INVESTMENT TECHNIQUE

I am a layman , i wanna invest in Stock Market;

But Fed up from MaineBolaTha.com (Who post Analysis without Any Rationale/Logics)
 types analysts,

Now m confused How to Select stocks for investment purpose!!
What should i do??

-So here we go
Sharing One more investement Technique based on Piotroski Score Methodology :

What is it??
Basically Piotroski Score is defined set of rules to do value investing or to Find Financial Health of a Company  based on following Factors:
(Each Factor contains few points & each point consist 1 Score)

1:Profitability:
* Positive ROA in the current year (1 Score).
* Positive Operating CF in the C/Y(1 Score ).
* Higher ROA in the C/Y compared to the ROA in the P/Y (1 Score).
* Cash flow from operations are greater than ROA (1 Score )

2:Leverage, Liquidity and Source of Funds:
* Lower ratio of long term debt to equity in the C/Y compared value in the P/Y(1 Score ).
* Higher current ratio in C/Y compared to the P/Y (1 Score ).
* No new shares were issued in the last year (1 Score).

3:Operating Efficiency:
* A higher gross margin compared to the previous year (1 Score).
* A higher asset turnover ratio compared to the previous year (1 Score).

*(Above Data in respect of 3 Factors gathered from Investopedia)


I have analysed the above technique on various stocks month back  & Found that this Technique is very Awesome & Useful and hence added to my list of  Fundamental Analysis tools;

Now Qns is How to use Piotroski Score: -

Ans: U can use above Technique in following manner:
Just Add up the score if ur stock is qualifying the point !!
Stock scoring Score 7 is the Level which decide wether to invest or not !!

Alternatively, Open Screener.in
Use its Filter options<and Analysis part (Very simple)

Now If Score >7  then ucan look up to invest in that Stock/Share.

Few Examples of above Technique are: 
-Vedanta
-Weizman
-Vidhi Speciality
-Vamshi rubber
-Titan Securities Etc.

Disclaimer: This is just one of the tool, to be used prima facie prior investing,
Plz do a in-depth research prior investing !!

Feel free to ask queries on same @ https://twitter.com/princu_23
will come up with more analysis & Techniques again;

Till then;
#Stay_Raw 🤞🏻
#Think_Hatke ✍️

FUNDA OF STT ON OPTIONS TRADING

##WHY STT IS HIGHER ON EXPIRY,WHILE DEALING IN OPTIONS!!

Why should I  pay such higher STT even after getting good profits ?? 

Hi Readers :Hope u r much aware now about options Trading,but after getting news on high STT on option many of u are afraid to trade/invest in options,Dont worry just be active while dealing in options...

Let's understand the mechanism of STT on Options:

Suppose on 13th July u have 10,100 Nifty CE:9 call and u holding it till 27th July i.e till Expiry(Last Thursday of Month) 
& on that Expiry date Spot Nifty(Current Rate of Nifty) reached 10,200 &
getting Markets on new high.

In this situation your CE of 9 will increase and reaches (say) to 27Rs.
Bingo u r in 200% profit!!

i.e (27-9)= 18*75= 666Rs. ...

but as u r in ITM(refer previous post for ITM/OTM meaning) and on Expiry here,

u will be charged STT on ur contract value instead of CE prevailing at time of Selling(If u will not square off this ITM position before closing of market i.e. 3:30 P.M) 
...What What What...Come Again!!!

Relax,lets see CALCULATIONS for further Clarity:

Scenario:1:In case of OTM:(Normal Case)

Option Exercised on time:
 STT will be on CE on Sell Side only i.e

=[CE/PE*Lot size*STT Rate]=[ 27*75*.05% ]= 1Rs. Only (Quite low)

Now come to blunder Scenario
Scenario:2:
i.e In CASE of ITM:

On Expiry day,

 STT (will be on Contract Value) =[(Strike+CE/PE) *Lot size*STT Rate]

= [(10,200+27) * 75*.05% ]= 382.83Rs. (OMG) half of my profit ,m gonna pay in STT...

I know this situation is bullshit,but we can't do anything as its a Government Regulation...

Q:Then what to do to avoid such situation??
Ans:Beware & little Active while dealing in options & keep following Points in mind:

#On expiry Don't get in trap of Cheap Options having very low CE/PE say in paisa's 

(trading below than its theoretical value).As it will lead to Higher STT on Expiry

#If you have bought options and they are Expiring ITM , then Sell It Rather than let them expire on their own.(i.e Square of before 3:30 PM on expiry day)

#If the options are expiring in loss i.e (with 0 value), don’t sell it to just to save penny of STT as there is NO STT when ur Options i.e CE/PE becomes ZERO in value and u r in loss of 100%.

Hope it's clear now how STT on Options Works  !!

Will come up with New Discussions Soon !!

Till den

#Stay_Raw

#Think_Hatke

MIND BOBLING ITM/OTM TERMS IN OPTIONS TRADING

What is ITM/OTM IN OPTIONS TRADING: 

After getting this guy's

 (https://twitter.com/Aftabkhan918?s=09)

Twitter's news many people r in fear dat 

Wether options consist that much taxes in form of STT?? 

