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Want To Win Over The Market? It’s A Game Of Psychology

For many investors, the stock market today opens up a world of chances. But if you don't know how to handle the ups and downs of the markets, it can be a dangerous place. To trade well in any financial market, investors need a set of skills. The skill set should ideally include the ability to evaluate the basic technical aspects of any company and to figure out the direction of a stock's trend. But neither of these skills is as important as the way a trader or investor thinks. Sometimes it seems like stocks have their own minds, but investors need to keep their emotions in check, think on their feet, and trade with discipline and care. This is where “trading psychology” comes into play. Your state of mind has a lot to do with how you make decisions and act on the trading floor. Are you looking for the best trading platform? Look no further. At Zebu, as one of the top brokers in share market we offer the best online trading platform to make your trading journey smooth. When you, as an investor, are in the stock market today, you need to keep your feelings in check. If you understand these, you'll be able to trade well and reach your goals. Two of the most important emotions you need to control are greed and fear. Greed is driven by the desire to make more money, and fear is driven by the worry that you might make the wrong choices. If you can keep these two bad feelings in check, you will not only win the mental battle with the stock market but also the war. Getting things done quickly When you have to do different things in the stock market, you should know what emotions are involved so you can control them. Traders and investors need to be able to think quickly so they can act quickly. It takes a clear head to be able to jump into and out of stocks at the last minute. Investors also need the discipline to stick to their plans for trading and investing. They should know exactly when to start making money and when to stop losing money. In reality, emotions get in the way of these actions when they get in the way. What's the deal with fear? When you're an investor or trader on the stock market in real-time, it's hard to keep your feelings out of it. If you want to be successful at trading and investing, you should be able to keep your emotions, which are the only thing that drives sentiment, under control. Often, while trading is going on, bad news about a certain stock will come out. You might even hear that the economy as a whole is in bad shape. This is when investors become fearful. This could cause you to sell your stocks, which would force you to sit on your cash and keep you from taking more risks. As a result, you may avoid losses but may lose out on gainful returns. When investors and traders see a threat that may or may not happen, they often act quickly out of fear. Here, you might act without thinking when you think there is a threat to your chance of making money. If you want to trade and invest, you should know that situations like this can happen. So, you can prepare yourself mentally. Keeping greed under control There is a saying that suggests that greedy investors on Wall Street usually end up losing money. This is about investors who are too greedy and tend to hold on to a winning position for too long. These investors want to take advantage of a stock's winning streak until the price goes up one more time. What they don't expect is that the stock will take a sudden turn for the worse and fall in a flash. Greed is hard to get rid of, and most investors don't start out greedy but tend to become greedy as they go. Greed comes about because people want to do better. But trading should not be based on whims and impulses; it should be based on facts. Rules are the best Several experienced investors will tell you that it's easy to make rules, but it takes a lot of mental strength to follow them. When people act on impulse instead of following the rules, they tend to break them. Investors may or may not make money on the stock market today, but when it comes down to it, they must stick to their rules. Right from the beginning, you need to set some rules. These must be based on your risk/reward tolerance and tell you when to enter trades and when to get out of them. A stop-loss should be put in place after a profit goal has been set. All of this takes the feelings out of trading and investing. Reason and research help people win wars Traders can get through a day of trading with ease if they use logic and reason. Also, investors and traders can choose which events will make them decide to sell or buy stocks. You should also decide how much money you are willing to lose or win in a day. If you have reached your profit goal, it makes sense to stop trading right away. All of this is, of course, governed by rules, and the most important thing is to follow the rules and be reasonable. Trading and investing in stocks is not scary, and you can do it by opening a demat account with Zebu. When you do research on a stock, you can also learn about the stock's trend. In the end, it's up to you if you want to use the stock market as a battleground or a place to play. At Zebu, as one of the top brokers in share market we offer the best online trading platform to make your trading journey smooth.

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The Ideal Asset Allocation Formula For Your Capital

