Change in Lot Size for Nifty, Bank Nifty and NSE Securities

Recently NSE released a circular stating a change in the lot sizes. Kindly go through the following email to keep yourself updated with the changes and the steps to be taken.

What was the official communication?

The lot size of NIFTY, BANK NIFTY and some Futures stocks will be revised as per the NSE Circulars dated August 07, 2015 and August 14, 2015. These circulars include an Index Lot Size Change Circularthat talks about the old and revised lot sizes for indices and a Stocks Lot Size Change Circular which gives a comprehensive list of all stocks whose lot sizes have changed. Continue reading

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Spread Orders: The Smart Way of Hedging Positions

spread orderIntroduction
Futures are a risky matter. So much so that even the veteran players are worried about taking a hit (loss) and as a matter of fact, they often do. Paul Tudor Jones, one of the most successful futures traders on the Dow indices, said never to focus on the money that you are making but to focus on the money that you are losing. The money that you have at risk is at the center of any successful trade strategy. Continue reading

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Stop Loss Orders Made Easy

Stop-losses are the easiest and simplest way at protecting yourself form falling bottomlessly in a bad market situation. They can be applied on a bought or short sold instrument and can be modified at any point of time in a single day as they are day orders. We wrote this blog to help you understand stop-loss orders better. Read on to find out how it works. Continue reading

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Cover Orders Explained

COVER ORDERs Explained

Market orders have always been a vulnerable affair, to an extent for the equities and a great deal more for Futures and Options and in that volatility, we are always looking for some “Cover”, some sort of safety net that can protect us from a free-fall. That is exactly what a cover order does. Continue reading

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Circuit Breakers – Traders’ Safety guard

Circuit BreakersA circuit breaker is a fundamental concept wherein trading is frozen for a few hours, or in a worst case scenario, the day’s trade is suspended for a stock if its value increases beyond or decreases below a predetermined value, which is calculated based on the previous day’s closing price. Circuit breakers are specific to exchanges, wherein, the percentage change in value after which it gets activated varies with stock exchange while some stock exchanges may not even have this concept. E.g., Bombay Stock Exchange has an upper circuit breaker of 20% and a lower circuit breaker of 10%. If a security closes at Rs.200 on a day and if the stock reaches Rs.240 on the next day, then the circuit breaker is auto activated and trading of that stock is halted. Similarly, if the stock falls to Rs.180, again trading is halted. Continue reading

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Bracket Orders and Trailing Stop-loss Explained

Bracket Orders

The world moves too fast and is often too difficult to keep track of. Markets move even faster and in all this turmoil, bracket orders come as a great boon in managing your risks. As the name goes, Bracket orders “bracket” your “orders”. However stupidly simple that may sound, that’s what it actually is.

Benefits of Bracket Order

  1. Bracket orders make sure that your profit or loss lie between two limits of an acceptable profit and bearable loss that you set.
  2. Because the maximum loss is limited,the margin requirements are really low (between 2% and 2.5%) compared to the 10-11% margin requirement in other risk based trades.

Continue reading

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Collar Strategy

It remains a well-known thing that the derivatives are wonderful instruments to take advantages of the different phases in the markets. They not only offer leveraging advantage but also ensure efficient hedging opportunities in the overall portfolio. Let us discuss one such options strategy which not only hedges a naked long position against downside risk by offering insurance but also finances the cost of that insurance. Sounds interesting? This strategy is termed as a Collar; let’s drill down into the strategy for a better understanding. Continue reading

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