in 1965 would be worth roughly $5 million today! This astonishing success didn't come through Buffett's use of high-tech computer trading models, or intricate market timing systems. Instead, it came through his stubborn adherence to the time-honored fundamentals of value investing.

How Buffett Does It is a step-by-step guidebook for investing like Buffett in any market environment. This value investing primer presents and expands on 24 primary ideas Buffett has followed from day one that include:

* Choose simplicity over complexity * Make your own investment decisions * Be patient * View stocks as businesses not pieces of paper * Practice inactivity, not hyperactivity * View downturns as buying opportunities * Practice independent thinking * Ignore stock market forecasts * Be fearful when other are greedy, and greedy when others are fearful * Avoid the costly mistakes of others

Warren Buffett still lives in the house he bought three decades ago, still drives his comfortable Lincoln Town Car, and still holds to the sound and simple value investing style that helped him become one of the world's wealthiest individuals. How Buffett Does It explains, in Buffett's words as well as those who know him best, what you can do to achieve Buffett-like results in your own portfolio.
[FLAP COPY]

Warren Buffett's legendary patience and single-mindedness have helped him become one of the world's greatest investors, with a $40 billion fortune built solely on his market prowess. But what signs does he see that others miss? And more important, what can you do to follow Warren Buffett's path to financial and investment success?

How Buffett Does It examines the Buffett record and paints a surprisingly clear picture of the beliefs and principles that make up that record. Drawing from literally hundreds of Buffett quotes and maxims, this value-packed investors' guide will show you how to follow Buffett's example to:

* Seize opportunities when presented by stock market folly
* Avoid diversification, instead investing in a few enduring companies with predictable business models
* Embrace bear markets, taking advantage of the opportunity they provide to "buy when everyone else is selling"
* Think for yourself, avoiding the majority of analysts and investors think too much, trade too often, and listen to the wrong people
* Look to invest in great businesses with great management
* Beware of hidden costs, meaning everything from commissions on active stock trading to high mutual fund fees
* Invest in "old economy" businesses, boring companies that have been around for fifty years and will probably survive the next fifty
* Always search for value, and learn the keys to distinguishing a temporary setback from a fatal flaw
* Keep your head at all times, recognizing that acting on emotion can kill a stock market portfolio

Virtually every Buffett principle came into play during the Internet stock bull market. Between mid-1998 and early-2000, as cautious veterans like Buffett were laughed at for missing the boat, Berkshire-Hathaway shares lost more than half of their value. Still, Buffett refused to buy Internet stocks, quietly counseling patience, prudence, and long-term value.

When the dust cleared, Buffett was right. Again.

Warren Buffett believes that successful investing requires little more than quality research, common sense, and patience. How Buffett Does It shows you how to follow his lead, and build a portfolio that is solid, easy to understand, and designed to provide you with tremendous long-term returns without the short-term headaches.

50 commandments for a successful stock trader.

2007-09-20T08:24:00.000-07:00

1. Divide your trading capital into ten equal risk segments
2. Use a two-step order process
3. Don't over trade.
4. Never let a profit turn into a loss.
5. Trade with the trend.
6. If you don't know what's going on, don't do anything.
7. I believe increased volatility may be the easiest and most
intuitive trade in our midst.
8. Use the right order to get into the markets
9. Don't be whimsical about closing out your trades.
10. Withdraw a portion of your profits
11. Don't buy a stock only to obtain a dividend
12. Don't average your losses
13. Take big profits and small losses
14. Go for the long pull as an outside speculator
15. Sell shorts as often as you go long
16. Don't buy something because it is low priced
17. Pyramid correctly, if at all
18. Decrease your trading after a series of successes
19. Don't formulate new opinions during market hours
20. Don't follow the crowd - they are usually wrong. Majority consists
of fools.
21. Don't watch or trade too many markets at once
22. Buy the rumor, sell the fact
23. Take windfall profits when you get them
24. Keep charts current
25. Preserve your capital
26. Nothing new ever occurs in the markets
27. Money cannot be made every day from the markets
28. Back your opinions with cash when they are confirmed by market
action
29. Markets are never wrong, opinions often are
30. A good trade is profitable right from the start
31. As long as a market is acting right, don't rush to take profits
32. Never permit speculative ventures to turn into investments
33. Don't try to predetermine your profits
34. Never buy a stock because it has a big decline from its previous
high, nor sell a stock because it is high priced
35. Become a buyer as soon as a stock makes new highs after a normal
reaction
36. The human side of every person is the greatest enemy to successful
trading
37. Ban wishful thinking in the markets
38. Big movements take time to develop
39. Don't be too curious about the reasons behind the moves
40. Look for reasonable profits
41. If you can't make money trading the leading issues, you aren't
going to make it trading the overall markets
42. Leaders of today may not be the leaders of tomorrow
43. Trade the active stocks and futures
44. Avoid discretionary accounts and partnership trading accounts
45. Bear markets have no supports and bull markets have no resistance
46. The smarter you are, the longer it takes to trade
47. It is harder to get out of a trade than to get into one.
48. Don't talk about what you're doing in the markets. Silence is
golden.
49. When time is up, markets must reverse
50. Control what you can, manage what you cannot.

Source: Trading Rules: Strategies For Success by William F. Eng.

