Online Trading India

The great mathematician Euclid once said that “there is no royal route to geometry”. The same applies to  stock market  trading too. There really is no quick and easy royal route, but there is certainly a disciplined route to  learn stock trading . Here is how you can go about it. Remember the basic premise that to learn stock trading, there is nothing like the real thing. So start by opening your  online trading account . You can never get the pulse of the market unless you trade your own money. How to start trading effectively in the stock market?  It all begins with opening a  online stock broking account  and  demat account . As mentioned earlier, there is nothing like the real thing. Simulation only works up to a point. Find a good online  stock broker  and  open an account . Become familiarized with the layout and free trading tools and education offered to clients. That is the place to start. There is a lot of knowle...

Financial Harvesting! Just we have passed the crop harvesting season and its time to think of tax harvesting now. As we are nearing the financial year end, we are left with just few days to plan our tax. If you have not planned your tax yet, and are puzzled how to do it especially in the light of the proposals in Union Budget 2020, we present you one way to explore tax saving options and that is Tax Loss Harvesting. What is Tax Loss Harvesting? While investing in stock , all of us are bound to have some laggard in our portfolio where our hard earned money will be blocked due to negative returns from that stock. Many are left with no option but to hold on to the stock till it turns to be a profitable one. Tax loss harvesting is one tool wherein the stocks that are in loss in our portfolio can be sold and the loss can be set off against capital gains and reduce the tax outgo considerably. The short term loss from stocks can be adjusted against both the short term capital ga...

When dividend distribution tax (DDT) was introduced more than 20 years ago, the markets were shocked. Over the years, markets have not only adjusted to it but actually created tremendous wealth over the years. In a way, it was a positive move. It dissuaded companies from paying out heavy dividends and coaxed them to reinvest in their business. This led to a capital investment driven rally in the new millennium and that ran all the way to 2008. In the Union Budget 2020, the DDT was abolished and replaced by the withholding tax that individual  investors  will have to pay on their dividend incomes. Here is how it actually works and here is how it will impact the markets. How the DDT works currently and how it will work now? In India, DDT is applicable to equity and to equity funds. Currently, companies are required to pay DDT on the dividend paid to its shareholders at the rate of 15% plus applicable surcharge and cess (effective tax rate for DDT is 20.56%) in additi...

The Delhi assembly elections have come and gone and the outcome was largely on the expected lines. The ruling AAP returned to power with a big mandate although the NDA did manage to grab more seats and also increase its vote share. Let us look at the impact of the outcome of the Delhi elections on the stock markets and how to interpret the outcome. Outcome of Delhi elections and the impact on markets There was some negative reaction to the exit polls that predicted a clear victory for the ruling AAP government. All the exit polls were virtually unanimous about the outcome although the actual numbers estimated did differ. In the aftermath of these polls, there was some disappointment in the markets as there late expectations that NDA could make a sharp comeback in the Delhi elections. However, the impact after the actual outcome was not very sharp and for the markets it was business usual. The limited disappointment after the exit polls had factored in the negatives and hence ...

The word geopolitical is either misunderstood or not fully understood by most people. It is actually about the impact of global politics and global international relations on the  stock markets . Geopolitics is extremely important as the markets globally get interconnected. For example, when Lehman happened, the entire global trembled. Similarly, when the US and Iran got close to a war in Middle East, it had its impact on oil prices on stocks. When Europe was on the brink of default in 2011, it roiled global bond markets and also equity markets went into a prolonged slowdown. Let us understand these geopolitical factors in much greater detail and how exactly they impact the stock prices. Geopolitics essentially refers to different geographic influences on political and international relations. The virtually seamless interconnection between world markets helps in the transmission of the impact quite fast as we have seen time and again in the past. Here are some major geopoli...

Stock Marketing  It is hard to define a slowdown but the macroeconomic definition is that 2 quarters of continuous fall in growth or four out of six months of fall in growth is defined as a slowdown. The paradox today is that the growth has been on a consistent downtrend over the last six quarters. In addition, high-frequency indicators like IIP growth and core sector growth have been in the negative zone for 3 months in succession. However, in the midst of this economic weakness, the  Nifty  and the  Sensex  have been hitting new highs. What explains this paradox and what should investors do? Let us take a look at the GDP numbers first. GDP touches 4.5% in the September quarter (Data Source: MOSPI) Since the middle of 2018, the GDP growth has almost halved. The growth rate has fallen steadily due to a mix of weak consumption and limited private investment. The tax cuts have been instrumental in making Indian companies more profitable but then top-line...

Online Trading In India  At Tradeplus, working for your best interests has always been our top most priority.  As events of the past year have underscored, it is not how big you are that counts, it is how well governed you are that matters the most . And good governance is at the core of every facet of our service at Tradeplus and here’s how we do it. We don’t have propriety business . This means we don’t trade in our own accounts. Almost all the large brokers in India run propriety desks where they trade on their own account. For us all along our 20 years in this business we have always had the philosophy of 3T’s – Trust, Transparency and Technology and YOUR best interests has been the only thing that have mattered. First ones to get Margin trade funding license from SEBI:  When most of the top brokers have set up Non Banking finance companies (NBFC) arms for margin funding, we looked the other way and obtained a SEBI license to provide Margin Trade funding (...

NRI Online Trading A non-resident typically has income in foreign currency and normally invests in India. For an NRI does not look at purely equity returns but also the currency returns. In fact currency fluctuations can leave a deep impact on the NRI equity returns. Let us look at four such cases. If an NRI has invested in India and earned returns of 12% on equity, what would be his effective returns? It would depend on the currency movement. If the Indian rupee lost 6% against the US dollar, then the NRI would have earned effective dollar returns of just 6% (12% – 6%). On the other hand, if the rupee appreciates, the NRI stands to benefit. Extending the above case, if the rupee had instead appreciated by 4% what would have happened. He would have actually earned 16% (12% + 4%). That is why NRIs investing in India always prefer a strong currency in India. That is the reason, most NRIs prefer to invest into India at a time when the rupee has weakened and there are hope...

Investment Can you have a long term strategy based on just passive indexing? No worries about active selection and portfolio management. Let us first understand what indexing is all about. What is an index fund all about? An index like the  Nifty  or the  Sensex  which is representative of the overall market forms the basis of an index fund. In India, most indices are broad-based and weighted based on floating stock. That means a company with more floating stock will get a higher weightage. While the SENSEX consists of a group of 30 stocks, the NIFTY consists of a group of 50 stocks. Let us now understand what an index fund is all about? An  Index fund  is a mutual fund that benchmarks an Index and invests its entire corpus in the same proportion of the composition of that index. For example, if RIL and HDFC Bank have a weightage of 4% and 5% in the Nifty then the Nifty index fund will buy these stocks in the same proportion too. Investing in an...

Online Trading India The derivatives market started in India quite late. It was only when the erstwhile Badla and the ALBM were banned in India that  online trading  in derivatives were introduced in India in 2001. While the early years were quite insipid, the momentum really picked up post 2004. Currently, if you look at the daily turnover, the future and options trades account for over 95% of daily turnover with cash equity accounting for less than 5%. Futures versus options Futures are a lot more straightforward. You try to leverage positions with a small margin and either buy or sell futures depending on your view in the market. Profits and losses can be unlimited irrespective of whether you are trading on the long side or on the short side . That meant that futures were still risky. That is where options became so popular in India. Options are a right without an obligation. A right to buy without an obligation is a call option whereas a right to sell without an ...