List of Stock Market Holidays in 2017 for NSE, BSE and MCX

Last updated on January 3rd, 2017

  Stock Market Trading Holidays 2017 for NSE, BSE and MCX 

Following is the list of trading holidays of year 2017 for Indian Stock markets namely NSE, BSE and MCX. So block your calendar!

NSE Holidays 2017/ BSE Holidays 2017 :

Sl NoHolidaysDate
1Republic Day
January 26, 2017
2Mahashivratri
February 24, 2017
3Holi
March 13, 2017
4Ram NavamiApril 04, 2017
5Good FridayApril 14, 2017
6Dr. Baba Saheb Ambedkar Jayanti
April 14, 2017
7Maharashtra DayMay 01, 2017
8Id-Ul-Fitr (Ramzan ID)June 26, 2017
9Independence Day
August 15, 2017
10Ganesh Chaturthi
August 25, 2017
11Mahatma Gandhi JayantiOctober 02, 2017
12Diwali-Laxmi Pujan
October 19, 2017
13Christmas
December 25, 2017

Stock Market Holidays India NSE 2017

You can find the NSE circular here

Muhurat Trading will be conducted on Thursday, October 19, 2017.Timings of Muhurat Trading shall be notified subsequently  by the exchanges.


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Following trading holidays fall on Saturday/Sundays :

Sl NoHolidaysDate
1Mahavir Jayanthi
April 09, 2017
2BhakridSeptember 02, 2017
3Dasera
September 30, 2017
4MoharramOctober 01, 2017
5Gurunanak JayanthiNovember 04, 2017

 

Holidays for Commodity Exchanges : MCX and NCDEX:

Sl NoHolidaysDateMorning SessionEvening Session
1New Years Day01-Jan-2017ClosedClosed
2Republic Day
January 26, 2017ClosedClosed
3Mahashivratri
February 24, 2017 ClosedOpen
4Holi
March 13, 2017 ClosedOpen
5Ram NavamiApril 04, 2017 ClosedOpen
6Mahavir jayanthiApril 09, 2017ClosedOpen
7Good FridayApril 14, 2017ClosedClosed
8Dr. Baba Saheb Ambedkar Jayanti
April 14, 2017ClosedOpen
9Maharashtra DayMay 01, 2017ClosedClosed
10Buddha PoornimaMay 10, 2017ClosedClosed
11Id-Ul-Fitr (Ramzan ID)June 26, 2017ClosedOpen
12Independence Day
August 15, 2017ClosedClosed
13Ganesh Chaturthi
August 25, 2017ClosedOpen
14BakridSeptember 02, 2017ClosedOpen
15DasseraSeptember 30, 2017ClosedOpen
16MoharumOctober 01, 2017ClosedOpen
17Mahatma Gandhi JayantiOctober 02, 2017ClosedClosed
18Diwali-Laxmi Pujan
October 19, 2017ClosedOpen
19Diwali-Balipratipada
October 20, 2016ClosedOpen
20Gurunanak janthiNovember 04, 2017ClosedOpen
21Id E MiladNovember 30, 2017ClosedOpen
22Christmas
December 25, 2017ClosedClosed

Morning session means from 10AM to 5PM and Evening session means 5PM to 11.30/11.55PM

 

Trade Academy Online Technical Analysis Course Details

Last updated on February 21st, 2017

Trade Academy Review

Quite often, new entrants to stock markets are intrigued by the complex jargon and terminologies. Without understanding the basics of the markets, they test the water with both feet and what would have been a successful journey in the markets ends abruptly even before it begins They just simply don’t know where to start with and whom to approach for any help.

Though there are plenty of materials available online, certainly a class room like environment where they can interact with the tutor and fellow participants is missing. There are few institutions offering the classes but they are mainly located in metros and not convenient in many aspects even for traders from those cities.

Good news is that recently there is an initiative of such kind by tradeacademy.in which promises to address all these concerns. They realized that videos are the best way to educate both beginners and who are at intermediate level. If a picture worth a thousand words, then video should definitely worth a million, isn’t it?. Also anybody sitting at any corner of the globe can watch it at their convenient and benefit from it.

Embedded below is one of such video just for you to asses the quality of the content. We highly recommend you to watch this video by Mr. Prateek Singh from tradeacademy.in

 

About Tradeacademy

Tradeacademy.in is yet another initiative from founders of one of the India’s premier brokerage house in India Upstox (RKSV) having decades of experience in financial industry. Since they also started as traders before starting RKSV, they know the hardship every new comers goes through in stock markets, so one can expect best from them.

tradeacademy

We have written a detailed review about RKSV (Now Upstox). You can read it at Upstox Review page.

Free Videos

Basically, the tradeacademy.in is organised into two parts, the free videos and the paid webinars. The free videos introduce basics of Stock markets, assumptions in technical analysis, basics of options etc.

Once you visit tradeacademy.in, click on the “courses” tab to check out the free videos.

tradeacademy-review

You will find 13 courses containing around 51 videos ranging from Chart patterns to indicators and financial planning. Please check out each videos to learn basics of each topic.

Paid Webinars

Trade academy also offers webinars which they call as certification course in technical analysis simply because of the one to one teaching methodology they have adopted. Also the attendees will be provided with the certificates on course completion.

Course Schedule

Course timing is scheduled in the evening at 7PM on the alternate days so as to suit the working professionals and also to enable the participants to evaluate their learning next day during the market hours. It helps them to get their doubts clarified during the next day with the tutor. 

In case someone miss a session, tradeacademy is providing two options:

  • To re-attend the next session during the following week. Attendee will be provided with two months access
  • Access to all recordings of the classes

Course Content

The course content is split into 6 parts. First three will be basics and remaining are little advanced topics

1) Candlestick Charting:

radeacademy-candlesticks

It is widely known that Japanese used the candlesticks charting methods to great profitability in rice trading during 19th century. In this webinar, you will be taught how you can apply the same techniques to Indian markets. In this two hour class you will get good grasp of some of the most profitable setups using candlestick.

2) Chart patterns:

tradeacademy-chartpatterns

You will learn what is support and resistance, why the stock prices behaves in a particular manner at a given price region. Historically it is observed that price of a stock behaves in a predictable manner whenever it forms a patterns. In this webinar, you will be taught which are the high probability patterns and how to identify them correctly. You will also learn about exact entry and exit points for each chart patterns.

3) Options Decoded:

tradeacademy-options

This course lays foundation for the next level of trading that is derivatives. It will have brief introduction about options geeks and how we can use them for our benefit using support and resistance. Options are gold mines if traded properly and on the other hand one can loose the entire amount invested. This webinar teaches some common mistake option traders commits and how to overcome them.

4) Newton Method:

tradeacademy-newton

This session teaches how to trade using the price action. Experienced traders know that price is the KING and this method is based purely on price. Tradeacademy claims that it has around 75% succes rate with 1:2 risk-reward ratio. With Newton’s method, one will be able to leverage all the knowledge they already acquired by now for stock picking, to determine entry and stop loss, set target price and trail stop loss and also effective money mangement.

5) Advanced trading Platforms:

tradeacademy-trading-platforms

Nobody can succeed in any profession without the right tools, so as the trading in stock markets. You will be introduced with the advanced tools available in the market with more emphasis towards upstox since it is from RKSV. You will be explained with various indicators, drawing tools and also how to generate actionable trade report. In fact you can use the data for your tax filing purpose.

Also Read : 10 Best Trading Platforms of India

6) Trading Opportunities:

tradeacademy-trading-oppurtunities
This is the interesting part of the course. No course is complete and useful until it has some practical hands on session. In this two hours participants will be taught how to spot the ongoing chart patterns, identify the trade-able patterns. One can get their picks reviewed by the mentors.

Whats so Unique about this course?

All in all, the course looks value for money. Moreover it stands out from many online courses in many ways.

  1. Its a live course, unlike going through the videos, you can ask question in real time and get clarified
  2. Convenient time : Even if you miss any webinar, you will be provided with access to the recorded session for two months
  3. Mentor-student Atmosphere : You will be hand held till you understand the concept
  4. The content is specifically designed in the context of Indian market by veteran Indian trader
  5. Opportunity to make trading buddies, discuss the trade set up and brainstorm even after the course is complete
  6. You will provided with the certificate of course completion

Course Fee

As an introductory offer, there will be a discount of Rs 5000 on the course fee of Rs 11,000. So all in all you will pay only Rs 6,000 as course fee if you enroll before the offer ends.

Offers

Now the best part. If you like what you just read and wants to enroll then there are multiple offers lined up

  1. Since it is backed by RKSV, they are offering brokerage credit of Rs 2000 to the participants who completes this course. So in effect, your course fee is further reduced to Rs 4000.
  2. Money back Offer: If you are not satisfied with the course, which will not be true in many cases, you can request for refund of the course fee before second session. Your fee will be refunded and no questions will be asked.

And oh yes, if you know any other institution offering similar kind of education, please share for the benefits of the visitors through comments

Best Mobile Share Trading Apps in India

Last updated on January 11th, 2017

  Best Mobile Trading Apps in India

    Forget about 80’s and 90’s when traders used to wait for next day’s news paper to know price of their stocks, till recently traders were paying the broker for the trading platform and the data-feed for it. But nowadays technology has become major distinguishing factor between two Stock brokers. The broker who does not offer latest trading platform with must have features is left behind in the competition.