For the same amount of capital, different investors will divide it and invest in different asset classes like mutual funds, real estate, bonds, FDs and so on. But how can we decide which portfolio is the best? Well, that depends on the investor's age and what they want to do with their money. The right asset allocation for each investor is based on these things. But what does it mean to divide up assets? Let's find out. As an online share broker company, we understand the importance of efficient digital technology and offer a seamless online trading platform for our users and an added advantage of the lowest brokerage options. How do you divide up your assets? Asset allocation is the process of putting your money into different kinds of investments, such as stocks, bonds, gold, real estate, cash, and so on. It is the process of choosing what assets to buy with the money you have to invest. Asset allocation is important because it makes sure that your portfolio is in line with your financial goals. It also makes sure that you don't buy assets whose level of risk doesn't match your risk tolerance. So, what's the best way to divide your wealth among different assets? There is no one best way for investors, in general, to divide up their assets in their portfolios. Even for the same investor, the best way to invest their money will change as they get older. So, if you are just starting out with investing, here is how you can figure out the best way to divide up your assets. When you're in your 20s, you're still young and many years away from retirement. This means that you can take more risks with your money and invest in the stock market today. So, you may put more of your money into stocks and mutual funds that invest in stocks. This is fine as long as you don't have too many debts in your name. Also, you should balance your equity investments with a few safe investments to make your portfolio more diverse and reduce the overall risk. When you're in your 30s, you may be able to earn a lot more than when you were younger. But you may also have other debts under your name, such as a mortgage or car loan. Still, you can still take some risks at this age because retirement is still a long way off. So, your portfolio could have a lot of stocks and a few fixed-income investments to balance out the risk. You could buy shares in mutual funds, or you could put together your own portfolio of stocks and bonds. When you are in your 40s, you are getting closer to retirement age. You need to make sure that you pay off your high-interest debts. As for how you divide up your assets, it may be time to gradually put less money into high-risk investments and more into stable ones. You could keep investing in mutual funds on the stock market as long as you choose "blue chip" stocks from strong companies or stocks that pay regular dividends. Aside from that, it might be a good time to put more of your money into debt instruments and deposits. Asset allocation in your 50s: When you're in your 50s, you should put more emphasis on keeping your money than on making it grow. With retirement coming up in just a few years, you need to make sure you have enough money to take care of your life goals after retirement. Since you won't be working after you retire, it's also important to set up another way to make money. At this point, you can almost completely get out of the stock market and change your portfolio so that it has more debt and fixed-income investments. Also, try to choose investments that can give you a steady stream of income. When you are in your 60s, it is likely that you have already retired. You should have been able to pay off all your debts if you had planned your money better. Your asset allocation should be made up of only safe, risk-free, or low-risk investments like gold, real estate, deposits, and debt instruments. This way, you can make sure that the money you've saved up over the years is safe and not affected by changes in the market. How to make sure the best use of assets? In addition to the above rules of thumb, you can also make sure your asset allocation is good by making sure your portfolio is in line with your financial goals. Know where your money is going: Your goals must match up with how you divide up your assets. You need to know why you're investing, whether it's to buy a new house, pay for your kids' college, or save for your retirement. Think about the time frame of the investment. You should choose investments with a time frame that matches the time frame of your goals. In other words, choose long-term investments for long-term goals and short-term assets for short-term goals. Think about the money you'll make from your investments. Find out how much money you'll need to reach a certain financial goal, and invest in something whose returns will help you build up the money you'll need. For instance, you can't use an FD to get the money you need to build your house. Instead, if you want to make a lot of money, you should invest in the stock market or stock funds. Conclusion If investing in the stock market is part of your ideal mix of assets, you need to open a demat account before you can start. Zebu has an online platform that makes it easy to do this. Make sure you look at your portfolio every six months or once a year to make sure it fits your age and goals. As an online share broker company, we understand the importance of efficient digital technology and offer a seamless online trading platform for our users and the lowest brokerage options. Visit us to know more.

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Rules Investing Rules That Every New Investor Should Know

If you are a new investor, you can give yourself a pat on the back for getting started. Rest assured that if you invest wisely, you can provide your family with the ideal lifestyle. At first, getting started on this path might seem hard, but millions of people have made money from the markets by following a few simple but important tips. Along with the 5 golden rules of investing, another important aspect of investing is the technology we use. Hence, Zebu, one of the biggest share broker company offer the lowest brokerage for intraday trading and the best trading accounts for our customer. These five golden rules will be your guide when it comes to investing: Compound your returns Learn about the power of compounding. The key to your future wealth lies in the power that you haven't used yet: the power of your investment growing over time. The earlier you start investing, the longer your money will make money for you. At the end of the day, it can be better to invest a small amount regularly over a long period of time than to invest a large amount for a short time. To get the most out of your equity investment, you need to stay invested through the market's boom and bust cycles. Financial goals Know what you want to achieve with your investments. Always keep in mind that your portfolio must help you reach your life goals. If you make a plan with your financial advisor, your investments can help you reach your life goals, like saving for your kids' college, buying a house or car, or saving for retirement. Many people make the mistake of investing on their own, which they later regret when their investments don't meet their goals. Know your risk limits Accept the risk you're willing to take. The risk of investing in the markets varies from one instrument to the next. For example, investing in fixed deposits is less risky than investing in mutual funds. Over time, though, many mutual funds do give better returns than fixed deposits. Before you buy a market instrument, you should think about what you want, what you need, and how much risk you can handle. Consider investing in a mutual fund or the shares of a company only if a trustworthy stock market expert tells you to do so. Keep your emotions in check Learn not to let your emotions get in the way. People often get too emotionally attached to their portfolios and give up on good sense and objectivity. Most likely, your portfolio will go up and down in the short term. During a bull market, it will make you happy when the price goes up, but it shouldn't make you lose your nerve when the price goes down. As an investor, you need to develop the discipline to stick with your investments over the long term and not sell them off when things get hard. When investing in the markets, it's always a good idea to be smart about your investments and listen to stock market experts you can trust. Appoint a Financial Advisor In the last few decades, the study of behavioural economics has shown that people often invest in a sloppy way. People they know often have an effect on what they decide to invest in. On the other hand, people fall for irrational cognitive biases. When it comes to the stock market, good advice from a reputable stock market advisor can be your best guide. You won't sell your investments out of fear if you have well-researched market reports and good investment advice. Conclusion Overall, a disciplined approach to investing and a calm, patient attitude during market lows can help you not only survive the worst of the market lows but also profit from them. In the same way that you take your car to a mechanic to get it fixed, you can go to a financial advisor to help you get your portfolio in order. Getting help from a good financial advisor can make a big difference in how much money you and your family have. Zebu, one of the biggest share broker company offer the lowest brokerage for intraday trading and the best trading accounts for our customer. Get in touch with us to know more.

