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A lot of factors influence an option's pricing, which can benefit or hurt traders depending on their positions. The "Greeks" are a set of risk metrics named after the Greek letters that identify them, which reflect how sensitive an option is to time-value decay, changes in implied volatility, and movements in the price of its underlying security. Theta, vega, delta, and gamma are the four basic Greek risk measurements. Here's a closer look at each. Before we begin… Options trading can be extremely profitable if done with the right trading system and with discipline. However, you need to back up your strategy with the best Indian trading platform like Zebull from Zebu. We provide one of the lowest brokerages for intraday trading and are one of the top brokers in the share market right now. And we would love to help you with your options strategy execution. Why option Greeks For the uninitiated, options can be exercised, or converted into shares of the underlying asset, at a set price. Every option has an expiration date and a premium connected with it. One of the most popular option pricing models is Black-Scholes, which leads to price fluctuations. Greeks are frequently viewed alongside an option price model to properly assess risk. Volatility Volatility refers to how much an option's premium (or market value) changes before expiration. Financial, economic, and geopolitical risks can all create price changes. Implied volatility measures the market's expectation of price movement. Investors use implied volatility (or implied vol) to forecast future price movements in a securities or company. If implied volatility is predicted to rise, the premium on an option will likely rise as well. Profitability Several words describe a profitable or unprofitable option. The intrinsic value is the difference between the strike price and the price of the underlying stock or asset. At-the-money options have the same strike price as the underlying asset. An in-the-money option has a profit because the strike price is higher than the underlying price. In contrast, an out-of-the-money option has no profit when compared to the underlying's price. In the case of a call option, the underlying price is less than the strike price. A put option is OTM when the underlying price exceeds the strike price. Influences on an Option's Price Assuming other variables stay constant, an increase in implied volatility increases an option's price. Traders that are long or short will have different returns. If a trader is long a call option, increased implied volatility is beneficial since it increases the option premium. For traders holding short call options, an increase in implied volatility has the opposite (or negative) effect. A surge in volatility would not assist a naked option writer because they want the option's price to fall. Writers are option sellers. If a writer sells a call option, the buyer will exercise the option if the stock price rises above the strike. That is, if the stock price rose enough, the seller would have to sell shares to the option holder at the strike price. Sellers of options are compensated for the risk of their options being exercised against them. This is called shorting. A decrease in implied volatility, shorter expiration time, and a decline in the underlying security's price favour the short call holder. Increasing volatility, time left on the option, and underlying will benefit long call holders. Indicated volatility decreases, time till expiration increases, and the price of the underlying security rises for short put holders, whereas long puts profit from an increase in implied volatility, time until expiration increases, and the underlying security price decreases. During the life of most option deals, interest rates play a little influence. Its impact on an option's price is measured by rho, a lesser-known Greek. Generally, higher interest rates make call options more expensive and put options cheaper. All of this sets the stage for examining the risk categories used to assess these variables' relative impact. Remember that the Greeks help traders forecast price fluctuations. In this article, we have laid a foundation on what moves an option price. In the next article, let’s take a closer look at the different Greeks in an option. At Zebu, we strive to provide our customers with the lowest brokerage for intraday trading. Zebull is our proprietary trading platform that lets you analyse option greeks to perfection and is growing fast to become the best Indian trading platform. As one of the top brokers in share market, we believe that we have the right products and features to help you make the best trades. Please get in touch with us to know more.