When we say Trading Platform, it also include Trading Apps for Mobile and Tablets given that we have entered the “Post -PC” era. So more and more brokers are concentrating their effort on providing Best Mobile Share Trading Apps in India.

best-mobile-share-trading-apps-india

   In the previous article we have talked about some of India’s Best Trading Platforms mainly with focus on desktop and web based platforms. This article will be about Mobile platforms, for the traders who are always on move and have limited access to their system.

  Points to consider while choosing the Mobile Trading App

  •  Compatibility with your Smart Phone

The Mobile platform is the most important and primary thing to be considered while choosing the mobile applications, IOS & Android are two most preferred platforms while Windows and Blackberry are also widely used. It’s beneficial to know that which platform will be supported by your broker applications.

  •   Number of App Downloads

Higher the number of downloads, higher is the possibility of product being top notch. Check out the number of installation at Google play store or IPhone app store. It gives fair idea of how popular is the mobile app and also the stock Broker. 

  •   Review of the App

Who else can be better source of information than the real people who have used on their own and taken timeout to provide their feedback. Check the reviews on play store, but be wary of some of the fake reviews. App with highest rating necessarily need not be the best one.

  •   User Experience

     Mobile app is something you used to do on your computers and now you want to do the same thing on the go. Hence the user experience should be flawless with less clutter. You should not find yourself wondering where is the Buy or Sell button?!.

Following is the list of some of India’s Best Mobile Stock Trading Apps:

1) Zerodha Kite

 zerodha-kite-mobile-trading-app-android

   Zerodha’s web platform called “Kite” is India’s one of the minimalistic trading platform with lot of exciting builtin  features.  Mobile (Android) version of Kite is also available with intuitive UI. Zerodha is one of the leading discount broker operating in India with highest number of customers compared to its peers. Zerodha offers zero brokerage for all the investments and only Rs20/order for trading. It also has one of the most advanced desktop based platform called Zerodha PI (Trade like 2020). We have reviewed Zerodha brokerage in detail and you can read it here.

Watch Introduction to Zerodha Kite Android Mobile App on Youtube :

Some of the salient feature of Zerodha Kite – Android App are: 

  •  One-tap universal instrument search for all contracts across all exchanges — NSE, BSE, MCX
  •  Live streaming data
  •  Multiple marketwatch and live market depths
  •  Advanced chart with 100+ indicators
  •  Years worth of free historical chart data
  •  Trade Equities, F&O, Commodities, Currency
  •  Various order types: Regular, AMO, BO (Bracket orders), CO (Cover orders)

  2) RKSV Upstox

rksv-upstox-mobile-trading-app

  RKSV is another premier discount brokerage house (RKSV Review) offering Rs20/order brokerage. Android version of its desktop trading platform called Upstox is available to the traders who are on the move.

Watch Introduction to RKSV Upstox Mobile App on Youtube :

Some of the salient features of Upstox Mobile are: 

  • Live streaming prices from NSE F&O, NSE Cash, BSE Cash, NSE Currency and BSE Currency
  • Candlestick and Line charts
  • Limit, Market and Stop Loss orders
  • Advanced order types such as Cover Orders
  •  View your account balance and margin limits realtime

 

 3) Angel Broking Mobile App

angel-broking-mobile-app

Angel Broking (Angel Broking Review) is one of the Top 10 Stock Broker of India with branches all over the country.  Along with their Desktop trading software (Speed Pro) and web based platform (Angel EYE), Angel Broking also has mobile based application with lot of good features.

Some of the salient feature of Angel Broking Mobile Trading App are : 

  • View multiple Index with real time prices, Streaming Market Watch
  • Intraday charts & news, live updates about top-gainers & losers
  • Create customized device watchlists
  • Trade across all segments with utmost convenience
  • View Trade Reports, Limits & Holdings at anytime and from anywhere.
  • Access your Ledgers, Contract note, P&L statements at one click.
  • Transfer funds & securities from a single place

  4) Motilal Oswal Mobile App

motilal-oswal-mobile-trading-app

Motilal Oswal Securities (Motilal Oswal Brokerage Review) is yet another reputed Stock broker with network spread over 520 cities and towns comprising 1,743 Business Locations. Trade on the go through their mobile platform which works on both mobile and tablets. It is available on Android and Black Berry devices 

Watch Motilal Oswal Mobile App Introduction on Youtube :

  Some of the key features of Motilal Oswal mobile platform are: 

  • Super-Fast trading across Equities, Derivatives, Commodities, Currencies,investment in Mutual Funds & IPOs
  • Real-time portfolio monitoring tools to help to make investment decisions on the move
  • Quick and convenient, one-time login feature along with a secured trading experience

  5) TradePlusOnline Mobile App

Tradeplus is Chennai based Stock Broker in the industry from 1983 and Tradeplusonline is their integrated online brand. Tradeplusonline offers lowest monthly  brokerage plans in India. More details about their brokerage plans can be found at TradeplusOnline review page.  

Tradeplusonline has recently launched mobile app through which user can carryout all the tasks possible through desktop/web based interfaces.

Watch Tradeplus Mobile Introduction on Youtube :

Some of the salient Feature of Tradeplus Mobile App are: 

  • View your trading Ledger balance across segments.
  • View your open positions
  • View your DP stocks with haircut valuations.
  • Single login access for all your linked accounts.
  • Make a request for funds payout.
  •  Transfer funds using payment gateway to your equity or commodity trading ledger. 
  • View your current stock alerts
  • No longer need to send mails to client service. Just send message to client service from Tradeplus Mobile for faster response.

  Open Account with TradePlusOnline - Get Mobile App for Free!

  Sharing is Caring!

Have you used any of the Mobile Trading Apps listed above?. If yes, please share your experience with fellow Indian traders through the comments below. And oh yes!, if you liked the article, consider it sharing it with your friends through the social buttons left/below. 

How to reduce the Short Term Capital Gain Tax on Shares

Last updated on January 12th, 2017

We are in the month of March and it is the last month of this financial year. Hope you had a profitable year!

If that is the case, you will be paying tax on your profit and file the return, Isn’t It?. In this post we are going to explain a trick through which you can reduce capital gain tax on sale of shares, legally.

how-to-save-capital-gain-tax-on-sale-of-shares

Before that let us quickly understand how the taxes are calculated in India.

  Tax Implication for transactions carried out on Stock Markets 

Tax calculation are different for Investors and Traders.

Investors: Investors have to pay 15% on Short term capital gain ( No tax on Long term Capital tax)

Traders: Traders have to pay tax as per the on going IT slab for the income from all the trading activities and salary (if any)

Let us understand with examples how tax can be saved in case of an Investor and a trader

  Example 1 : Investor

Mr. Salman is long term investor who buys and holds the equity shares for wealth creation. During April last year he had purchased shares of worth 1 lakh of “XYZ” company. Few days back, its value had increased to 2 lakh and Salman did in depth analysis to figure out that the value has peaked up and he sold them pocketing a cool 1 Lakh profit.

So Tax liability for Salman would be 15% of 1 Lakh profit = Rs 15000/-

Salman had also brought 1lakh worth of  shares of another company “ABC” at the same time of purchasing XYZ. But as on this March, its current market value has tanked to Rs20,000. But Salman is very confident of future growth potential of this company and dont want to sell a single share.

So, how can Salman save tax in the above scenario?

The trick is to sell shares of ABC before 31st March for Rs 20,000 and book a loss of Rs 80, 000. By doing this, Salman will be reducing the cumulative short term gain to Rs 20, 000 [ Rs 1,00,000 (Profit on XYZ) – Rs 80,000(loss on ABC) ]

New Tax liability for Salman would be 15% of Rs 20,000 profit = Rs 3,000/-

Now, since he believes in future prospective of ABC, all he has to do is to buy share of it worth Rs 20,000 again (after two days).

Yes, you see, Salman has cleverly saved Rs12,000 on tax by simply booking loss in ABC which otherwise he would have simply held it anyway.

This technique is called Tax Loss Harvesting in taxation parlance

  Example 2 : Trader

Mr. Kapil is active trader doing intraday and F&O trades regularly. He also carries out few positional trades spanning few weeks. He also purchased shares of companies ABC and XYZ at the same price as that of Salman.

After carrying out all the calculation about his trades including F&O and Intraday, he found out that his total taxable income is Rs 5,00,000 and he is in 30% IT slab

So Tax liability for Kapil would be 30% of 5 Lakh = Rs 1,50,000/-

Now, using above technique he did offset Rs80,000 loss resulting in taxable income as Rs 4,20,000.

Therefore new Tax that has to be paid would be 30% of Rs 4,20,000 =  Rs 1,26,000/-

Total Saving is Rs 1,50,000 – Rs 1,26,000 = Rs 24,000/- (Without much effort!!)

  What if my loss itself is more than the gain?

Suppose the loss which you are going to book is more than the profit you made, then you can offset the entire gain amount and also carry forward the remaining loss value upto next 7 consecutive years!

  What about Commissions?

