Introduction to Derivatives – Part 1

WHAT ARE DERIVATIVES? – INTRODUCTION, FUTURE CONTRACTS and OPTION CONTRACTS Ever got confused looking at the terms S&P-500 JUNE FUTURES, NIFTY12MAY 5100 CE, etc? Ever wondered what are forward contracts, call options, put options? Well, these are nothing but derivative instruments traded in the financial markets. It is a form of deferred credit. These exist for stocks, indices, commodities, currencies, interest rates, weather ( yes, it is WEATHER ), freight to name a few. The world’s oldest derivative is said to be rice futures traded at Dojima Rice Exchange in Japan.  As the name suggests, derivatives are instruments which derive their value from underlying instruments which can be stocks, indices, currencies, etc. Now look at these figures to see what d... Read Full Article

Understanding ETF’s – Part 1

ETF, also known as Exchange Traded Fund has been generating a lot of curiosity in the investor community in the past few years. Indian investors are yet to discover the power of this investment vehicle and are still confused with the myths, “hidden charges” and other things surrounding it. In this article, we will try to put forward the concept of the Exchange Traded Funds. 1. What is an ETF?An ETF is a unit which tracks a particular index, fund or a commodity. It is similar to an underlying of a that index, fund or commodity. It also is similar to an equity share in the sense, it can be bought, sold, held in your demat for years just like an any other stock. The price of an ETF is again determined by the demand and supply but usually trades at around a particular % of an index... Read Full Article

Opening a Demat Account

Are you new to the world of stocks? Fascinated by the ever changing numbers and how people make a living out of it? Want to get a first-hand experience trading and investing in stocks? The first and foremost step to trading in real is getting a Demat Account. What is a DEMAT ACCOUNT? Demat account stands for “Dematerialised Account”. Earlier shares were held on paper but after dematerializsation they are held in the Demat account. Can I trade without a DEMAT ACCOUNT? No, you can not trade or invest in stocks without a DEMAT Account.  Whom can I open a DEMAT Account with? You can open a demat account with any stock broker and even with some banks who provide these services. They are known as Depository Participants (DP). What are the requirements to open a DEMAT Accou... Read Full Article