Showing posts with label call put. Show all posts
Showing posts with label call put. Show all posts

Market moov ahead

Yesterday market again go in heavy selling specially in reality and capital goods sector like infra metal etc.here we look at market movement index and price fall of some specific stock falling more then 10-15% in a day or someone crash around more then 25% in price .

Yesterday also in Malaya press conference com out that KFA not going to ask for bailout they just need extra loan as working capital here we look and see what future ahead for aviation sector .

Aviation sector is in bad situation where growth in passenger rise by more then 15% in a year by year but still we see due to competition in price war still same as 10 years before or may be less .fuel ATF up by almost 700% during that session and operating cost for an airline company fuel share almost 50% now so until this war is not stop and risen in fare not manage to hold airline profit because as international concern price of ATF looking nearby and not guessing a sharp fall here.

what to do with aviation stocks looking bad and not to invest eight er it will affect banking NPA and more sector will join like aviation in future so bad time for banking also.

Recent comment by RBI insisting that sector like infra,telecoms,aviation and reality still pain to come due to high interest rates and heavy debt burden which affect banking also so stock market is not looking good time ahead and we must wait for three month in Indian capital market to invest .
Investor watching where nifty trade price of some mid cap stocks at life low even nifty is much higher then in 2007 but price go below this level so where nifty go down ,by pricing of stock its not looking nifty go down then 4500 levels and this is the worst in Indian market .

investor be cautious from stock like i mansion in previous to avoid heavy lose as FII comment or downgrade any stock price of stocks go down almost 40% from current price be caution to trade and sit on cash for long term investment .

Market today

Today market looking to start with positive bias with global indices trading higher yesterday dowjones manage to close 200 gain and positive start in asia also ,sgx nifty trading around 5350 giving a positive start in indian stock market too.

Trader should be cautios to take long position now betterto trade intraday only with stoploss ,today indian oil rise petrol price with 1.87 rs. perlitre giving a fire to high inflartion in future ,it is concern of worry for central goverment how to manage inflation and balancing growth with higher intret rates .

Nifty trader sell nifty around 5370 with stoploss of 5490 for target price of 5313 for intraday.long term invetor also short a lot of nifty around 5370 and sell a lot of 5300 put and stay away for 10 days got handsome return of thier investment stoploss for this trade if  nifty touch and cross 5500 mark.

NIFTY 6500

Market up after touching a low of 5180 nifty in june 2011 shoot up 400 point with huge buying across the board in banking ,metal and fmcg sector at expiry.
 i wrote befor a upmoov in nifty before seems FII moov continue buying movement and nifty can go up to 5800 in july as quarter result comeout as market expect a down in sales and profit margin in company already discounted to price.
 My feeling nifty may be break its all time high incoming three month and may be surprised nifty touch 6500 levels, investor can buy stock with good fundamental and strong revenue growth for long term investment .

the outlook for indian market for two year is very strong and indian market soon lead asian growth as consumable numbers.

How to earn money in stock market


Stock market
In India two stock market exchange working one is national stock exchange (nse) and Bombay stock exchange (bse),currently both stock exchange working on each broker but mostly doing trade in nse


On nse trading in equity and derivative segment during 9.15 am to 3.30 working
Also a pre open session start on 9 am till market opening indicate price only
Equity in cash section on shares and in derivative segment future and option trade
First we have to understand what is a future trading 

Stock future

In stock future nse include some company for future trading in this company nse decide a fixed lot of quantity investor can book each lot for a settlement period ended ,at the end of settlement all future for series square off, generally settlement completed at the end of last week Thursday,
Investor get advantage in stock future with a margin price around 10 -15%of total value of (i.e. reliance industries `future of 250 share current price at 900,total value 225000)investor can book a future of reliance around 40-50 thousand rs.
Investor also forward his future before expiry to another settlement,

Stock option

In option investor get a strike price at some premium ,he get advantage of total stock future ,during settlement period he get full premium of (stockprice –strickprice)

Option has two divisions
  1. call option : a call option is indicate and benefit when stock price move on upward bias
  2. put option: a put option is indicate and benefit when stock price on downside move
investor can also sell these option too to get premium because as settlement near to expiry premium reduce and at end of expiry it goes nil if stock not cross a strike price but on sell side investor get small premium and a heavy risk factor occur

example: for better understand the option trade I make an example here

reliance industries ltd. Cmp.940rs. call for 960 rs have premium of 25 rs on first day of settlement if reliance trading near the price for 10 trading days then premium comedown near to 8-10 rs ,premium rise if reliance go upside to 960 within 3-4 trading days and more benefit if it goes up\ more then 960 for buying a call  if reliance close 1020 on expiry  buyer of 960 call get a 60 rs. As premium but if reliance close 960 then call buyer get nothing even he buy 960 call when reliance traded at 940 so basic in option is value of time ,same pattern happen in put option but it benefited for buyer if price goes downside, we can say reversal of call option



I suggest investor always study deeply before trading in option market because in option market time is money so please again first understand theory of option first .