Ofcourse, when you sell and buy back the shares are mentioned above, there will be some expenses you are going to incur such as brokerage charges, statutory taxes etc.  But there could be situations in which the reduction on tax will be more than these charges.

Thankfully there are some brokerage houses which charge zero brokerage for delivery transactions. These kind of brokers make this technique to click in a big way. At present brokerage firms such as Zerodha and RKSV are offering zero brokerage for all the investments. 

You can go through the review of these brokers below to understand it in detail.

Zerodha: Zerodha Brokerage Charges for various categories

RKSV : RKSV Brokerage Charges for Various categories

  How to identify this opportunity in your portfolio?

Identifying which share to sell to offset the tax gain is very straight forward. Simply find out the shares you purchased in this financial year which are making loss and just sell them.

If you have done too much transactions and finding it difficult, you can contact your broker and get their assistance.

In Zerodha Q, which is their backoffice, it creates a report like the one shown in below screenshot which will show you the possible tax Loss harvesting opportunity.

zerodha-tax-loss-harvesting-opportunity

If you are looking for more information about it, you can simply

   Is it Legal?

Offcourse it is!. All you are doing is just offsetting the gain with the loss and it is just treated as another normal transaction.

  Sharing is Definitely Caring!:

Hope the article was useful for you. you can find more such interesting and informative articles at our Archives page

Also Read : Details of 10 Best Online Discount Brokers in India

And oh yes!, you can share this article with your family and friends through the social buttons on your left/below.

Stock Market Holidays 2016 list for NSE, BSE and MCX

Last updated on January 11th, 2017

  Stock Market Trading Holidays 2016 for NSE, BSE and MCX 

Following is the list of trading holidays of year 2016 for Indian Stock markets namely NSE, BSE and MCX. So block your calendar!

Sl NoDateDayHoliday
1January 26, 2016TuesdayRepublic Day
2March 07, 2016 Monday Mahashivratri
3March 24, 2016 ThursdayHoli
4March 25, 2016FridayGood Friday
5April 14, 2016ThursdayDr. Baba Saheb Ambedkar Jayanti
6April 15, 2016 FridayRam Navami
7April 19, 2016 TuesdayMahavir Jayanti
8July 06, 2016WednesdayId-Ul-Fitr (Ramzan ID)
9August 15, 2016 MondayIndependence Day
10September 05, 2016MondayGanesh Chaturthi
11September 13, 2016 TuesdayBakri ID
12October 11, 2016 TuesdayDasera
13October 12, 2016WednesdayMoharram
14October 31, 2016MondayDiwali-Balipratipada
15November 14, 2016 MondayGurunanak Jayanti

Stock Market Holidays India NSE 2016

You can find the NSE circular here

Muhurat Trading will be conducted on Sunday, October 30, 2016.Timings of Muhurat Trading shall be notified subsequently  by the exchanges.

What happens during Pre-Open Session & How it works?

Last updated on April 16th, 2016

  Requirement for Pre-Open Market Session

Before year 2010, the the price at which the first matched order of the day gets executed was considered as opening price of that day. This was resulting in tremendous volatility in the stock markets during the beginning of the day especially where there was a overnight events like election results, announcement of critical government policies etc.

With intention to reduce this volatility, the exchanges came up with an innovative method to arrive at the opening price of the day. The method used is very interesting one. Let us understand how the opening price is discovered during the pre-open market session in NSE and BSE in this post.

  Timings of Pre-Open Market Session

A 15 minute period between 9.00AM -9.15AM before the normal market open is called the Pre-Open session. This duration is used at arriving the ideal opening price. This 15 minute period is broken down into three slabs. The details are given in the below table

SessionTimeAction
Order Entry Period9:00am - 9:07/08amThe client can place new orders, modify / delete the orders. The order entry can stop randomly between 7th and 8th minute.
Price Discovery Period
(Order Matching & Confirmation Period)
9:08am - 9.12amThe exchange arrives at the Opening Price, trades the matchable orders at Opening Price. The client cannot modify or delete the orders during this period
Buffer Period9:08am - 9.12amUsed as transition period between pre open and continuous trading sessionBottom of Form
Normal Market9:15am – 3:30pm9:15am– 3:30pm

  Finding the Equilibrium Price

The opening price of the day is determined by finding the equilibrium price during the pre-opening session. It is very difficult to explain the entire process in words. So let us understand this by taking an example.

Let’s say a scrip had closed at Rs 100 in previous day and during the pre-opening session, exchanges received the orders something like this.

PriceBuyerBuy Order QuantitySellerSell Order Quantity
105Trader H250
104Trader G300
103Trader A200Trader F500
102Trader B700Trader E100
101Trader C400
100Trader D1000

Interpretation of the above table:

Trader A is telling that he is interested to buy 200 shares of the company if and only if he get the price less than or equal to Rs 103. Similarly Trader B is ready to buy 700 shares when price is less than or equal to Rs 102. And nobody is interested to buy above Rs 103.

Similarly on sell side, trader E wants to sell 100 shares if he gets the price of Rs 102 or above. Trader F wants to sell 500 shares only if the price is equal or greater than Rs 103. And nobody wants to sell if the price is less than Rs 102

Now let us two more columns to above table, “Total Buy Quantity” and “Total Sell Order Quantity” 

PriceBuyerBuy Order QuantityTotal Buy Order QuantityTotal Sell Order QuantitySell Order QuantitySeller
1051150250Trader H
104900300Trader G
103Trader A200200600500Trader F
102Trader B700900100100Trader E
101Trader C4001300
100Trader D10002300

Trader A is ready to buy at less than Rs 103 and Trader B at Rs 102. So at Rs 102, both Trader A and B are willing buy. Hence exchanges has to match total 200 (Trader A’s) + 700 (Trader B’s) = 900 quantities at Rs 102. Similarly 1300 at Rs 101 and 2300 at Rs 100.

On sell side, there will be 100 quantities available to be sold at Rs 102 and 600 at Rs 103, 900 at Rs 104 and 1150 at Rs 105.

Now let us add one more column into the above table, “Trade-able Quantities”

PriceBuyerBuy Order QuantityTotal Buy Order QuantityTrade-able QuantitiesTotal Sell Order QuantitySell Order QuantitySeller
1051150250Trader H
104900300Trader G
103Trader A200200200600500Trader F
102Trader B700900100100100Trader E
101Trader C4001300
100Trader D10002300

At Rs 102, even though there are orders to buy 900 quantities, sellers are ready to sell only 100 quantities.

At Rs 103, even though sellers are ready to sell 600 shares, buyers are interested in only 200 quantities. There is no others prices where any orders can be matched. 

Now the equilibrium price is the price at which maximum orders can be matched. Since at Rs 103, 200 quantities can be matched which is greater than the 100 quantities at Rs 102, Rs 103 is considered as opening price of the day.

PriceBuyerBuy Order QuantityTotal Buy Order QuantityTrade-able QuantitiesTotal Sell Order QuantitySell Order QuantitySeller
1051150250Trader H
104900300Trader G
103Trader A200200200600500Trader F
102Trader B700900100100100Trader E
101Trader C4001300
100Trader D10002300

  Consideration for various scenarios

The above is overly simplified for the sake of understanding. But the opening price discovery algorithm executed by exchanges are very complex and designed to handle various special scenarios.

Scenario 1 : Two matching maximum trade-able quantity for different share prices

Consider the below scenario, there are two equal highest trade-able quantity for the prices at Rs 8020 and Rs 8025.

PriceBuy Order QuantityTotal Buy Order QuantityTrade-able QuantitiesTotal Sell Order QuantitySell Order QuantityUnMatched Quantities
803525025025021502501900
803060085085019003501050
8025200105010501550500500
8020600165010501050200600
801535020008508507501150
800030023001001001002200

In these kind of scenario, the price at which minimum number of unmatched quantities (quantities left over after matching the trade-able quantities) are present is considered as equilibrium price.

In the above example the unmatched quantities at Rs 8020 (600) is more than at rs 8025 (500). Hence Rs 8020 is considered are the equilibrium price.

Scenario 2 : Two matching maximum trade-able quantity for different share prices and same unmatched quantities too!

Consider this scenario, now the unmatched quantities are also same.

PriceBuy Order QuantityTotal Buy Order QuantityTrade-able QuantitiesTotal Sell Order QuantitySell Order QuantityUnMatched Quantities
803525025025022502502000
803060085085020003501150
8025300115011501650500500
8020500165011501150300500
801535020008508507501150
800030023001001001002200

In this case, the previous days closing price is involved and the price which is closer to closing price will be equilibrium price. Suppose the the previous day’s close is Rs 8000, then as the price 8020 is closer to 8000 than 8025, it is considered as equilibrium price

Scenario 3 : Two matching maximum trade-able quantities with same unmatched quantities and share price are equally distanced from previous closing price!!

