D'Street Articles
by Published on 17-07-10 12:02 AM- Categories:
- D'Street Articles
The Indian Cabinet on Thursday approved the new symbol for the Indian rupee – an amalgam of the Devnagiri 'Ra' and the Roman capital 'R' without the stem.
It was designed by D. Udaya Kumar, a student at the Indian Institute of Technology, who studied typography, scripts and ancient printing methods...Mr. Kumar’s winning entry was picked from more than 3,000 submissions and five finalists.He will get an award of Rs 2.5 lakh.
So, Indian rupee will soon have a unique symbol — joining elite currencies like the US dollar ($), Euro, British pound and Japanese yen in having a distinct identity.
The symbol will be adopted in a span of six months across the country, and within 18 to 24 months globally, Also it will feature on computer keyboards and softwares for worldwide use.by Published on 12-07-10 06:16 AM Number of Views: 324- Categories:
- D'Street Articles
Common Mistakes People Make In Option Trading
- Generally a small investor buys a option suppose at 5 ,when it becomes 6 or 7 he immediately sells it, but never sells when it becomes 3, even wait for last minutes on the expiry day hoping some miracle to happen, thereby losing his entire investment.
- Normal stop-loss theory will not work in case of option. It depends on the value of underlying and the days left in expiry.
- Buying and selling options at right price is very important as there is no much liquidity in most of time, so premiums are arbitrary, generally fixed to take small investors for a ride.
- Never buy options when News broke by so called "BREAKING NEWS" on television, as premiums are already up much before releasing the news.
- Never invest your whole allocated money in one option call hoping to multiply your capital overnight, as risk is equally high.
- Make disciplined investment in options at regular intervals with a little diversification.
...by Published on 07-07-10 06:40 AM- Categories:
- D'Street Articles
American-style option: An option that may be exercised at any time prior to expiration.
Arbitrage: The practice of buying and selling the same futures contract simultaneously on two different exchanges to profit from a price spread.
Arbitration: A forum for the fair and impartial settlement of disputes that the parties involved are unable to resolve between themselves. The NFA’s arbitration program provides a forum for resolving futures-related disputes. The NASD handles stock-related complaints.
Assignment: Notice to an option writer that an option has been exercised by the option holder. This can happen at any time during the life of an option with American-style options and only at or near expiration for European-style options.
Associated person (AP or broker): An individual who solicits orders, customers, or customer funds on behalf of a futures commission merchant, an introducing broker, a commodity trading advisor, or a commodity pool operator and who is registered with the Commodity Futures Trading Commission (CFTC) or the National Futures Association (NFA).
At-the-money: An option whose strike price is equal to the market value of the underlying futures contract. Can also refer to an order to buy a futures contract at the current bid-ask price (see Market order).
Automatic exercise: The exercise by the clearinghouse of an in-the-money option at expiration, unless the holder of the option submits specific instructions to the contrary.
Back spread: A spread in which more options are purchased than sold, with all options having the same underlying entity and expiring at the same time. Back spreads are usually delta-neutral.
Balloon option: Most often found in foreign exchange markets, these options provide for greater leverage to the holder. This is because the notional payments increase significantly after a set threshold is penetrated.
Bear market (bear/bearish): A market in which prices are declining. A market participant who believes that prices will move lower is called a “bear.” A news item is considered bearish if it is expected to produce lower prices.
Bear spread: Any spread in which a decline in the price of the underlying entity will increase the value of the spread.
Beta: A measure of how the options market correlates with the movement of the underlying market.
Bid: An offer to buy a specific quantity of a security or commodity at a stated price.
Board of trade (BOT): Any exchange or association of persons who are engaged in the business of buying or selling any commodity or receiving the same for sale on consignment. It usually means an exchange on which commodity futures and/or options are traded.
Box: A long call and a short put at one exercise price, and a short call and a long put at a different exercise price. All four options must have the same underlying entity and expire at the same time.