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5 Things To Keep In Mind Before Trading In Futures and Options

Those who want to become derivative traders have a lot to gain from trading options and futures. Most of the time, people jump into FnO trading without knowing how it is different from trading on the spot market. If you've been thinking about trading futures and options, here are 5 things you need to know before entering the derivative markets. The best way to keep a track on your losses is to have the right tools in place and as one of the experienced brokerage firmsin India we have the best trading accounts for our users and offer lowest brokerage fees. 1. Your losses aren't limited to the money you put up as a margin When you trade on the spot market, the most you can lose is the amount of money you put in. In futures trading and options trading, on the other hand, you pay margins that are a lot smaller than the amount of capital you are putting at risk. This makes it easier to lose track of how big your possible loss really is. Before you start FnO trading, it's helpful to remember this. 2. Liquidity is easy to forget about When they first start trading options and futures, many traders don't realise how important liquidity is. So, be careful not to make the same mistake. Even though it's important to have a good options trading strategy or futures trading strategy, it's just as important to make sure that the derivatives you're trading in are liquid enough to support an exit. 3. Moneyness of options This is something you really need to know before you start trading options. Out-of-the-money (OTM) options may be cheaper, but they often aren't liquid enough, which is a big problem. So, the best chance isn't always the one that costs the least. Make sure you find a good balance between affordability, profit, and cash flow. 4. You can use FnO trading to hedge There are risks that come with trading in FnO. Beginners should always use a futures trading strategy or an options trading strategy along with a regular trade so that the FnO trade can protect the regular trade. This way, you can lessen the risk and learn more about how the derivative market works at the same time. 5. Trading plans are important In derivatives trading, FnO trading strategies are very important. Different plans work best in different situations. For example, you can use covered calls if you're worried about how much it will cost to keep a call on hold. On the other hand, if you want to make more money if the price goes down, you can use protective puts. Also, keep in mind that complicated and multi-layered plans are usually more expensive. So, before you start trading FnO, make sure you remember these things. For beginners, it's helpful to have a reliable tool or platform to use, especially when it comes to making and analysing strategies. Here, our advanced options trading platform, Zebull, can come in handy. If you want to get into the derivatives market, you should check it out and use the helpful features. Don’t lose out on a chance to have the right tools in place, as one of the experienced brokerage firms in India we have the best trading accounts for our users and offer lowest brokerage fees.

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Who Are The Market Participants Of The Futures Market?