In the above example, suppose the closing price was Rs 8022.5, then both Rs 8020 and Rs 8025 are at equal distant from the closing price. In these kind of scenarios, the closing price (Rs 8022.5) itself is considered as equilibrium price

  Important Points to remember about Pre-Open Session

Below are some of the important points to be remembered about pre-open market session

  • Pre-Open session is  not available in Futures & Options Segment (F&O)
  • Pre-Open market orders can be placed in the scrips of NIFTY & Sensex indices (Subject to Change)
  • Pre-Open orders can be placed in Cash/Margin/Intraday segments
  • Orders cannot be placed beyond +20% of previous day’s closing price
  • All the limit orders that are not traded during the Pre-Open market are normal trading session at the same price
  • Market Orders that are not traded during Pre-Open session will be moved to normal trading session at opening Price.
  • If Opening Price is not discovered during Pre-Open session, then the market orders will be shifted to Normal trading session at Previous Day Closing Price.

Read : Top 10 Cheap and Best Discount Stock Brokers of India 

Also Read : What is a Demat Account and What is the Procedure to open it online?

 

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How to save STT on ITM options on expiry day

Last updated on April 16th, 2016

  How to save STT on In The Money (ITM) options on expiry day

During a casual meeting in a park, Ram was boasting to his new friend Shyam how he made a killing by trading the options last month. He was also ecstatic on how he saved on brokerage charges by letting the In The Money (ITM) options to expire instead of selling it on the last day of expiry.

Hearing the last sentence, Shyam asked “How did you do that? Can you explain me a bit?”

Ram -> “See Shyam, If we let the ITM options to expire, then they will be settled at closing price of the day and it will not be treated as trade, hence we don’t have to pay any brokerage for it, wasn’t it a smart move from me?”.

Shyam is a seasoned player in options market and know about various charges involved with it.

“What if I say, it was not that smart act as you thought it to be!”, Chuckled Shyam.

“Yes, though you saved peanut with brokerage, you did let go huge amount in terms of STT”, added shyam

“What?!, can you elaborate it to me?”, asked Ram with puzzled look

HIGH Securities Transaction Tax 9STT) on Expiry DAY of OPTIONS INDIA

Below is the summary of the explanation given by Shyam.

Lets take an example of NIFTY to understand it clearly.

Assume on 1st of October you bought 750 (10 lots) of nifty call options of strike price 8000 for premium of 150 in anticipation of market moving higher. The market indeed moved higher to 8400 by the last day of expiry.

Now near the end of the day you have two choices

  1. To let the options expire ( in this case the closing price of Nifty is used for calculation)
  2. Punch the order and sell the options.

  Securities Transaction Tax (STT) rates for Options

But the tax treatment for the above two cases make all the difference. See the NSE circular on the STT tax slabs

Security Transaction Charges India

Percentage of STT levied is different for two cases,

  1. The STT will be charged at 0.017% , if you sell it
  2. The STT will be charged at 0.125% , if you let it expire  

But the percentages will not tell all the real story until you read the next part of the circular

STT NSE India Options

  1. The tax is calculated on the premium Value, when you sell it
  2. The tax is calculated on the Settlement Price, when you let it expire!

Let us illustrate it for the example we have taken above.

Securities Transaction Charges options on expiry

So as you can see, Ram did away with Rs 7800 to save just Rs 20 brokerage charges. Yes, few discount brokers charge as low as Rs 20 per executed order. Read following article on lowest brokerage charges in India

  But how to know closing price in advance?

If you are new to stock market or if you dont know, the closing price of the day is not same as last traded price (LTP). The last traded price is the rate at which last transaction of the day is executed. However, closing price of the day is average price of the last 30 minutes of the trade. The traded price of each minute (of last 30 min) is added up and divided by 30 to arrive at the closing price of the day.

Instead of manually doing the calculation, let us show you a trick to find out the closing price in advance. Most of the trading tools will have the moving average facility in the charting window. Simply change the chart period to 1 min and plot the 30 period simple moving average on it. By 3.25PM, you will have fair idea of closing price of the day.

If you don’t have any trading software, simply go to google finance to do the same. But the catch is , google finance provides only 2-min chart. Hence, you should plot the 15 min simple moving average.

NSE NIFTY SMA

  But why two cases are treated differently?

Buying an options gives the buyer right to buy the shares but not obliged to buy at the expiry or within the expiry. Also in India, the derivative contracts are cash settled. So, if you are not selling the options till the expiry, it is assumed that you are ready to take the delivery (in this case,it is cash settled) and treated with STT rate for delivery which is 0.125%

*Read : Introduction to demat account and procedure to open it online

  Conclusion :

  • It is better to sell the In The Money (ITM) options near the end of the day instead of letting it expire
  • Do remember that, above discussion holds good only for ITM options and not for Out of The Money (OTM) options
  • Also remember, STT is levied only on sell side, hence you can short sell an options and not buy it back during expiry as you have already paid normal STT on short selling.

Ram learnt the lesson hard way.  Let us learn from Ram’s mistake and be smart and profitable traders.

Hope you liked this post, you can find more such interesting and informative articles at our Archives page. You can also subscribe to our blog posts through the subscription box below to receive the next post at your Inbox.

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Lowest Brokerage Charges In India for Options Trading

Last updated on January 12th, 2017

Options trading is always considered as another form of gambling. Though they are meant for hedging, in India many retail traders directly trade options (Naked trading). The options price is determined by many parameters and if not traded properly your money can vanish in thin air within no time. On the other hand, they can provide high reward also. But if you have what it takes to trade this double edged sword, you need to look for a reliable broker who offers Lowest brokerage charges in India for options trading. In this article, we have tried to find out the best broker who charges minimum commission rate for Options trading in India.

Lowest Brokerage in India

Methodology used to identify India’s Cheapest Stock broker for Option Trading

We have assumed certain parameters for our analysis.

  • NSE Nifty options are considered for calculation as it is widely used and most liquid
  • Premium Value of Nifty (CE or PE) at value of 8000 –  Rs 150 (approx) for both buy and sell
  • Nifty lot size is 25, premium value will be Rs 7500 (Rs 3750 on each side) for one lot
  • 22 Trading days per month are assumed
  • Same Brokerage charges for Intraday trading as well as over night positions

While we made above assumptions, we straight away excluded Full Service Brokers who charge brokerage on per lot basis hence they will never be a choice of traders as far as options trading is concerned. We will quantify the amount at the end of this article.

So we have left with discount brokers who charge competitive flat brokerage amount for online trading irrespective of size of the trade. We have talked about Top 10 Flat Brokerage Stock Brokers of India in the past. Out of these ten, we are considering Zerodha, RKSV Securities and Tradejini for our analysis.

Reason being, though many discount brokers in India charge less than the above 3 brokers, it is not advisable to over emphasize only on lowest brokerage trading account as we have seen Unicon Securities going burst who used to charge Rs 5 per order. The brokers we considered are country’s largest discount brokers and it is always better to go with the leaders of the industry.

Cheapest Brokerage for different Options Trading Turnover

Now that we have shortlisted the brokers, it is time to select the cheap and best share broker for options trading in India.  For this, we need to consider one more parameter, i.e turnover.

Unless we know the average number of trades executed by you, it is difficult to arrive at the conclusion. So look at the table below. We tried to tabulate the charges of all the three brokers for different turnovers.

Number of Lots/DayZerodhaRKSV DreamRKSV PROTradejini
BrokerageTaxNet
/Month
BrokerageTaxNet
/Month
BrokerageTaxNet
/Month
FeeTaxesNet
/Month
1Lot/Day4011.1411254010.96112139995.3741174011.171125
10Lots/Day4057.0721354059.162181399953.5451764057.122136
50Lots/Day40264.93670840273.3668933999267.74988940264.986709
100Lots/Day40524.251241340541127823999535.51578040524.2512413

Net/Month = (Brokerage+tax)*22   [ for RKSV PRO Plan Net/Month =  Brokerage+ (tax*22) ]

All these three firms provide brokerage calculator at their website. Above values are arrived using respective calculators. Providing the brokerage calculator is another sign of transparency which helps the trader know exact charges he is going to incur based on his trade size without initiating the trade in actual. It is not the case with full service brokers where your brokerage depends upon your negotiating skills.

Analysis of the Results of Lowest Brokerage:

So depending upon your trading profile, we can zero on the suitable broker. The results will be even more clear if we put it in graphical form.


Tweet: Lowest Brokerage in India for Option trading, visit http://ctt.ec/aHe8_+Lowest Brokerage in India for Option trading

One of the Interesting finding of this analysis is about RKSV PRO Plan. RKSV Offers unlimited trading for Rs 3999. At the first Impression, it looks least brokerage charges for F&O. But as you see, when we add up the tax part to the fixed amount, RKSV PRO plan is NOT the lowest brokerage plan for Options trading irrespective of the trading volume. Their  Dream Plan will work out to be cheaper than the PRO plan when the net outflow is considered. But it is also worthwhile to note that in PRO plan, one can do unlimited trade not only in options but also in Equities and Futures. But as we are discussing only about options trading, this is not the best brokerage plan for options trading. You can read our detailed RKSV review at Review of RKSV page. Use below button to request free callback from RKSV Securities and discuss about their brokerage plans and trading platforms.

 

Tradejini’s Brokerage charges are more or less similar to that of Zerodha’s and there is no significance difference in the net outflow. Tradejini is currently offering 30 day’s of unlimited trading across all the segment like Equities, F&O, Commodities, Currencies on NSE, BSE, MCX and also demat account. You can find our detailed review at Tradejini Review page. Use below button to request free callback from Tradejini and discuss about their brokerage plans and trading platforms.