...by Published on 26-06-10 03:07 AM- Categories:
- D'Street Articles
Traditionally FX has not been the most popular market to trade because access to the foreign exchange market was primarily restricted to hedge funds, Commodity Trading Advisors who manage large amounts of capital, major corporations, and institutional investors due to regulation, capital requirements, and technology. One of the primary reasons why the foreign exchange market has traditionally been the market of choice for these large players is because the risk that a trader takes is fully customizable. That is, one trader could use a hundred times leverage while another may choose to not be leveraged at all. However, in recent years many firms have opened up the foreign exchange market to retail traders, providing leveraged trading as well as free instantaneous execution platforms, charts, and real-time news. As a result, foreign exchange trading has surged in popularity, increasing its attractiveness as an alternative asset class to trade. Many equity and futures traders have begun to add currencies into the mix ofproducts that they trade or have even switched to trading currencies exclusively. The reason why this trend is emerging is because these traders are beginning to realize that there are many attractive attributes to trading FX over equities or futures.
FX versus Equities
Here are some of the key attributes of trading spot foreign exchange compared
to the equities market.
FX Market Key Attribute s . Foreign exchange is the largest market in the world and has growing liquidity.
. There is 24-hour around-the-clock trading.
. Traders can profit in both bull and bear markets.
. Short selling is permitted without an uptick, and there are no trading curbs.
. Instant executable trading platform minimizes slippage and errors.
. Even though higher leverage increases risk, many traders see trading the FX market as getting more bang for the buck.
...by Published on 08-06-10 02:16 PM- Categories:
- D'Street Articles
Myth 1: The stock market is a form of gambling
Perhaps at the heart of many other stock market myths is the idea that investing in stocks is a form of gambling. Remarkably, I recently heard someone who was introduced as an "economist" say as much on a national radio news broadcast! As of this writing (1995), some of this myth has been dispelled by the relatively steady returns enjoyed by investors is recent years, versus the up and down markets experienced during the 1970s. Still, many folks consider stock investing to be fundamentally different than investing in bonds, certificates of deposit, and other more-predictable investments. To understand why stock investing is inherently different than gambling, first we need to review what common stocks are. In the most basic terms, a share of common stock entitles the owner of that share to a fraction of what is left over after all other stake holders in a business have been paid. So, the firm takes in revenue from customers in return for the firm's product, and with that revenue pays for raw materials, employee wages, energy, supplies, and pays interest on borrowed funds. Whatever is left over, if anything, belongs to the holders of the firm's stock, who are essentially the owners of the firm. Depending on business conditions and how well the company is managed, the amount left over for the shareholders can be very large, very small, or even negative. It is obvious that the common shareholders see more variability (risk) in what they take home than bondholders, raw material suppliers, employees or anyone else involved in the operation of the firm. The common shareholder stands last in line to be paid, and because of this additional risk the shareholder demands a higher expected return than does the bondholder. In the stock market, investors are constantly trying to assess what will be left over for the shareholders both now and in the future. This is why stock prices fluctuate -because the outlook for business conditions are always changing, and what will be left over for the owners of a particular firm is always changing too. But, one thing is for sure: common shareholders expect their returns to be volatile, but they also expect them to be positive and permanent over the long run -and higher than the return on bonds, treasury bills, or other less risky investments. That is, the shareholders don't expect to give up all their gains -despite the fluctuations in value, the returns at some point become permanent. For as long as common stocks have existed (hundreds of years), this expectation has been met: Stocks have had their ups and downs, but have trended steadily higher in value over the years. And, they have increased in value at a faster pace, on average, than dollars invested in more predictable vehicles such as bonds or treasury bills. It is this steady upward progression in the value of stocks that sets them apart from gambling in a major way. You could buy a set of stocks, and hold them for the rest of your life. Although they would fluctuate in value over your lifetime, chances are they would greatly increase in value during that period of time. However, no other person would have lost money simply because your portfolio of stocks gained in value. This is not true with gambling. In gambling, every dollar won is a dollar lost by someone else. It must be this way because gambling produces nothing, creates nothing, and therefore can only return to a winner what it took from a loser. The value of common stocks increases without taking wealth away from anyone; in fact when the stock prices increase, the amount of aggregate wealth increases for society as a whole. This is because common stockholders do produce something: ...
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