A market is strong not only if there are products to trade and a way to keep things in check, but also if the people who take part in it are good. The same is true of the futures market for commodities. Even though there are thousands of traders who buy and sell precious metals, industrial metals, and agricultural goods, these traders and market participants can be put into four main groups. This sorting is very important because each of these types of market participants leaves its own mark on the market and adds to its strength in its own way. Are you looking for the best trading platform? Then your search ends here with years of experience as a share broker, our team at Zebu has come up with the best stock trading platform for our users. 1. Speculators on the commodity market The time that speculators are on the market is very short. They might want to get out of their long or short position the same day or in a few days. They make money by understanding global economic cues and determining which commodity will go up or come down. In the equity derivatives market, speculators are also often called intraday traders. Most speculators don't care which way the market is going and are willing to trade both ways, that is, on the long side and the short side. Speculators usually try to be on the right side of the market's overall momentum and the momentum of the commodity they are trading. Since speculators depend a lot on small trading opportunities in the commodity markets, they use technical charts, supports, resistances, break-outs, patterns, etc. to help them make their trades. Speculators play a very important role in the commodity markets because they keep the markets liquid and make sure that the bid-ask spread is as small as possible. 2. Margin traders who trade in the direction of the market When it comes to certain commodities, these traders have a slightly longer-term view than speculators, who usually work at the short end of the market. Since margin trading is possible in the futures market, traders use futures as a stand-in for buying the commodity on the spot market. Instead of locking up all of their money in a spot position, traders who pay a margin use futures as a stand-in for spot positions. Margin traders are not only willing to wait until the contract ends, but they are also willing to take a longer-term contract and pay the rollover cost to keep the position open. Margin traders usually don't put too much stock in technicals, but they have a strong fundamental premise that makes them willing to pay the roll cost to keep the position open for longer. Most of the time, the trades of these margin traders give traders and analysts hints about which commodities are getting long-term interest and are a leading indicator of changes below the surface. 3. Spot / Futures Arbitrage Traders Arbitrage traders do something very different in the commodity markets. By trying to lock in spreads, they actually try to make the prices on the market fairer. Before we can figure out how arbitrageurs work in the commodity markets, we need to know how they do business in the stock markets. If JSW Steel is quoted at Rs.500 in the spot market and Rs.510 in the stock futures market, the arbitrageur will buy JSW Steel at Rs.500 in the spot market and sell JSW Steel Futures at Rs.510. So, he can be sure of making a profit of Rs. 10 till the price gap is bridged. On the day of expiration, both the spot position and the futures position will end at the same price, giving the arbitrageur the chance to make the 2% spread. The markets for commodities can be a bit more complicated. First of all, different agencies control the spot market and the futures market for commodities, which makes things more complicated. Second, unlike stocks, commodities have extra costs like shipping fees, insurance costs, storage fees, stamp duty, etc., which all need to be taken into account when figuring out the spread. But when all of these costs are taken into account, if the arbitrage spread on any commodity is positive, the arbitrageur will buy in the spot market and sell in the futures market. By fixing any problems with prices, the arbitrageur will not only be sure to make a profit, but he or she will also make the market work better. Arbitrage takes a lot more time and money than speculation or trading on margin. 4. Hedgers Hedgers are people who have an underlying exposure to a certain commodity. Let's say you have a big order of silver that you need to give to a jeweller in 3 months. The only problem is that the deal will be made at the price that was in effect on that date. This puts you at risk for price changes over the next three months. You're happy with the price of silver right now, but you're worried that it might go down in 3 months. You can protect yourself by selling short 3-month silver futures. By doing this, you're securing your position at a price that seems good to you at first. So, you don't care what happens to the price of silver over the next three months. If the price of silver goes up, you will lose money, but that is what a speculator does. As a hedger, it is your job to protect yourself from losing money, which you have done well. Hedgers are traders who have real exposure to the underlying market. Because of this, they make the commodity markets more stable and trustworthy. These are the four main participants of the commodity markets. The direction and health of the commodity markets are determined by what these four people do together. Your search for the best trading platform? With years of experience as a share broker, our team at Zebu has come up with the best stock trading platform for our users.

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Benefits Of Trading In Index Futures

A futures contract on a sectoral or market-wide index is called an index future. On the NSE, for example, you can buy futures on the Nifty, which is a market-wide index, and liquid futures on the Bank Nifty (which is a sectoral index of liquid banks). Both of these indices are very liquid, and both individual and institutional investors trade them a lot. Why have index futures in India become so popular? Why would you want to trade in index futures? Index futures trading in India grew out of stock futures trading, which was similar to the old Badla system on the BSE. In addition to looking at how to trade index futures, let's look at how traders can actually benefit from doing so. As one of the top brokers in the share market we understand the concerns with brokerage fees and offer lowest brokerage for intraday trading and the best trading accounts for our users. 1. You can look at the whole and avoid stock risk Let's say you've decided to buy banking stocks, but it will be hard to figure out which ones to buy. While NPAs may be a problem for PSU banks, valuations are a problem for private banks. A better idea would be to look at the whole banking industry, which will give you a natural way to diversify. You can do this by buying Bank Nifty Futures and taking part in the rise of banks. The benefit is that you can keep your position open as long as you want by rolling it over each month for a small fee of about 0.50 percent. 2. You can trade in both long and short directions It's fine if you're betting that banking stocks will do well. But what if you think banks are bad? If you own banking stocks, you can sell them or sell them short on equity markets. But because Indian markets use rolling settlements, you can only short stocks for one day. The other option is to sell stock futures of certain banks, but this also comes with risks related to those banks. All of these problems can be solved by selling the index futures for Bank Nifty. If you think the Indian markets as a whole will go down, you can just sell Nifty futures. 3. The margins for trading index futures are lower Always keep in mind that trading in futures is all about trading on margins. But the margins on indices like the Nifty and the Bank Nifty tend to be lower than the margins on individual stocks. Because an index is a group of stocks, it offers a natural way to spread out risk. This is shown by the fact that less risk is needed to take a position in index futures. This will make sure that the amount of money that is locked in is also less. 4. With index futures, you can reduce your risk This is a very important part of how you manage your portfolio. Whether you invest on your own or through a company, you may have a large portfolio of stocks. Once the US Fed raises rates, you think the market will fall. At the same time, you are sure that the drop in your stock prices will not last long and that they will go back up in the next few months. You could just keep your portfolio, but it would be better to sell Nifty futures to spread out your risk. When the market goes down, you make money on Nifty futures, and these profits will help you lower your average cost of holding equity. After 3 months, you will definitely be better off. 5. Very liquid There are often problems with the way certain stocks or stock futures trade. On the other hand, index futures rarely face liquidity risk because institutional investors like to use them. Because of this, the bid-ask spreads are also very small. This makes it pretty safe to trade in these index futures, since you won't get stuck for lack of liquidity. This is one of the main reasons why trading index futures is good. 6. Index futures can help you diversify If you have a portfolio that is mostly geared toward financial stocks and you think there is some risk because RBI is raising interest rates, so you want to add safety by investing in non-cyclical sectors like FMCG and IT. Buying these stocks is one option, but it will cost money and lock up funds if the opportunity is only for a short time. A better way is to add index futures for the FMCG index and the IT index to your portfolio. This will help you diversify your portfolio's structure with little risk and money. 7. It costs much less to trade index futures. Index futures have much lower commission rates and STT rates than equities or even stock futures. In fact, most brokers will also offer you fixed brokerage packages on indices, which makes them cheaper than stock futures as well. Make the most of the fact that index futures cost less. This is why index futures are a great way to trade with less risk and a higher chance of making money. As we mentioned earlier as one of the top brokers in the share market we understand the concerns with brokerage fees and offer lowest brokerage for intraday trading and the best trading accounts for our users.