 

Zerodha is the leading discount broker of India who offers flat fee of Rs20 per trade and they don’t have any monthly brokerage plans. Zerodha have good track record since 2010 when they first introduced the discount broking concept to India. They also recognized for coming up with many technology initiatives and innovative ideas. You can read our detailed review in the Review of Zerodha page. Use below button to request free callback from Zerodha and discuss about their brokerage plans and trading platforms.

 

Now let us calculate the brokerage if we consider full service brokers. Their charges range from Rs70 to Rs130 per lot. Let us consider average of Rs100/lot.  For traders who trade one lot per day, monthly brokerage will be Rs100x2(buy & Sell)x22= Rs4400.

For traders who trade 100 lots/day, it will be whooping Rs100x2x22x100 = Rs 4,40,000/- in comparison to Rs 12,000 charged by discount brokers, hence full service broker are highly expensive for options trading. 

Conclusion from the analysis : Though there are many stock brokers offering lowest brokerage for options trading in India, we need to take many parameters into consideration. Discount Brokers offer considerable savings when compared to full service brokers. It is also important to always go with the leading discount brokers. It is not only brokerage but taxes also matter when net amount is considered. Hope you liked this post, you can find more such interesting and informative articles at our Archives page.

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Best Share Trading Platforms In India

Last updated on February 21st, 2017

When it comes to success in Stock market, one of the important factors apart from your trading strategy is the platform you use for the transaction. It is especially true if you are a day trader, where your profits can turn into losses in a fraction of second if the trading software is not reliable.

In this article, let us look at the best Share trading platforms in India, some of them are provided free of cost by the broker and for few others, you need to shell out monthly fees.

And if you are also looking for the Best trading apps for your smartphone, we suggest you to read the below article.

Read : Best Mobile Share Trading Apps of India

  1) Zerodha Pi

zerodha pi Trading platform

Zerodha Pi is next generation trading platform from leading discount broker Zerodha (Zerodha Review) which offers many features such as Integrated Charting with upto 50000 candles, more than 80 technical analysis indicators, algo trading etc. There is lot of buzz happening about the Zerodha PI as it is said to be most advanced trading platform offered as on today.  Some of the features of it are: 

  • Fastest platform in terms of speed of quotes updates
  • Best 5 bids and best 5 offers
  • Directly place an order from chart
  • For semi-automated trading – Bridge with AmiBroker and Metatrade

Watch Introduction to Zerodha Pi on youtube: 

 
To Know More about Pi Platform : You can visit Zerodha Pi – Trade Like it is Year 2020

As we are discussing about Zerodha, it also has another popular trading platform called KITE. It is a slick web based platform with simplicity and ease of use in mind.

Zerodha Kite

Kite can be access through Tablet and Mobile as well. Kite also comes with the feature to trade in 10 Indian regional languages. 

Read : Now Trade in Language of Your Choice

  2) Angel SpeedPro

Angel Speed Pro

Another excellent platform from Angel broking along with their Angel EYE. It is an application based portal with many power packed features. 

  • 30 days intraday and 20 years historical data with 70 + studies for advance technical analysis
  • Quick access to all account related information like My Portfolio, Trade Report, Funds Management and Backoffice Report.
  • Multi Desktop Options which gives freedom to arrange preferred windows/tools in multiple desktop screens and conveniently toggle between them.
  • Customizable Tool Bar to Control ribbon style menus and quick links.
  • Enriched features like News Flash, Open in Excel (Live market in excel with rate refresh), Combined Best Five,Heat Map Analysis, Intraday, Historic and Continuous Charts.
  • Other features like Online fund transfer (39 banks), Streaming Quotes and Multiple Exchanges.

 3) Upstox

RKSV Upstox

Upstox is an ultra light trading platform from one of the reputed discount broker RKSV (Read RKSV Review here) built in direct competition to Zerodha Kite. Upstox is web and app based platform designed keeping superior trading experience in mind.  Some of the salient features of Upstox are: 

  • Speed: Place your trades within 15 seconds
  • Bandwidth : Minimal use of Bandwidth
  • Security : Backed by 256 bit Encryption 
  • Fully regulated by SEBI; Licensed to trade on all leading exchanges
  • Universal Search across exchanges
  • Directly place an order from chart
  • Live tracking of Bracket orders.

  4) Sharekhan Trade Tiger

Sharekhan trade tiger

TradeTiger is one of the popular trading software of India from Sharekhan (Review of Sharekhan). It is said to be on of the excellent platform for day traders. You need to install the application at your system.  Some of the salient features of TradeTiger are 

  • A single platform for multiple exchange BSE & NSE (Cash & F&O), MCX, NCDEX, Currency, Mutual Funds, IPOs
  • Multiple Market Watch available on a Single Screen
  • Multiple Charts with Tick by Tick Intraday and End of Day Charting powered with various Studies
  • Graph Studies include Average, Band-Bollinger, Know SureThing, MACD etc
  • User-defined alert settings on an input Stock Price trigger 
  • Premium Calculator, Span Calculator
  • Shortcut key for FAST access to order placements & reports

  5) Motilal Oswal Desktop Trading

Motilal Oswal Desktop Trading Platform

         It is a executable Desktop Platform which needs to be installed in the system. It is best suited for the investors and traders who want live market watch and faster execution. 

      Some of the Key feature of this desktop based platforms are:

  • Super-fast trading execution with 1-second rate refresh
  • More than 40 technical indicators in a single scrip.
  • Interactive Risk Return Chart to choose from best combinations of the Portfolio
  • Trade guide signal – New generation trend guiding tool to auto-generate buy/sell ideas
  • Access to over 30,000 research reports across all asset classes in a single click

  6) ICICIDirect Trade Racer

ICICI Direct Trade racer

ICICdirect (Review of ICICIDirect) is a premier brokerage house who pioneered the online trading in the country. Their Trade Racer is advanced trading platform which provides you with Live streaming quotes & Research Calls, integrated fund transfer system along with multiple watch list facility. Power-packed with new features, TradeRacer gives power to the traders to identify market opportunities while enjoying the attractive new look and feel of the trading terminal.

It is free for customers who generate brokerage of more than Rs 750 in a month. For others, Rs 75 per month is charged towards subscription fee.

  7) IndiaInfoline Trade Terminal (TT)

IIFL Trade terminal

IIFL Trader Terminal is a comprehensive trading tool, with superior charting and analytical capabilities. It offers facility trade in cash, futures and options, mutual funds, IPOs, currencies and commodities, all in one screen on stock exchanges (BSE, NSE, MCX and NCDEX).

Some of the key features of TT are:

  • Streaming quotes, instant order confirmation, multiple market watches, alerts
  • Single-click access to depository, ledger, MTM profit/loss statement
  • Advanced charting options & technical analysis tools
  • Customizable view , Live-chat with customer care , Live research and news updates
  • Accessible from the desktop, over the web as well as mobile phones

  8) Kotak Keat Pro X

IIFL Trade terminal

KEAT Pro X is a free, simple and high-speed online trading software that gives you control over your trade, allows you to track the markets live as well as buy and sell securities online in real time. Live-streaming Stock Market data, Personalized Watchlists, Charting Tools and High Speed Execution  are the salient features of Keat Pro X

  9) HDFC Securities Blink

HDFC BLINK

Though little expensive, it is one of the good platform to trade. HDFC Securities charges Rs2999/- for 6 months towards subscription of the BLINK. Enrollment for longer duration upto 3 years are also available.

Faster order entry from Blink, Multiple Screens, Short keys for functions like Buy, Sell, Order Book, etc, Customizable color scheme are some of the features of BLINK.

  10) NSE NOW

nse now

NSE NEAT on Web (NOW) is India’s prominent online share trading software and used by many traders using mobile and tablets. Using NSE NOW one can Access NSE servers directly which boosts trade execution speed, eliminating downtime.  Day-wise and net-wise reports can be viewed. Information and alerts available via mobile, web or email. You can request and access advanced analytical graphs and charts. Many brokers like RKSV, Zerodha, Tradejini offer NOW along with their other platforms and it is very good for beginners.

Also Read : Best Share Brokers for online trading in India

  Conclusion

Nowadays, Every broker is introducing new features into their software to attract and retain the customers and each one claim their’s as the best trading platform/software in India. Anyway, the healthy competition is always good for the end customer i.e the traders and Investors.  If you have used any one of the above, please share your experience with other readers through comments. You can find more interesting and informative articles like this at our Archives page. You can also subscribe to our blog posts through the subscription box below to receive the next post at your Inbox.

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Image Credit: Respective Brokerage websites

10 Best Discount Stock Brokers in India

Last updated on February 21st, 2017

You’ve probably heard a lot about online discount stock brokers of India who can reduce your trading fees down to unbelievably low prices. Post 2010, the Indian traders have wide variety of brokerage plans to choose from and select the best discount stock brokers in India. Some of them provide their own demat account and some use third party dp to enable you to deal in Stock market. There is cut throat competition among them to become India’s biggest Share Broker. This article provides the list of 10 leading discount broking firms of the country.