Understanding Options (Hardcover) by Robert W. Kolb

2007-09-15T00:39:00.000-07:00

Understanding Options (Hardcover) by Robert W. KolbWiley 1 edition Pages:400 January 23, 1995 ISBN:0471085545 PDF 13.5 MB It's not hard to understand why options trading continues to grow in popularity, especially among sophisticated investors with large stock portfolios. Options are a cheaper and therefore, inherently less risky way of speculating on the price movements of stocks or other under-lying goods, yet, due to their volatility, they provide more price action per dollar than do stocks. And, when traded in conjunction with stock portfolios, options can significantly enhance an investor's ability to manipulate the risk and return characteristics of their entire investment. Yet, despite these and other advantages of options, many investors shy away from this highly lucrative type of speculation because of the seeming impenetrability of many of its underlying concepts and technical principles.Now in a book that demystifies options for financial professionals, Professor Robert W. Kolb, one of the nation's leading authorities on the subject, provides readers with a solid grounding in the principles and practices of options trading. An excellent resource for investors who need to quickly get up to speed in options, Understanding Options offers a balanced presentation that builds swiftly from the most basic concepts and terms to advanced trading strategies and techniques. Written in plain English and filled with real-life examples and case studies, it schools readers in:* All essential terms, concepts, principles, and practices* Popular trading techniques and their payoffs* Option strategies* Option hedging* Formal trading models, including the Binomial and Merton models* Options on stock indexes, foreign currency, and futures* Option pricing in both the American and European markets* The options approach to corporate securities* And much more
http://rapidshare.com/files/55101761/Understanding_Options_Robert_W._Kolb.rar

The Major Japanese Candlestick Patterns

2007-09-04T10:33:00.000-07:00

There are really only 12 major Candlestick patterns that need to be committed to memory. The Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All have credible probabilities of indicating correct future direction of a price move. The following dozen signals illustrate the major signals. The definition of "major" has two functions. Major in the sense that they occur in price movements often enough to be beneficial in producing a ready supply of profitable trades as well as clearly indicating price reversals with strength enough to warrant placing trades.

Utilizing just the major Japanese Candlesticks trading signals will provide more than enough trade situations for most investors. They are the signals that investors should contribute most of their time and effort. However, this does not mean that the remaining patterns should not be considered. Those signals are extremely effective for producing profits. Reality demonstrates that some of them occur very rarely. Other formations, although they reveal high potential reversals, may not be considered as strong a signal as the major signals.

Below is the summary of the major candlestick formations and their definitions. For free print version of signal, with pattern recognition and trading psychology - Click Here Additionally, clicking on any of the individual signals will take you to the specific trading criteria plus signal enhancements and pattern recognition for printout.

A Doji is formed when the open and the close are the same or very close. The length of the shadows are not important. The Japanese interpretation is that the bulls and the bears are conflicting. The appearance of a Doji should alert the investor of major indecision.

The Gravestone Doji is formed when the open and the close occur at the low of the day. It is found occasionally at market bottoms, but it's forte is calling market tops. The name, Gravestone Doji, is derived by the formation of the signal looking like a gravestone.

The Long-legged Doji has one or two very long shadows. Long-legged Doji's are often signs of market tops. If the open and the close are in the center of the session's trading range, the signal is referred to as a Rickshaw Man. . The Japanese believe these signals to mean that the trend has "lost it's sense of direction."

The Bullish Engulfing Pattern is formed at the end of a downtrend. A white body is formed that opens lower and closes higher than the black candle open and close from the previous day. This complete engulfing of the previous day's body represents overwhelming buying pressure dissipating the selling pressure.

The Bearish Engulfing Pattern is directly opposite to the bullish pattern. It is created at the end of an up-trending market. The black real body completely engulfs the previous day's white body. This shows that the bears are now overwhelming the bulls.

The Dark Cloud Cover is a two-day bearish pattern found at the end of an upturn or at the top of a congested trading area. The first day of the pattern is a strong white real body. The second day's price opens higher than any of the previous day's trading range.

The Piercing Pattern is a bottom reversal. It is a two candle pattern at the end of a declining market. The first day real body is black. The second day is a long white body. The white day opens sharply lower, under the trading range of the previous day. The price comes up to where it closes above the 50% level of the black body.

Hammer and Hanging-man are candlesticks with long lower shadows and small real bodies. The bodies are at the top of the trading session. This pattern at the bottom of the down-trend is called a Hammer. It is hammering out a base. The Japanese word is takuri, meaning "trying to gauge the depth".

The Morning Star is a bottom reversal signal. Like the morning star, the planet Mercury, it foretells the sunrise, or the rising prices. The pattern consists of a three day signal.

The Evening Star is the exact opposite of the morning star. The evening star, the planet Venus, occurs just before the darkness sets in. The evening star is found at the end of the uptrend.

A Shooting Star sends a warning that the top is near. It got its name by looking like a shooting star.
The Shooting Star Formation, at the bottom of a trend, is a bullish signal. It is known as an inverted hammer. It is important to wait for the bullish verification. Now that we have seen some of the basic signals, let's take a look at the added power of some of the other formations.

following softwares are for technical analyses

2007-09-01T03:18:00.001-07:00

The following softwares are for technical analyses of the stock
> exchange data.
> People who really need that kind of software already know what they
> are and do not need info.
> If you need additional info please just google.
>
> All packages are tested and working flawlessly!
>
> Advanced GET 7.6 b148

>
> 15.3 Mb
>
>
> AIQ Trading Expert 7.2
>
>
> 24.7 Mb
>
>
> AmiBroker 4.8
>
>
> 5.8 Mb
>
>
> DeepInsight Pro 8.1

> 8.2 Mb
>
>
> Fibonacci Trader 4.0.23
>
> 16.5 Mb
>
>
> Equis Metastock Pro 9.1 EOD
>
> 77.4 Mb
>
>
> Metastock Plugins

> 33.5 Mb
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> Neuroshell Trader 3.8 with plugins

> 65.1 Mb
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>
> Welth Lab 4 with working plugins from versin 3

> 25.7 Mb
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> Welth Lab3 with plugins

> 32.5 Mb
>
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> >

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