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The Features Of Futures Market

Here are some of the most interesting things about futures contracts: Let’s start off by saying that the Indian derivative market is the largest in the world in terms of turnover and market participation! Before we get on to understanding more about the Futures market, we wanted to inform you that as an online trading company we offer lowest brokerage for intraday trading for our customers A futures contract can be used for exchanges, commodities, currencies, and indices. It can also be used for many different types of asset classes. A futures contract is not flexible like a forward contract. For example, if a contract says it applies to 1000 barrels of oil, the price must be locked in per barrel or in multiples of 1000 barrels. To lock in a price, someone would have to sell or buy a hundred different contracts. To lock in the price of a million barrels of oil, you would have to buy or sell a thousand of these contracts. Traders also get a good idea of what the futures price of a stock or the value of its index is likely to be. Future contracts are mostly used to figure out how many shares will be bought and sold in the future based on their current future price. Futures are traded on margin, which means that people who don't have enough money can still trade and take part. To do this, one can pay a smaller margin instead of the full value of the physical holdings. There are two types of people who use future contracts: speculators and hedgers. Producers or hedgers are the people who make or buy an underlying asset hedge. The price at which the good will be bought or sold is also guaranteed by these people. On the other hand, speculators are people who use futures to bet on how the price of the underlying asset will change. Futures Contract Example Here's an example of a futures contract to help you get a better idea of what it is: Let's say that a person who makes oil wants to sell it but worries that oil prices will go down in the future. A futures contract can be used to make sure that the oil producer gets a set price and doesn't lose money. With the help of future contracts, the oil producer can lock in the price at which the oil will sell, and once the future contract is up, the oil will be sent to the buyer. On the other hand, a company that makes things might need oil to make widgets. Since this company plans ahead and likes to get oil every month, they may also use a future contract. So, based on the price set in their future contract, the company knows how much oil they will get. They know that once their contract is up, they will have to take delivery of that oil. Conclusion Futures contracts are a great way to spread out your investments and make sure you make good money by using what you know and making guesses about future prices. Since you can trade Futures based on many different types of underlying assets, you can use a futures contract to protect yourself from losses in other asset classes and take delivery of the underlying asset before the contract expires. As an online trading company we offer lowest brokerage for intraday trading for our customers. Want to know more? Get in touch with us.

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Reasons Why You Should Be Trading Options