Must Read : How to Choose Best Indian Sharebroker for Yourself?

Top 10 and Best discount stock brokers in india

Top 10 Discount Stock Brokers of India

 1) Zerodha

Incorporated in 2010, at present Zerodha is top discount stock brokerage firm in India by volume, Zerodha Logonumber of customers offering Zero brokerage brokerage account. It contributes more than 2% of the market turnover with its daily turnover crossing more than 7000 crores. It offers Rs 20 per executed order. They started with NSE NOW, which is still good for beginners and small investor. At present they offer Zerodha Pi (trade like it is 2020) which is an excellent platform for advanced traders.

zerodha-offer

Update: Starting from 01st December 2015, Zerodha has waived off all the brokerage charges for delivery based trades (Brokerage is charged only for Intraday and F&O Trades). More details can be found at  Zerodha Brokerage Review Page.

 2) SAS Online

SAS Online equity broker was incorporated in 1995, but started its discount brokerage operation in 2013 with headquarter at NewDelhi. SASonline logoSAS Online offers cheapest brokerage charges among the peers in India today at Rs 9 per executed order.  SAS Online also has monthly unlimited trading plans with Rs499 and Rs999. 

sas online open account

Update: At present SASOnline is Waiving off the Rs 200 Account opening fee. For details visit SAS Online Review Page

 3) Tradejini

TradeJini is new entrant to the market, but they have been successful in generating good faith among theTradeJini Logo trading fraternity thanks to their quick and prompt customer service. With more than 30 years of experience, its founders are able to understand the needs of traders of present times. TradeJini has its own dp, hence provide integrated trading platform for equity, F&O, Commodities and Currencies.

tradejiniBanner

Update: At present Tradejini is offering 30 days of unlimited free trading, more details can be found at Tradejini review page.

 4) RKSV Securities

RKSV also entered the market along with Zerodha. RKSV is another popular broking house based out of Mumbai providing one of the best online trading account with zero brokerage plan in India today. RKSV logoIt also offers Rs 20/Trade plan and free delivery based trades.  

RKKSV Securities Banner

Update: RKSV is too offering Zero Brokerage for delivery Trades . More details can be found at  RKSV Brokerage Review Page.

 5) TradeSmartOnline

Trade Smart Online is subsidiary of VNS Finance & Capital Services Ltd. VNS is a traditional brokerage company incorporated in 1994 which has good track record in Indian Share Market. trade Smart Online It also offers various plans which include percentage based, fixed charge based and monthly unlimited trading plans.

Trade Smart online Banner

Update: At present TradeSmartOnline is Waiving off 50% of Account opening fee and 50% cashBack on brokerage for first month. For details visit TradeSmartOnline Review Page

 6) TradePlusOnline 

Tradeplus Online share broker based out of Chennai is the new revamped online brand of Navia Markets Ltd. and Navia Commodities Broker Pvt. Ltd. tradeplusonline-logoThey currently offer unlimited trading for Rs 99/month on Options, Currencies & non-agri commodities and unlimited trading in futures for Rs 799/month. Navia markets has been in the industry since 1983 and through Tradeplus, they are offering discount brokerage services. TradePlusOnline is the first broker in to offer PayTM integration for their Value added Services.

 TradeplusOnline Banner

Update: At present TradePlus is offering Free Account opening, 1 month free charting software (worth Rs 499) and PayTM cashback offer up to 40%. For more details, visit TradePlusOnline Review page

 7)MyValueTrade

MyValueTrade is Noida based subsidiary of Master Trust Group incorporated in 1985. It started the discount brokerage service in August 2014.myvaluetrade logo Because of its large client base, it is able to exceed the turnover of more than 4500+ Crores per day. MyValueTrade offer Rs 10 per executed order for BSE, NSE and MCX exchanges in equity, currencies, derivatives and commodities segment.

MyValuetrade Banner

Update: At present MyValueTrade is offerring discount of Rs200 on account opening fee. For details visit MyValuetrade Review Page

  8) Bonanza Online

Though a Full Service broker offering wide range of services, Bonanza Online also has discount brokerage arm with brokerage rate as low as Rs 18 per order.Bonanza Online logo Bonanza has spread its trustworthy expertise all over the country with pan-India presence with more than 1784 outlets spread across 560 cities, also it is one of the fastest growing financial service provider with 5 mega group companies under it

Bonanza online open account

Update: At present Bonanza Online is Waiving off the Account opening fee. For details visit Bonanza Online Review Page

 9) CompositEdge

CompositEdge is a share broking company incorporated in 1995 in Bangalore and has large customer base in Karnataka. compositedge logo Companies brokerage plan is very unique. Traders will be charged Rs 18 per executed order until first 1000 traders and afterwards the brokerage reduces to Rs 15.  CompositEdge supports fully automated trading  (Algo Trading).

Read full review of CompositEdge : CompositEdge Review

 10) RK Global

RK Global started its retail broking business in 2004 at Kolkata for capital markets . RK Global offered the lowest brokerage at that time wit its Rs 9 per lot structure. RK Global LogoWith the increase in competition due to advent of discount brokers in 2010, they changed the fee structure to Rs9 per executed order. It also has Rs 999 monthly unlimited plan.

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 Over to YOU 

At present none of these online discount brokers feature among the largest stock broking companies of India such as ICICI Direct, Sharekhan and Kotak Securities. But they are growing at exponential rates and may catch up with full service brokers some day. One thing common among all these discount share brokers is reduced brokerage fees. Their brokerage is depend upon the executed order and not on the value of the order which is the case with Full Service Broker. They are able keep the charges at lowest possible levels as they employ fewer employees, fewer products and no research and advisory teams. But you should also keep certain points in mind while selecting the discount share brokers.

  • Brokerage Rates

  • While the cheapest commission rates are very important, don’t rely your decision entirely on this parameter only. Also look out for the other points listed below. Some of the stock brokers in this top ten list offer unlimited trading for a fixed monthly charges. These plans may better suited for high frequency traders rather fixed pay per trade plans.

  • Charges other than Brokerage

  • There will be other transaction fees associated with every stock brokers in India. These fees vary from broker to broker. But you should look for the one who clearly states these figures before hand. Always go with the share broker who displays brokerage calculator on their website, which is clearly sign of transparency. 

  • Customer Service

  • Visit each brokerage’s website and make sure the interface is intuitive and pleasing. This probably shouldn’t be too difficult because it’s entirely subjective. Check out the way your queries are answered. A good stock brokers should ideally create a service ticket for your query and see it closed to your satisfaction. 

  • Auto Square Off time

  • Since discount brokers are most suitable for day traders, the cut off time on the exchange matters to a great extent. A 10 minute extra time to close the position is very valuable.

  • Demat Account

  • Some of the discount brokers like Tradejini have their own DP, which is an added advantage as there will be seamless transfer of funds between the accounts for trading as well as Investing..

  • Software and Mobile apps

  • This is one of the most important parameters to keep in mind as some of you may be trading from office and firewall may be blocking the broker site or you are not permitted to install software at your system without administrator privileges.  Speak with the brokers about this before opening the account

     Whom do you think is India’s Best Online Stock Trading Broker? 

    That’s regarding the list of 10 best online discount stock brokers in India and their comparison. If you feel the list needs to modified with any other major stock brokers, kindly let us know. If you already have trading account with any one of the above, please share your ratings/critics through comments. 

    And oh yes!, If you think the article was useful, consider sharing it through the social sharing buttons on your left/below

    How Sensex is Calculated -Understanding Index formation

    Last updated on January 12th, 2017

    In the last post we understood the meaning of BSE Sensex and its uses. In this post let’s understand how to calculate Sensex.

    *Read: Sensex Meaning Simplified – What is Sensex?

    BSE SENSEX logo

    Continuing our analogy with Indian cricket team, we can understand how the companies are selected for Sensex.

    As you know well, players are selected to the Indian team based on various factors such as their performance in the domestic cricket, suitability to the current tournament etc. They are also selected by different categories such as batsman, bowler and wicket keeper.

    Similarly, companies are selected to Sensex from different sectors such banking, IT, Consumer goods etc

    But how the performance of a company is measured?

    Let us introduce a term called “Market Capitalization”.  If you are very new to market, it is very important to understand that, a company whose shares are trading at Rs 1000 may not be bigger or more valued than another company trading at Rs50. Value and Price are totally different. You should also consider the number of shares issued by both the companies.

    .How do we calculate the market capitalization of a company?

    .Just multiply the current share price with the number of shares issues by the company. With this you can compare value of two companies.

    We have shown the Market capitalization of Reliance and Maruti by taking the data from BSE website.

    Sl NoName of the CompanyCurrent Share PriceNumber of Shares (Lakhs)Market Capitalization (Crores)
    1Reliance919323297491
    2Maruti351630106227

    As you can see even though share price of Maruti is much higher, as you are aware reliance is much bigger and valued than the Maruti.

    But out of 323Lakhs shares of Reliance, some quantities are held by promoters and government etc. The remaining shares are called “Free float”.

    Don’t get confused by the fancy word. Just understand that Free float is nothing but the number of shares available for general public to buy/sell on the exchanges.

    Now if we calculate the market capitalization using Free float, it is called Free float market capitalization. As simple as that!.