Let's understand what is ITM/OTM(in the money/out of the money) 

Case:1:If Nifty is presently at 9891, then 9800 Call is called ITM

 (B'coz if the option expires now, there will be an intrinsic value i.e. 9891 less 9800= 91), means Positive Cash Flow.

Case:2: 10,100 call is called out of the money because it has no intrinsic value.(9891-10,100) i.e -209 means out of cash or negative cash flow.

Similalry, PUTS r just opposite 

10,100 puts is ITM,  and 9800 puts is OTM

And ATM is a position where STRIKE = CMP

Hence it's preferable to square off ITM Position timely,rather let them expire on Expiry day!!

Else STT will be higher !!

Hope query resolved !!

Will come up with New Discussions soon
Till den!!

#Stay_Raw 
#Think_Hatke 

A, B, C OF OPTIONS TRADING

#Now the Most awaited query asked by Many;

What are options? What is CE/PE ?

And How these work? 

(Boss yeh hai kya?)

So here we are,  

With our urge to know The OPTIONS-- 
From 30/40/50% to 10,000% (Unlimited) profit !!

!!Greed the options Greed!!

Everyone is amazed,how this wonder of unlimited profits happens in Trading.

(#Must Read Example below)

Let's come n understand 

Starting from;

Options Meaning: 

Options (namely Calls and Puts) are derivative contracts- that provides us  the Right,but not the obligation to Buy or Sell the underlying Asset (Eg:Nifty Index Option) on or before a particular date.

As compared to other derivative Contracts, say: FUTURES,

OPTIONS are less risky​, as u know the MAXIMUM​ LOSS that could happen to u within this option trade is only upto the Option Premium so paid.

With Options Different set of Strategies/ Combinations are possible. For instance: Straddle, Strangle, Butterfly etc.

Easiest of them are Buy CE or Buy PE .

(CE: denotes Call Buyer Option while PE: denotes Put Buyer Option)

During CE position,  we expect that such underlying Asset (Eg:Nifty Index Contract here) will rise, while in PE we expect them to fall.

Moreover,These Options can be traded in Form of Index or Stock Options. 

Lets take an Example of Today's Trade itself to understand Options further,

12th July 2017: 10,100 NIFTY INDEX/ BUY CE:9Rs./ JULY EXPIRY:

Spot price of NIFTY: 9891; Strike Price=10100; Expiry Date: 27th July;

 Bought Option Premium(CE) Price: 9; Lot Size: 75...

The question that rises here is; Why 10,100 Strike price has been selected ;

Because , As of Now we are expecting the market to be further bullish and Nifty Spot Price to go beyond 10,000-10,100 till July Expiry!!

and hence bought call option of NIFTY of 10,100 Strike.

Now to get in profit, Our CE should rise on or before Expiry,and if so happen we will Square off ( exercise ) the contract

 i.e we will SELL Options,so bought, as the price of CE/PE is higher than my Buying Price.

Now Suppose,

Case:1:

 Nifty Spot Price cross 10,000 due to which our option call of Strike price 10,100  also start rising,

say our CE of 9 Rs. reaches to 27 Rs. on or before Expiry date, 

you'll relish a 200% return here.

But How ??

What to do next ?

How to book Such Profits?

We just need to  just sell the option at price prevailing in market i.e Rs.27, ( similar to the way we sell Shares( equity) of a Company) 

Now the Calculations will be performed like this:

Amount needed to Invest = Option premium price * lot size

= 9 * 75 = 675 Rs.

When you square off ur position,

Profit will be 

= (Sold Option Premium Price - Bought Option Premium Price) * Lot Size

= (27 - 9) * 75

= (18) * 75

= 1350 Rupees, i.e 200% Profit

Case:2:

Vice versa ,if NIFTY SPOT PRICE will fall below Expected levels say, if it go below 9800 then our option premium(CE) of 10,100 Strike will also go down,Max upto 0,in that situation too u will  only suffer loss maximum upto 675 Rs. i.e option premium (CE/PE) paid Earlier}

That's it !!

U too now can trade in Options!! 

#Notes:

Note: 1: Brokerage and taxes are extra and haven't been included in above example,they vary from broker to broker,Contact ur broker for Same.

Note: 2: You can square off the options on or before the expiry date at any point of time.

Note: 3: Lot size varies from Stock to Stock and index to index,Say for Nifty its 75,while for bank nifty its 40,and for stocks its different)

#Disclaimer: Options are highly Risky and involves analysis using many factors/tools, like:OI(Open Interest),Time,Volatility,Beta,Delta,Gama,Theta,Vega,RHO.

Hence,Book ur Profits as per ur Greed & Risk bearing Capacity!!

Hope this little effort would help you in learning Options !!

Will come up with new article soon

Till then;

#Stay_Raw

#Think_Hatke