At least in India's equities markets, options trading has clearly matured. In terms of daily volumes, options are not only liquid, but they are also many times larger than the cash and futures markets. We'll look at the advantages of options trading, as well as the benefits of option trading for both buyers and sellers. Here's a quick rundown of the advantages of trading options. While Options Trading has multiple benefits, trading using Zebu’s online trading platforms has its own set of benefits. We offer the lowest brokerage on intraday trading and are one of the best share broking company so we can make your investment journey seamless. Benefits of Options Trading Hedging risk is possible with options trading. If you are buying stocks of a company and purchase a put option for the same underlying, for example, your risk is minimised. If you are long a stock at Rs. 1000 and buy a Rs. 900 put option at a premium of Rs.10, your maximum loss will be Rs.110. That is the strength of options, since no matter how low the price drops, you will only lose a set amount of money. Options can assist you in lowering the cost of keeping a stock. For example, if you're holding stock and the price isn't changing, you can sell greater call options to earn the premium and lower your asset's cost of ownership. Options are far more cost-effective in terms of costs, which is one of the key advantages of options trading. The trader might establish an options position with a little margin because of options. For example, an investor must pay Rs.20,000 to purchase 100 shares of a stock at a price of Rs.200. However, if he purchased equal-weighted call options, the premium required would be roughly Rs 5,000. Options have the potential to provide huge returns, or a multiplier effect. Here's how to do it. If the strike is picked correctly, the option pays the same profit as straightforward stock buying. Because we are obtaining options at a lower margin while maintaining the same profitability, the percentage return would be significantly higher, at least in terms of ROI or return on investment. One of the major benefits of options is that they allow for the systematic transfer of risk from someone who wants to remove risk for a fee to someone who is willing to take on that risk for a fee. One of the most significant advantages of options trading is that it provides a genuine secondary market for risk, which is what distinguishes the options market. One of the most essential aspects of options is that they provide liquidity while also allowing price discovery in the underlying market. Options are a useful way of pricing complex risk characteristics, hence this is an important feature. The fact that the options-related data usually works as a lead indication is a significant advantage of the options. Data points such as option strike accumulation, changes in options interest across strikes, and significant spikes in implied volatility in options, for example, are all crucial leading indications of the future shape. Risks of Options Trading There are five disadvantages to trading options in general, and these are the same whether you are a buyer or seller of options. When naked options are sold, the potential losses might be enormous. As a result, vigilance is advised. Furthermore, even if you are buying options and frequently see your options expire worthless, it can reduce your trading capacity. Options pricing, option valuations, options trading, and other complexities make this a difficult trading landscape. Many traders are unaware of the basic hurdles of options trading and are quick to jump in. With Nifty or Bank Nifty options, or even very liquid stock options, liquidity may not be an issue. However, in mid-cap equities where options are authorised, liquidity is unquestionably a problem. If you're working on a complex strategy, costs will be multiplied. Then there are statutory charges, exchange costs, tax costs, and so on, all of which must be taken into account. Time decay benefits the seller of the option but puts the buyer at risk because the option loses time to value with each passing day, even if the price isn't changing much. As we mentioned earlier, trading using Zebu’s online trading platform has its own set of benefits. We offer the lowest brokerage on intraday trading and are one of the best share broking company so we can make your investment journey seamless.

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What Are Futures Contracts And How Do They Work?

Investors who want to diversify their portfolios by investing in other types of assets have found that derivative trading has been very profitable. Some people like to trade options, while others like to trade Futures. But because futures contracts are so complicated, you need to know everything there is to know about them. Are you a regular trader? Then you will need the best trading platform, At Zebu, as a share broker company we offer just that. Our online trading platform is designed to make your investment journey seamless. What is trading in the futures? A Futures contract is a legal agreement to sell and buy a certain commodity, asset, or security at a certain price and date in the future. Futures contracts are standardized to make it easier for people to trade on the futures exchange. This is done to check for quantity and quality. The person who buys the futures contract has to buy or receive the underlying asset before the futures contract ends. The seller of this contract is responsible for giving the buyer the asset that the futures contract is based on when the buyer decides to use the futures contract. Future contracts let an investor guess which way a commodity, security, or financial instrument, which is the underlying asset, will move. When these contracts are bought, they are often done so to protect against losses from price changes in the underlying asset that are not good. Futures Contract Futures contracts are derivative financial contracts in which both parties agree to buy or sell an asset at a certain date and price in the future. Futures Trading is the process of trading with Futures Contracts. To follow the rules of futures trading, a buyer must buy the underlying asset while a seller sells it at a set price, no matter what the current market price is or when it expires. Future contracts also list the standard amount of the underlying asset, which makes trading on a futures exchange easier. People talk about the same thing when they say "futures" or "future contract." For example, someone may say that they bought oil futures, which is the same as saying they bought an oil futures contract. When someone talks about a "future contract," they are usually talking about gold, bonds, oil, or Nifty 50 index futures. Futures and forwards contracts Futures is a very broad term that is often used to talk about the whole market. Futures contracts are standardised, which is different from forward contracts. Forwards and forward contracts are both ways to lock in a price for the future in the present. Forward contracts are bought and sold over-the-counter (OTC) and have terms that can be changed. On the other hand, a futures contract will have the same terms for selling and buying, no matter who it is with. In the following blogs, we will look at futures trading in greater detail. We know you need the best trading platform, At Zebu, as a share broker company we offer just that. Our online trading platform is designed to make your investment journey seamless.

