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Showing posts from January, 2019

A Quick Understanding About Forward Contracts & Option Contracts

A Quick Understanding About Forward Contracts & Option Contract s So in the previous posts we have discussed what derivative contracts are and some important terms related to derivatives. In this post we will discuss about the types of derivative contracts. Basically there are two types of derivative contracts. 1.Forward Contract   2.Option Contract   1.Forward contract A forward or future contract is the simplest form of derivative transaction. Normally in this type of transaction there is an agreement to buy or sell certain quantity of underlying asset at a certain price on a specific date. No cash is exchanged while entering into the contract. Interestingly there is a difference between “no cash” and “margin money”. You have to understand that in forward contracts you must have required margin money in your account. But at the same time you don’t have to pay any cash out of your pocket for the contract. It is only the decrease of the price of the asset which will be debited fr

What are Derivatives and some important terminologies in Derivatives?

What are Derivatives and some important terminologies in Derivatives? Many people wonder what is derivative, what is futures and options, how much risky they are and can we make profit from them. The one answer is “Yes” but terms and conditions applied. You need education, patience, practice to get this yes. If you are doing these three things then I believe you can earn from stock market. For education I’m starting a series of posts where I’m going to discuss some basic knowledge about stock market and today our topic is “Derivatives”. Also Read, How To Use P/E Ratio In Selection Of Stocks   How To Use EPS In Selection Of Stocks?   5 Things That will Decide The Future Of Stock Market   A derivative is a security which value is normally derived from the value of another underlying asset. This asset could be equity, commodity, forex or any other asset. In now-a-days more complex and hybrid derivatives are coming to the focus in which asset underlying are loan, weather, monsoon, mortgage

5 Things Which Will Decide The Future Of Stock Market Of India in 2019

5 Things Which Will Decide The Future Of Stock Market Of India in 2019 It is well said, “Without a plan, you can’t win a war.” Similarly, if you are a participant in the stock market then you’ve to be prepared for all kind of situations. Sometimes the opportunity will come to tap whereas sometimes threat will come which must be avoided. In 2018most of the stock markets in the world remain in sideways for the first half of the year and a correction had happened in the second half of the year. So in this post, I’m going to discuss 5 most important things to watch in the stock market which will decide its future in this year and in coming years. Also Read How to us EPS in fundamental analysis? How to use P/E ratio in fundamental analysis?   Top 8 Dividend Paying Stock In India    5. Economic Survey and Interim Budget of 2019 We all know a country’s economy has a major role to play the direction of the stock market. It may be the macro-economic activity or micro-economic activities, the

Why SIP is Better Than Traditional Investments like Fixed Deposits Or Recurring Deposits?

Why SIP is Better Than Traditional Investments like Fixed Deposits Or Recurring Deposits? Hello friends, wish you all and your family a very very happy new year. I hope this year will fill your life with happiness and wealth. Make sure to take care of your health, that's something more important than anything else in this world. So friends this year first post will be related to the reasons why SIP are a better option than traditional investments like fixed deposits, recurring deposits, national saving certificates or any kind of term deposits plan. Let's start. Read Also 6 Thing You Should Know Before Starting A SIP How Much Time Should You Give To SIP Top 10 Indian Companies What is SIP? SIP is acronym of systematic installment purchase. It is nothing but a kind of indirect investment in a stock market with a pre-defined order which is given on a specific date and time each month. SIP is better than direct investment in the stock market because of few genuine reasons. First,