Every day, thousands of traders and investors participate in the capital markets. All of the participants' primary goal is to make a profit. To trade in the stock market, you can use a variety of techniques and strategies. A trading strategy, on the other hand, becomes applicable only if the asset's price moves in a favourable direction. Arbitrage is a unique but simple method of profiting from the capital markets. Before we get into arbitrage trading… To do any form of trading, you need a reliable brokerage trading firm that gives you thebest stock trading platform that helps you analyse the right trading opportunities. Zebu gives you one of the best online trading platforms in the country with a fast-growing customer base. Please get in touch with us to know more. What exactly is arbitrage? To understand how arbitrage works, it is essential to first define arbitrage. Arbitrage is defined as the simultaneous purchase and sale of the same asset in different markets in order to profit from the price difference in both markets. While arbitrage opportunities can arise in any asset class that is traded in different markets in a standardised form, currency and stock markets are the most common. Arbitrage opportunities are frequently fleeting, lasting only seconds or minutes. Contrary to popular belief, markets are not completely efficient, creating arbitrage opportunities. As you may know, the price of an asset is determined by the supply and demand for it. A price difference arises as a result of a difference in supply and demand for an asset in different markets, which can be used for arbitrage trading. What is the process of arbitrage trading? As mentioned earlier, arbitrage trading is based on the trader's ability to capitalise on the price gap of the same asset in different markets. Because arbitrage opportunities are limited, most traders use algorithms to execute arbitrage trades. Let us look at a stock market example to see how arbitrage works. Assume XYZ is a stock that is traded on the National Stock Exchange and the New York Stock Exchange. On the NYSE, the price of XYZ is quoted in US dollars, while on the NSE, it is quoted in Indian rupees. On the NYSE, the share price of XYZ is $4. The share price on the NSE is Rs 238. If the USD/INR exchange rate is Rs 60, the NYSE share price of XYZ in INR will be Rs 240. If the USD is converted to INR, the same stock is quoted at Rs 238 on the NSE and Rs 240 on the NYSE. To take advantage of the arbitrage opportunity, a trader will purchase XYZ shares on the NSE at Rs 238 per share and sell the same number of shares on the NYSE for Rs 240, earning a profit of Rs 2 per share. While participating in arbitrage trades, traders must consider certain risks. The price difference is the result of a favourable exchange rate, which is constantly changing. Any significant change in the exchange rate while the trade is being carried out can result in losses. The transaction fees are another important factor to consider. If the transaction cost exceeds Rs 2 per share, the price gain will be lost. In India, how does arbitrage work? There is a scarcity of companies that are listed on both the Indian and foreign stock exchanges. However, India has two major exchanges—the BSE and the NSE—and the majority of companies are listed on both, creating an opportunity for arbitrage. Even if the price of a particular share differs between the NSE and the BSE, an arbitrage trade cannot be conducted. On the same day, traders are not permitted to buy and sell the same stock on different exchanges. For example, if you buy XYZ shares on the NSE today, you cannot sell them on the BSE the same day. So, how exactly does arbitrage work? One can sell shares that he or she already owns on one exchange and buy the same amount on another. For example, if you already own XYZ shares, you can sell them on the BSE and purchase them on the NSE. If you already own the stock, you are not engaging in an intraday trade on different exchanges, which is not permitted. Conclusion Because the price differential does not last long, automated systems are commonly used for arbitrage trading. Though spotting arbitrage opportunities is simple, profiting from them manually is extremely difficult. As we mentioned earlier, arbitrage trading needs the best online trading platform for you to instantly capitalise on any price difference between NSE and BSE. Zebull from Zebu is the fastest growing and best stock trading platform that comes with a mind-boggling number of features to help traders. Zebu is also becoming the fastest-growing brokerage firm in the country - please get in touch with us to know more about our products and services.

Hedging is a beneficial investment strategy that every investor should know about. Hedging in the stock market provides portfolio safety, which is often as important as portfolio growth. Hedging is commonly discussed but not explained. But it's not a mystical term. Even a novice investor can benefit from learning about hedging. Before hedging When it comes to trading and investment, you need to choose the right one from a plethora of brokerage firms . One of the important factors you need to look for while executing hedging strategies is the lowest brokerage and someone with a fast-growing online brokerage background. Hedging Consider hedging as a type of insurance. By hedging, people protect themselves from the financial consequences of an unfavourable event. This does not stop all bad things from happening. However, if a negative event occurs, properly hedged, the damage is lessened. Hedging happens very universally. For example, buying a homeowner's insurance protects you against fires, burglaries, and other unanticipated events. Portfolio managers, investors, and organisations employ hedging to decrease risk. In the financial markets, hedging is not as straightforward as paying an annual insurance premium. Hedging investment risk involves strategically using financial instruments or market tactics to offset price risk. Traders hedge one investment by trading in another. To hedge, you must conduct counter-trades in securities having negative correlations. Of course, you must still pay for this type of insurance. For example, if you own XYZ stock, you can buy a put option to protect your investment from large declines. However, to buy an option, you must pay a premium. Less risk means less possible profit. So, hedging is a practice used to decrease prospective losses (and not maximise potential gain). If the investment you're hedging against is profitable, you've usually lowered your prospective profit. If the investment fails, your hedging will have decreased your loss. Hedging Explained Derivatives are commonly used in hedging strategies. One of the most common derivatives is options. In trading techniques involving derivatives, a loss in one investment is compensated by a gain in another. Assume you hold Tata motors stock. You believe in the company's long-term success, but you are concerned about recent losses. Put options let you protect yourself against a decline in CTC by selling it at a predetermined strike price. This is called a married put. If your stock price falls below the strike price, the gains from the put option reduce your losses. Hedging Drawbacks Every hedging approach has a cost. So, before you utilise hedging, consider whether the possible benefits outweigh the costs. Hedging is used to safeguard against losses, not to create money. The cost of hedging, whether it's an option or lost earnings from a futures contract, is unavoidable. While hedging is similar to insurance, insurance is more precise. With insurance, you are fully paid. Portfolio hedging isn't exact. Things can get unpredictable. The perfect hedge is a goal that risk managers strive for but rarely accomplish. Hedging and You Most investors will never trade a derivative. In fact, most long-term investors overlook short-term volatility. Hedging has little value for these investors because they let their investments expand with the market. So why hedge? In order to understand how it works, you should hedge your own portfolio. Many large corporations and financial funds will hedge their protfolio. Examples of hedges include oil companies. For example, an international mutual fund may protect against currency swings. Understand and assess these investments with a rudimentary understanding of hedging. Forward Hedge Example A wheat farmer and the wheat futures market are two examples of hedging. The farmer sows in the spring and harvests in the fall. In the interim, the farmer faces the danger of decreased wheat prices in the fall. While the farmer wants to maximise his harvest's profit, he does not want to bet on wheat's price. At the present price of $40 per bushel, he can sell a three-month futures contract. It's called a forward hedge. After three months, the farmer is ready to harvest and sell his wheat at market price. It is now only $32 per bushel. They buy wheat for that price. Simultaneously, he buys back his short futures contract for $32, netting $8. His wheat sells for $32 + $8 hedging profit = $40. When he planted his crop, he locked in the $40 price. Assume now that wheat is $44 a bushel. Sells his wheat at market price and buys back his short futures for $4. His net profit is $40 ($44 - $4). Both his losses and gains are reduced. The Verdict Investing involves a certain amount of risk. A fundamental understanding of hedging methods can help any investor understand how corporations and investors protect themselves. Whether or not you decide to start using complex derivatives, learning about hedging will improve your market knowledge and make you a better investor. At Zebu, we are one of the best brokerage firms in the country. We provide one of the lowest brokerages and are becoming one of the most sought-after online brokerages in India. Please get in touch with us to know more about our services and products.