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Everything You Need To Know About Put Options

Beginner investors should know enough about the market to be able to predict how economic, political, or social factors will change the current market trend. This will help them make profits easily. The same is true for learning about financial instruments that can give you big profits if you know how to trade them well. One type of investment tool is a derivative contract called a "put option." As an online trading company, we understand the difficulties of working with an unresponsive platform and offer our customers with the best trading platform and lowest brokerage options. What are put options? How do they work? A put option is a derivative contract that gives you the right, but not the obligation, to sell a certain amount of the underlying asset at a certain price and date. The agreed-upon price set by the contract is the strike price. A put option is a great tool for sellers who want to protect their investment if the underlying asset's price drops in the future. The underlying asset's value could fall below what the buyer agreed to pay for it. The buyer loses money because of this. But because the parties have already agreed on a strike price, even if the current price is lower, the seller gets the strike price that was agreed upon. This lets the seller make a lot of money even if the market value of the asset has gone down. How are a call option and a put option different from each other? A call option is a derivative contract that gives a person the right, but not the obligation, to buy a certain amount of an underlying asset at a certain strike price and on a certain date. With a call option, you can make money if the value of the underlying asset goes up before the option's expiration date. If the value of the underlying asset goes above the agreed-upon strike price, the investor can buy the underlying asset for much less than the market price. What's good about using put options? When buying an options contract, you have to decide whether to buy a put option or a call option, so it's important to know the benefits of each. When compared to each other, a put option is better than a call option. 1. Time decay is a good thing If you want to make money trading derivatives, time is very important, and options are a time-bound asset that gives put sellers an advantage. The closer an option contract gets to the end of its expiration date, the less valuable it becomes. Because of this, people who sell put options are more likely to make money from time decay if they sell the contract while the option is still valuable. On the other hand, time decay does not help the person who has the call option in this case. 2. Cost-effective The underlying asset or stock of an option can change in any way. Its value could change a lot depending on what is going on in social, economic, and political scenes in the world. For an investor to make money on a call option, the option must be bought for less than the strike price. When investors buy a put option, on the other hand, they might make money if the price of the underlying asset stays the same or even goes down a little. So, a trader who buys put options is more likely to make money than a trader who buys call options. 3. Implied Volatility Implied volatility describes the expensiveness of an option contract. When the implied volatility of a market is high, the price of the option contract tends to be higher. If you were trading put options, you'd want to sell when the price was high and buy when the price was low. This is only a good idea when implied volatility is high but goes down slowly over time. Experts in the market have known for a long time that high implied volatility tends to go down over time. This means that traders who buy a put option will make money over time because the market is naturally in their favour. Conclusion When you first start investing, it seems like market forces are in charge, but the longer you invest, the more you learn about them and how they work. The longer you trade, the better you'll be able to spot things that are likely to affect the market you're trading in and take steps to protect your money. The same can be said about put options, which can bring in more money than call options. But you should make sure you know everything you need to before putting money into options trading, especially put options. An unresponsive platform can cause more problems than you anticipate so at Zebu, an online trading company we offer our customers with the best trading platform and lowest brokerage<.b> options.

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Everything You Need To Know About Call Options

When you first start investing, you'll quickly discover that the Indian share market is an ocean you'll need to master in order to avoid losses and maximise profits. Although a large number of financial instruments accessible for investment in the Indian market gives a wealth of profit-making chances, if you are unfamiliar with any of them, you may wind up losing money. When you're looking for high-return investing opportunities, the first thing you'll notice is an Options Contract. The value of an underlying asset, such as a stock or a security, is usually the basis for this financial contract between two parties. If you are looking for a seamless online trading platform your search ends here. As a share broker company we offer our customers endless opportunities and the best trading accounts to help them focus more on making profits. What Does the Term "Call Option" Mean? A call option is a contract between two parties in which one party has the right, but not the duty, to buy a specific underlying asset at a predetermined price and on a predetermined date in the future. You are not legally obligated to execute the options contract unless it is profitable to you because there is no duty on the need to make the purchase as indicated by the call options contract. Only if the previously decided amount is less than the underlying asset's current price on the date the options contract is exercised can the purchase be profitable. The strike price refers to the underlying asset's specified price. The call option will result in losses unless your strike price is lower than the underlying asset's price on the date of execution. Consider the following illustration. If you buy a Wipro’s Call option for Rs 25 with the strike price as 500, you have the option of buying Wipro’s stock at Rs. 500 on the call option's expiration date (before expiry). If the price of Wipro stock on settlement day is Rs. 480, however, exercising your call option would be a loss because you could have purchased the stock in the open market for a lower price. If the price of Wipro stock on settlement day is Rs. 520, on the other hand, you make a profit by exercising your call option. You paid a non-refundable fee of Rs. 25 to obtain this right to acquire the stock without any obligation to buy, which will be your maximum loss if you decide not to exercise the contract. Most investors prefer to buy call options rather than put options. There are a number of causes for this, which are stated below: 1. Investing in a Cost-Effective Way Investing in shares or other derivatives involves a significant amount of capital to make the investment sustainable and profitable. Buying a call option, on the other hand, is as simple as paying the premium, which is based on the underlying asset, making it more inexpensive to purchase. You can invest in a cost-effective manner by using a call option in this way. 2. Risks are less severe Investing in a call option is far less hazardous than investing in stock or other securities directly. Because call options are not particularly volatile, they can be an excellent risk management tool. The amount you spend as a premium for the privilege to acquire the call option is the full extent of your losses on a failed call option. 3. Covered Calls Can Help You Earn Premium Even after purchasing a call option, you can increase your profits by selling the contract on the secondary market. If the underlying asset you acquired a while ago has risen in value, you can receive a premium by writing a call option with the strike price equal to the current market value. In options jargon, this transaction is known as a covered call, and it allows investors to gain additional earnings. Your search for a seamless online trading platform ends here. As a share broker company we offer our customers endless opportunities and the best trading accounts to help them focus more on making profits.