    Following table displays the Free Float Market Capitalization data of two companies, which we have taken again from BSE website.

    Sl NoName of the CompanyCurrent Share PriceMarket Capitalization (Crores) Free Float market Capitalization (Crores)
    1Reliance919297491163904
    2Maruti351610622747701

    Like this, Free Float Market Capitalization is calculated for all the 5000 odd companies listed on the BSE and top 30 companies make it to the Sensex.

    Now we understood the team structure, but we need to arrive at the line up right?. Who is the Captain, Opening Batsman etc.

    Drawing parallel, all the companies in Sensex will not have same weightage. Depending on the Free Float Market Cap, each company is assigned with weightage percentage. Higher the Free Float Market cap, higher the weightage.

    We have calculated the weightage of each company in the following table.

    Sr NoCompany NameFree Float Market Cap (Cr)Weightage
    Sensex FFMC2429413100.00%
    1INFY2181228.98%
    2ITC2085698.59%
    3HDFCBANK2054998.46%
    4HDFC1989098.19%
    5ICICIBANK1935437.97%
    6RELIANCE1639046.75%
    7TCS1515556.24%
    8LT1407935.80%
    9TATAMOTORS1050614.32%
    10AXISBANK977914.03%
    11SBIN972434.00%
    12SUNPHARMA784983.23%
    13ONGC762503.14%
    14HINDUNILVR688262.83%
    15M&M535522.20%
    16BHARTIARTL515212.12%
    17WIPRO480871.98%
    18MARUTI477011.96%
    19DRREDDY396021.63%
    20HEROMOTOCO361871.49%
    21CIPLA352631.45%
    22NTPC343831.42%
    23COALINDIA342971.41%
    24BAJAJ-AUTO323511.33%
    25BHEL264581.09%
    26TATASTEEL252051.04%
    27SSLT247961.02%
    28GAIL209170.86%
    29HINDALCO197710.81%
    30TATAPOWER154770.64%

    You can also find the live value of Free Float Market Capitalization of Sensex here.

    But Hey, You still haven’t explained how BSE Sensex is calculated?!

    Value of the sensex can be calculated using the formula.

              Sensex = (Free Float market Cap/Base Value) X 100                    (a)

    All the terms in above formula are known except “Base Value”, isn’t it?

    BSE keeps adjusting the Base Value since companies do change in Sensex and because of special events like bonus issue and right issue.

    Base Value for the year 1978-79 was 100. (That means if you have invested Rs100 in sensex in 1978-79, you money would have grown to present value of the sensex!).

    But now the problem is BSE does not publish the current Base Value. So let’s do reverse calculation using the current Sensex value of 28835 using the above formula.

    Base Price   = (FFMC / Sensex) *100
                         = (2429413/28835) *100
    Base Price   = 8425.23 

    Now you can calculate the value of the Sensex any time using this Base value in formula (a) until BSE changes it!

    Just to summarize the steps on How Sensex is Calculated:

    1) Find out the outstanding shares of the company

    2) Derive the Free Float market Capitalization by multiplying the number of outstanding shares with current price

    3) Sort and select the top 30 companies with highest Free Float Market Capitalization

    4) Add  Free Float Market Capitalization of individual 30 companies

    5) Divide the by the Base Price and then multiply by 100 to arrive at value of Sensex

    Read : Best Stock Market Brokerage Companies in India

    Also Read : Introduction to Demat Account and Procedure to open it Online

    That’s all for now! And yeah, if you think this post was useful or interesting let us know by dropping  a comment or just sharing it through the social buttons on your left!

    .

    140 Years of fascinating history of Indian Bourses

    Last updated on January 12th, 2017

    History of Indian Stock Markets

    During the last Christmas holidays, We visited Mumbai along with our family and friends. The group included people from different age group and different background. Many of the must see tourist spots in the city found their names in our list by default. But we agreed to disagree on one thing. “A Baniyan Tree”.  

    Yes, you heard it right, a Baniyan tree. A majestic tree in Mumbai has something to do with History of Indian Stock Markets. Most of the stock market freaks of our group wanted to visit the place and get a snap/Selfie. But forced to drop the idea as majority was in favor of visiting marine drive

    This particular Baniyan tree witnessed the evaluation of stock market cult in India. Perhaps, under this tree, concept of share trading started evolving.

    It all Started under a Baniyan Tree

    Four Gujarati and a Parsi man used to meet under this Baniyan tree in front of Mumbai Town Hall during 1850’s. They used to informally trade in Cotton, but little they knew how their activities are going to transform lives of crores of people in future.  .

    As their group grew because of the famous “share mania”, they formed the association called “The Native Share and Stock Broker’s Association”. thus formed the first official stock exchange which was renamed as Bombay Stock Exchange (BSE) in 1875. 

    History-of-Stock-Markets-in-India

    Many stock broking firms in Mumbai are still family run business. They are named after the heads of the family. For example, DS Prabhudas Broking company (Now after the joint venture with Merrill Lynch, it is well known as DSP-Merrill Lynch)

    After changing the few building, a plot of land on which the current BSE building stands was acquired in 1928 and completely occupied in 1930. Indian Stock Markets have seen many turbulent and as well as golden times over the period of more than 150 years.

    The First mass participation from the general public came when Mr.Dhirubhai Ambani came up with Reliance IPO in 1980. The Bombay Stock Exchange introduced the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. Today Sensex is synonymous with stock market in India.

    *Read: Sensex meaning simplified – What is Sensex ?

    In 1991, Dr. Manmohan Singh as Finance Minister announced series of reforms which led to next surge in the retail participation in the bourses only to be disillusioned by Harshad Mehta Scam.

    *Also Read: How Harshad Mehta rigged the stock market.  

    Evolution of SEBI and NSE

    BSE was the numero uno among the stock exchanges of India until the Harshad Mehta Scam came out in public. In knee jerk reaction government set up the Security Exchange Board of India (SEBI) akin to of SEC of America.

    It also showed keen interest in setting up electronic clearing system and thus the National Stock Exchange (NSE) was born. NSE brought exceptional transparency, efficiency and professionalism to the system. It introduced many path breaking instruments such as equity derivatives. Today NSE counts for major portion of the turnover of Indian stock exchanges.

    The tree still stands at Horniman Circle Park near Flora Fountain. Hope we get chance to visit this “foundation” of Indian stock markets next time when we are in Mumbai.

    Also Read: Ten Best and Popular Indian Brokerage Companies

      Sharing is Definitely Caring!

    Hope you liked this post about History of Indian Stock Market, you can find more such interesting and informative articles at our Archives page. You can also subscribe to our blog post below to receive the next post at your Inbox.

    And oh yes!, please encourage by sharing this article through the social buttons on your left/below.

     

    Sensex meaning simplified – Why Sensex is required?

    Last updated on January 12th, 2017

    Sometimes we get attracted to something out of curiosity rather than interest. A shop has opened in our vicinity by name “Mensexchange”.  You see, though it sells only men’s apparel, there is no denying that people are curious about what is it really upto?!. The shop is getting lot of attention from the onlookers.

    BSE “Sensex” is one such term which attracts millions of people. We have seen many people around me who started exploring more out of curiosity and have now become regular players in the markets

    sensex meaning

    We believe that any complex things can be simplified with the help of an example. Let’s take example of Indian cricket team to understand the meaning of sensex.

    When somebody says, “Indian team is in great form and is expected to win against Australia”, what does he mean?Does he mean that everyone out of a billion Indians can play better cricket than somebody from Australia?

    He only means that, the 11 best cricketing talents of India are performing better than the ones of Australia. These 11 players are representation of the cricketing talent of India.

    Now on the similar lines, it is easy to understand that 30 best companies of India represent the health of country’s economy.

    An Index was formed taking the share price of each these 30 companies on a predefined manner by the Bombay Stock Exchange (BSE) and it was called SENSitivity indEX (SENSEX). So going by the definition, we can say that SENSEX is abbreviation for Bombay Stock Exchange’s Sensitivity Index.

    The credit of coining the term SESNEX goes to Mr. Deepak Mohani

    But why sensitive? Because the index  moves according to share price of individual companies.

    Indian team’s performance is sensitive to performance of each player, right?

    Now, whenever you hear “Sensex crashed 1000 points today” as breaking news, what can you make out of it?

    For this, for sake of simplicity assume that sensex is comprised of a single company whose share price is at Rs2000. Hence the value of the sensex is also 2000.  Now the company was making profit of Rs200 previous year and expected good result this year also. But today it announces that it could able to make only Rs100 this year. Everyone holding the shares starts selling them and the price reduces to Rs1000. Thus sensex, which is sensitive to share price of the company plunges 1000 points.

    In real case, sensex is cumulative movement of individual share prices. One of the player in the team may be struggling with the form, but the team could still be winning, you see.

    OK, We understood meaning of Sensex, But why do we need Sensex?

    1) Simple, you select your best team and compare with the 11 best talent of Australia and bet in. Similarly indices of two countries provide the tool for investors (Foreign investor especially) to chip in

    2) Few years back there was a online game called “Super selector”. You could select your own team and check your team performance with others. The Sensex is used as benchmark to compare with your portfolio. If you could beat the performance of sensex, your companies fared better that the top 30 companies of the country!. It shows your stock picking ability. Now you can understand why all the Mutual fund managers always thrive to beat sensex!