On Wednesday, India's benchmark 10-year government bond yields soared to a high of 6.66 per cent before falling to 6.60 per cent. What has caused this increase? Rising crude oil prices, inflationary threats, and earlier-than-expected interest rate hikes indicated by the US Federal Reserve have all contributed to bond yields hardening. Rising bond yields, logically, have sparked anticipation that the Reserve Bank of India (RBI) may eventually abandon its accommodative policy and begin increasing interest rates. What is the difference between a bond and a bond yield? Bonds are simply loans made to a firm or the government. Throughout the loan's term, the interest payments are virtually unchanged. Furthermore, if the borrower does not default, the principle is returned after the loan term. Bond yield is the rate of return that an investor receives on a certain bond or government instrument. Bond yields and prices are linked. Bond prices rise and fall in response to changes in interest rates in an economy. Bond yields, on the other hand, fall/rise in response to this. Bond yields and inflation expectations As money moves from relatively safer investment bets to riskier equities, a stock market boom tends to raise yields. When inflationary pressures rise, however, investors tend to return to bond markets and sell shares. What impact do bonds have on stock markets? Before we get into how the share market is impacted by bonds and bond yields, you need one of the best trading accounts from a leading online stock broker like Zebu to capitalise on market changes. With a leading online trading platform, you can anticipate market moves and maximise your profits. More on how bond yields affect the stock markets: To calculate the expected rate of return, investors add the equity risk premium they seek to a risk-free rate when pricing equities. Defaulting to the long government bond yield is usually the simplest way to estimate the risk-free rate. Long bond yields are important to equities because of this. Given that the risk-free rate is the long bond yield, a higher bond yield is unfavourable for equities, and vice versa. However, it's important to recognise why bond rates are changing, not just the direction in which they're changing. Long bond yields reflect the economy's growth and inflation mix. Bond yields normally rise when growth is robust. They also rise in response to rising inflation. However, the impact of these is different for stocks. When growth is strong, the positive impact of larger cash flows or, more accurately, dividends more than outweighs the negative impact of higher yields, resulting in higher equity share values. The difference between actual GDP growth and the 10-year bond yield corresponds well with stock prices. Indeed, share prices should be fine if GDP increases faster than bond yields in the next month. If growth accelerates from here equities are likely to break this range on the upside, in line with the fundamental relationship. How Should Investors Play It? In the scenario that growth accelerates, investors can opt for rate-sensitive instruments like mid- and small-cap stocks and funds. However, if inflation makes a rapid return, you can go with reliable companies in solid sectors like technology, healthcare and FMCG. Whatever your take is on bond yields and their correlation to the Indian markets, you need the best online trading platform to change your game plan. At Zebu, we have taken our expertise as one of the leading online stock brokers in India and created the best trading accounts and investment platform to seamlessly capitalise on any economic macro and invest in the best stocks and funds that you find reliable. To know more about our products and services, please get in touch with us.