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The Market Participants Of Derivative Trading

Investing is one of the most effective methods to spend your money. When you first begin investing, however, it is always advisable to stick with investment methods that provide great security and assured returns. The majority of early investments are based on a low-risk profile. Their risk appetite increases as they obtain more investment expertise and understanding of the financial market. It helps investors to diversify their assets and invest in financial instruments with higher returns if they have a high risk profile. While investing can be one of the most effective methods to spend your money, there is a certain amount of risk involved - especially if you don’t use the right tools. At Zebu, a share broker company, we offer the best online trading platform for our investors, while also giving them an added advantage of lowest brokerage for intraday trading. What Exactly Is a Derivative? Derivatives are financial contracts between two or more parties that are based on an underlying asset like stocks, commodities, currencies, etc. The value of the derivative is based on the price or value changes of the underlying asset. You can use derivatives to protect a position, guess which way an underlying asset will move, or increase the value of your holdings. In order to trade derivatives, you must use an exchange or trade over the counter (OTC). Over-the-counter trade is conducted between two private parties without the involvement of a centralised authority. Furthermore, because the contract is signed by two private individuals, it is vulnerable to counterparty risk. The chance, or rather the danger, of one of the parties defaulting on the derivative contract, is referred to as this risk. The Benefits of Derivatives: 1. Hedging The greatest approach to protect yourself from a disastrous investment is to use a derivative contract. When you trade derivatives in the stock market, you're effectively betting on whether the price of a certain stock will rise or decline. As a result, if you suspect that the stocks in which you have invested are losing value, you could get into a derivative contract in which you precisely predict the stock's value decline. You can profit from your derivatives contract by hedging your stock market losses as the stock price begins to fall. 2. Arbitrage A commodity or asset is purchased at a low price in one market and then sold at a much higher price in another market in arbitrage trading. Derivatives trading provides an advantage in terms of arbitrage trading, allowing you to profit from price disparities between markets. 3. Managing Market Volatility You can insulate yourself from the volatility of other asset classes by investing in derivatives. You can, for example, invest in stocks and then get into a derivatives contract with the same underlying asset. It can protect the health of your portfolio because either of the assets can offset the losses of the other. 4. Excellent investment opportunity While most traders enter the derivatives market to speculate and profit, it is also an excellent place to put any extra money. Without affecting any of your existing underlying equities, your funds will earn additional returns. Derivatives Market Participants 1. Hedgers They are the creators, manufacturers, and distributors of the underlying asset, and they typically sign into a derivative contract to reduce their risk. Simply defined, hedgers guarantee that they will receive a preset price for their assets and will not lose money if values fall in the future. For example, if you own shares in a company that is currently trading at Rs. 1000 and plan to sell them in three months, you don't want a drop in market prices to depreciate the value of your investment. You also don't want to miss out on profits if the market increases in value. You can assure that you are profitable regardless of whether the stock price falls or rises by taking a hedging position and paying a small premium. 2. Speculators These are real traders that try to forecast the future price of commodities based on a variety of criteria and keep track of their prices on a regular basis. If they believe the price of a certain item will rise, they will purchase a derivatives contract for that asset and sell it at expiration to profit. A speculator, for example, will wager that the stock price will not fall in the above example when you got into a derivatives contract to protect yourself against the stock price decreasing. The speculator will earn if the stock price does not decline during the specified period. 3. Margin Traders Margin traders are investors that trade on a daily basis and make profits and losses solely based on market moves that day. The margin refers to the minimum amount paid by the investor to the broker in order to participate in the derivatives market. These traders don't purchase and sell with their own money; instead, they borrow the money from a stockbroker as a margin. 4. Arbitrage Traders Arbitrageurs are traders who acquire securities at a cheaper price in one market and then sell them at a higher price in another. They can essentially profit from pricing differences because they are low-risk. Conclusion Investing in derivatives, like all other investment tools, demands a thorough grasp of the market and the ability to make decisions only after gaining sufficient knowledge. You can make good money using derivatives if you invest based on knowledge. As we mentioned earlier, tools are critical for your investment to go smoothly. At Zebu, a share broker company, we offer the best online trading platform for our investors, while also giving them an added advantage of lowest brokerage for intraday trading.