    This is all regarding the meaning of Sensex in simple words and its uses.  Following are the top 30 talents of Indian economy as on Today

    Sr NoCompany Name
    1INFY
    2ITC
    3HDFCBANK
    4HDFC
    5ICICIBANK
    6RELIANCE
    7TCS
    8LT
    9TATAMOTORS
    10AXISBANK
    11SBIN
    12SUNPHARMA
    13ONGC
    14HINDUNILVR
    15M&M
    16BHARTIARTL
    17WIPRO
    18MARUTI
    19DRREDDY
    20HEROMOTOCO
    21CIPLA
    22NTPC
    23COALINDIA
    24BAJAJ-AUTO
    25BHEL
    26TATASTEEL
    27SSLT
    28GAIL
    29HINDALCO
    30TATAPOWER

    *Read : Meaning of Demat Account and how to open it online

    *Also Read: Top 10 Stock Brokers Of India

    How did you get attracted to sensex? what was your first impression, let us now through comments!

    Hope you liked this post, you can find more such interesting and informative articles at our Archives page. You can also subscribe to our blog post below to receive the next post at your Inbox.

    And oh yes!, please encourage by sharing this article through the social buttons on your left/below.

    How Harshad Mehta rigged the Stock market

    Last updated on April 26th, 2017

      Details of Harshad Mehta Scam

    Assuming prevailing FD rates as 9%, imagine you succeeded in convincing your uncle to lend you 1 Crore rupees at rate of 10% per annum. Now, assume you know some source or method from where you can easily make 18% per annum..

    All you have to do is to deploy the amount for one year and earn 18 Lakhs, return 10 Lakhs to your uncle and pocket the rest 8 Lakhs. Your uncle is happy, you are happy, win-win situation, isnt’ it? This is the core essence of Harshad Mehta scam which rocked the Indian Stock Markets during 90’s. Though it was called Stock Market scam, it was the banking system which was exploited and milked..

    In 90’s, it was mandatory for the banks to invest a minimum amount in government bonds.The daily amount could be less than this threshold but weekly average should be maintained above this limit. You can equate this to quarterly minimum balance in our savings bank account of present times.

    The banks whose average was less that the threshold were desperate to bring it up by buying the bonds from another bank whose average is already above the limit. The seller bank usually offered the bonds at slightly higher rates . But all these transaction were not one to one but used to happen through brokers.

      Enter Mr. Broker

    Now this is where Mehta made grand entry to the scene. By this time Mehta was already established himself as top broker and had won trust of top bankers (as you are to your uncle!).

    Now Mehta would approach buyer bank on Monday and promise to get them the bonds by Tuesday on condition that the bank issues the cheque in his name instead of seller bank. And then he goes to seller bank and request for immediate release of bonds but promise them to pay slightly higher amount by Friday which they readily agreed.  (like 1% extra that you paid to your uncle!)

    Harshad mehta scam -Courtesy Slideshare.net

    Harshad mehta scam -Courtesy Slideshare.net

    He handled multiple transactions like this and rotated them so beautifully that he always had some money with him all the time. Then he used this money to manipulate the value of many shares like ACC, Sterile, Videocon and so on and made huge money out of this after settling the due amount to the buyer bank. He took the price of ACC from 200 to 9000.Thats an increase of 4400% .The market went up like crazy and the bulls were on a rampage. Everyone from industrialist to road side tea vendor were discussing stocks at that time..

    You can imagine the magnitude of the scam and the level to which Sensex spiked from the chart below. 

    Harshad Mehta Scam sensex behaviour

    Image Courtesy: tflguide.com

    .

      Harshad Mehta lifestyle

    Mehta lived flashy lifestyle, bought sea facing penthouse at worli spanning 15,000 sq feet with golf patch and swimming pool, lifestyle enjoyed by very few during those times.

    He also owned fleet of cars including his favorite Toyota Lexus, a Toyota Corolla, a Toyota Corsa, a Toyota Starlet, a Toyota Sera, a blue Toyota, two Honda Accords, a Mazda Miata, two Maruti 1000s and a Maruti van..

    Harshad Mehta lexus cars

    Harshad Mehta with Lexus

      Beginning of the End

    It went on for long, but on April 23, 1992, journalist Sucheta Dalal in a column in The Times of India, exposed the dubious ways of Harshad Mehta. This is when banks woke up to the bitter truth and realized that they were taken for a ride and there is no real money and everything was created out of thin air. The stock market collapsed. Lakhs of innocent investors went bankrupt.

    It is said that the chairman of Vijaya Bank committed suicide by jumping from the top of bank’s office since he had illegally issued the cheques in the name of Mehta. Ms.Sucheta Dalal was later awarded padmashri for exposing the scam.

    Harshad Mehta was arrested on 9th November 1992 and was under criminal custody at Thane prison until his death on 31st December 2001.

      How Harshad Mehta Scam impacted future of Indian Markets?

    Harshad Mehta scam has done many good things to Indian stock markets in the later years. As a knee jerk reaction government established Security Exchange Board of India (SEBI) to regulate the stock exchanges. NSE was setup which introduced much needed transparency to the system.

    *Read: What is a demat Account? and How to open it?

      Sharing is definitely caring!

    Today everything is at a click of mouse. Interaction of the traders is very minimal with brokers. But what intrigues us is that how a single man cleverly exploited the loopholes in banking systems. It is counted in one of the top intelligent fraud of independent India.

    Also Read: Ten Popular and Leading Share Brokerage Companies of India

    What do you feel about this saga of first Big Bull of Indian stock markets popularly known as “Harshad Mehta scam” who planted the seed of equity cult in the hearts of millions of Indian middle class? Please let us know via comments. Hope you liked this post, you can find more such interesting and informative articles at our Archives page. You can also subscribe to our blog post below to receive the next post at your Inbox.

    And oh yes!, please encourage by sharing this article through the social buttons on your left/below.

    Unicon Securities Complaints: What if your broker goes burst!!

    Last updated on January 12th, 2017

    Imagine a scenario in which your broker suddenly become unreachable, all the mails you have sent to their email account bounce back and no one picks up your phone. To your nightmare, your fund withdrawal requests are not honored.  Recently many traders found themselves trapped in this situation and subsequently NSE expelled the broker Unicon Securities. See the circular issued by NSE on 10th September 2014 in all the leading financial newspapers.

    unicon securities expelled

    Being a Trader/Investors, we normally spends tons of hours analyzing different indicators, Chart patterns, balance sheets and what not.  We never bother to check the financial health of our brokers until it is too late. But it is always better to be safe than sorry.

    In this post, we will explain how you can be alert and what action you can take if you find yourself in this situation (if god forbids).

    It pays to understand and be alert about your Broker

    First thing you should be doing is periodically visit NSE website and find out complaints registered against your broker. You can check the latest status of the complaints from here at Arbitration Status page

    There are various categories of complaints classified by NSE and we captured broad categories in below table

    Sl no Type of Complaint Description
    1 I Non receipt/delay in payment
    2 II Non-receipt / delay in securities
    3 III Non-receipt of documents
    4 IV Unauthorized trades / misappropriation
    5 V Service related
    6 VI Closing out / squaring up
    7 VII Non implementation of arbitration award
    8 VIII IPO related
    9 IX Others

    Though you should be worried about all the categories, in our opinion first four are the ones which we would never expect to see from my broker. More the number of Type I and II complaints, more alert you should be.

    Unicon complaints screenshot

    See the number of Type I and II complaints that were lodged against Unicon Securities, this would have been enough for an alert customer to sense that all is not well with them..

    How can you claim your balance stuck with your broker?

    You got busy with the trading, lazy enough to do above steps which we explained and one fine day you came to know that your broker has gone bust. What can be done now?

    NSE protects investors interest through the Investor protection fund (IPF). But the maximum which you can claim is limited to Rs15Lakhs.

    Lodge a formal claim at NSE using the claim form which can be downloaded from NSE website. we have attached the format for your quick reference here at NSE Claim Form.

    Lessons to be learnt from Unicon Securities episode

    • Exercise due diligence while selecting your broker
    • Download and keep backup of all your contract notes, margin statements, ledger statements (You don’t know when your broker stops access to their website)
    • Get alert if you don’t receive contract notes within one working day from the execution of trade through email
    • You should always maintain the document in their original, we mean, screenshot does not qualify as proof
    • Don’t place all your eggs in a single basket, consider using different brokers and don’t keep more than 15lakhs if you can not afford to loose.

    If you carefully read the notice from the NSE, you are expected to claim your balance within the three months from the date of notification. Beyond it, no one can help you out. So it is entirely your responsibility to keep a tab on news related to your broker. Your relationship with the broker should not end when you sign on the dotted lines, it should begin from there

    Also Read :  Ten Best Online Share Trading Broking firms of India

    If you have any suggestions on how we can protect ourselves as investors, please share them with the rest of the readers through comments.

    And Yeah!, if you find this post helpful, consider sharing it through the social buttons below. Someone may find it useful for them.

      

      
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