Since March 2020, when the stock markets plummeted, asset values have rebounded at a similar rate. What develops is a type of agreement that, regardless of short-term blips, equities do well in the long run. While the volatility persisted into 2021, it also demonstrated that the stock market is not just a home for the bulls and that prices do fall. So what moves up the prices of stocks? Corporate earnings and growth prospects in the years ahead are what ultimately drive equities asset prices. Current valuations appear to be on the high side, and many companies' input costs are under pressure. However, truly valuable companies come with good promoters and a sound business fundamental and are always good investments in the long run. Here is how you can diversify your investment across multiple asset classes to build over wealth over a long period of time. Before we start… Before investing a lump sum in your portfolio, make sure to have an emergency fund that covers the basic health and life risks for your family. This way, your family can stay financially secure in any emergency. It is also important to apply and obtain enough health insurance for every member of your family. You can also choose a term insurance plan that covers at least 15 times your annual income and reassess it every five years or if new financial obligations arise. Another thing to keep in mind is to choose the right investment partner for your financial objectives. Zebu is one of the leading share market brokers for online share trading. Get started in a few minutes with us to own one of the best trading accounts in India. Fixed Incomes The fixed income asset class, which is the most popular among Indians, is one of the most trusted and oldest types of investments. Two examples are fixed deposits and public provident funds (PPF). Is this, however, a sound investment? You're simply allowing the bank to borrow money from you under the terms of capital protection, pre-agreed returns, and liquidity. You will not lose money if you invest in fixed income asset types because they have no risks. Furthermore, you receive consistent profits as promised at the time of investment. Fixed income plans may offer yields of 7% to 8%, but they are hardly inflation-beating rates. Fixed income plans only provide security and are subject to STCG or LTCG depending on the term. SIPs Start SIPs (systematic investment plans) in a few equities mutual funds with a good mix of large, mid, and small-cap schemes. When you have a large sum of money to invest, put it into your current folios. Also, take advantage of market dips to add extra shares to your roster. Importantly, diversify among stock, debt, and gold to maintain asset allocation and avoid switching from one asset or scheme to another based on short-term performance. You can put funds in a liquid fund and migrate them to equity schemes at periodic intervals using the STP (systematic transfer plan) technique. These strategies assist in taking a managed approach and regularly subjecting your funds to the prospects of the equity market for a better risk-adjusted return. Depending on your risk profile and the general economic climate, a portion of your portfolio can also be invested in sector-specific funds such as pharma and IT funds. Mutual funds A mutual fund is managed by an analyst or fund manager who handles the money from multiple investors and invests it in stocks, bonds, and short-term debt. The mutual fund comprises stocks from various market segments that the fund manager deems well-performing. And shares of the mutual funds are purchased by investors. With every share you own, it is a representation of the fund's ownership and revenue. Mutual funds are seen as a relatively risk-free tool for investors to diversify their portfolios. Debt funds Debt funds are mutual fund schemes that are focused on fixed income instruments such as government and corporate bonds. In these finds, your capital is relatively safe and you also earn a small interest on it. Debt funds now include floating rate bond funds. These are debt instruments whose interest rates vary with the value of the underlying instruments. These can be chosen by investors for goals that are at least three years away. Gold Over the last year, gold has remained nearly unchanged. However, in light of growing inflation, one can consider a 5-10% exposure in their portfolio. You could invest in gold using sovereign gold bonds rather than physical gold. Depending on your risk appetite and capital, you can tap into a sea of investment options that are right for you. At Zebu, we complement your financial goals with the best trading account we can give you. We are one of the leading share market brokers in the country and come with a wide range of products and services to help you make the right financial and trading decisions. We give you the ideal platform for online share market trading as well for the risk-taking individuals. To know more about our products and services that will help you maximise your returns across all asset classes, please get in touch with us now.

You conduct research, select a mutual fund plan that meets your aims, budget, perform all kinds of analysis, and then invest in a mutual fund scheme. Then, when the investment period comes to a close, you can reap the rewards of capital growth. It is as simple as that, right? Not always. Investing in a mutual fund entails more than just putting money into it and waiting for it to pay off at the end of the investment term. To truly enjoy its full benefits, more effort is required from your end to constantly monitor and analyse various parameters of your portfolio. To achieve optimal capital growth, you must keep a careful eye on it and manage it well during the investing period. Sometimes, switching between funds is necessary to avoid market risks, avoid fund underperformance, and avoid fund performance stagnation. Signs that you need to change your mutual find scheme Change in investment goals Before you begin investing in mutual funds, you must first devise a strategy that is tailored to your specific objectives, risk appetite, investment horizon, budget, and other objectives. The type of mutual fund schemes you should invest in is determined by these criteria. Mutual fund investments can be divided into three categories based on their investment horizon: short, long, and intermediate. Risk appetites are divided into three categories: aggressive, moderate, and conservative. It is important to keep your expectations in check in terms of the kind of profits do you hope to get from your mutual fund investment. In this instance, mutual fund schemes might be classified as income-oriented, balanced, or growth-oriented. When investing in a mutual fund scheme, you may have had a certain goal in mind. But what happens if your goal shifts in the middle of the project? You can switch between funds in this situation to suit your new investing goal, horizon, and risk tolerance. On a side note, one of the first things to keep in mind when it comes to investing in mutual funds is to identify the top brokers in share market . Zebu is a leading online share broker that offers one of the lowest brokerage fees when it comes to investing in mutual funds. Read on to know more about when to change your mutual fund plans. Your scheme is underperforming There's no guarantee that the mutual fund scheme in which you invested will perform well over time. You may have analysed prior fund performance and tried every permutation and combination to find the right mutual fund investment for you. Despite your best efforts, you never know when your scheme will underperform or become vulnerable to hazards, even in favourable market conditions. To ensure that your portfolio does not become stagnant, you must switch to a different fund. To keep the portfolio balanced, over-weight mutual funds should be rotated. You simply feel like you made the wrong choice When it comes to even the safest investment options, mistakes are bound to occur (especially if you are doing the research by yourself). Fortunately, investing in mutual funds is not one of them. Worry not if you bought in a mutual fund without doing your homework or understanding key technical features, only to discover later that it isn't a good fit for your goals or risk tolerance. Your current assets can easily be reallocated into a portfolio that matches your needs. In the world of mutual fund investing, erroneous predictions are more common than you would think. Sometimes, even seasoned fund managers can get their analysis proved wrong. For these reasons and more, it is crucial that you keep a close eye on your mutual funds and keep your options open and diverse. Apart from this, to maintain balance and enhance fund performance, an investor should rotate the assets in his or her portfolio on a regular basis. With Zebu’s seamless investment platform, which is one of the top brokers in share market, you can get started with direct mutual funds and make more than 1% of the returns you would otherwise make with managed mutual funds. And with our lowest brokerage fees, you can confidently make changes to your scheme as per your requirements. We are, in fact, one of India’s leading online sharebrokers. To know more, please get in touch with us now.

Being one of the fastest-growing brokerage firms in India, we feel that it is our responsibility to educate investors and traders and empower them with the right technological tools they need to make informed financial decisions. In that aspect, we have been our end-user tools like Zebull and Smart Trader. constantly updating

Here are the products and services that were updated to become more feature-packed for our customers.

Outreach through financial education

Thanks to a record-breaking round of funding for Indian entrepreneurs across all industries, India was able to witness a huge influx of unicorn companies. The unicorn club has already accepted 42 Indian startups. Over $38.4 billion has been raised as of December 4th, with many rounds expected to produce more Indian unicorns in 2022.

CRED

Digit Insurance

MamaEarth

UpGrad

Meesho

PharmEasy

Vedantu

BlackBuck

CoinDCX

Eruditus

As the pandemic spread increased and decreased throughout the year, the stock market had ups and downs in 2021. Despite concerns over the second wave of covid infections, Indian stock markets outpaced emerging markets in the first six months. Due to the rising rate of immunisation, the government's stimulus measures, and the Reserve Bank of India's liquidity support operations, investors were glued to Indian stocks from January to June. The IPOs in the second half of the year functioned as an antidote for the stock market. In 2021, the Indian stock market benefited from a surge of money unleashed by global central banks, which supported domestic policies, as well as the world's largest vaccination campaign, which sparked a world-beating increase on Dalal Street, despite concerns about inflated values. These are the five stocks from the Nifty 100 with the best one-year returns.

Adani Transmission

Adani Enterprise

Tata Motors

Vedanta

Apollo Hospitals

After one of the biggest falls in the Indian share market in 2020, the market has picked up after itself and has reached its all-time high in 2021. It was the year of extremely high profits for those who were bullish on the Indian markets and there were multiple sectors that helped move it. Here are the top 5 sectors in NSE with the highest market cap that moved the market this year.

Software and IT Services

Chemicals

Healthcare

Oil And Gas

Fast Moving Consumer Goods