Complete rookie questions

[Giraffe]

Tata steel lot size = 764. ( does this mean we get rs 764 on every point we profit/loss) that's to much if you compare it with nifty futures only rs 50 -.-

764 x 274.25 = 2,09,527. so considering you only need 10% of this which is rs 20952 in the account for intra day trading ? therefore if 1 lot gives 764 on each point you would only require a loss of 27 points to bankrupt your account?

Yup, now you are getting it.
I would suggest you first foray in Cash segments. Don't use leverage, No single position with size more than 25% or 33% of your account. Do this for few months. Stay away from FNO segment, unless your pockets are so deep that a hit of few lacs don't matter much.

 

[Giraffe]

so if i intra day trade nifty/stata steel options or futures it is the same ?no difference except for leverage how much leverage does options have? and also for intra day trading we only need 10% at most for trading . Indian markets are leveraged only upto 10 times ?

Leverage in options is a very tricky topic.
Per se, it may appear that you are buying Rs. 20 options (nifty) with lot size of 50, and thus 1000 rs only. But this position is inherently leveraged.

Leverage will depend upon the price of options and concordance of the price movement of nifty options with spot nifty (which again would be mainly depend upon the first thing). If nifty moves, 10 points, and your option moves 10 rs, they are equivalent. Say option is priced at 180 rs, so with 9000 rs you are controling a nifty lot worth Rs 275000, therefor, the leverage will come out to be 30x almost. Different priced options will have different concordant price movements , 60-80 rs options will usually move in 1:3 ration, 10 point nifty move will result in Rs. 3 price change approx.

Advantage of option vs futures is that they are much cheaper to trade, esp. when you increase the lot numbers. Check out zerodha's bkg calculator, and see the difference in net cost to trade to trade 10 lots of each.

 

[Piratetrader]

Yup, now you are getting it.
I would suggest you first foray in Cash segments. Don't use leverage, No single position with size more than 25% or 33% of your account. Do this for few months. Stay away from FNO segment, unless your pockets are so deep that a hit of few lacs don't matter much.

now giraffe bhai what are cash segments i have no idea? the thing is I have been trading international forex pairs for the past 3 years before I recently gave up due to rbi restrictions I lost 46k in total and i don't have the stomach to loose in lakhs as i am still in school but now i have a pretty good idea about it because the fx is the highest leveraged market in the world. I used to trade with x100 leverage. I am fully aware that its a double edged sword. where do i think i should start learning about futures intra day trading ?

 

[Giraffe]

now giraffe bhai what are cash segments i have no idea? the thing is I have been trading international forex pairs for the past 3 years before I recently gave up due to rbi restrictions I lost 46k in total and i don't have the stomach to loose in lakhs as i am still in school but now i have a pretty good idea about it because the fx is the highest leveraged market in the world. I used to trade with x100 leverage. I am fully aware that its a double edged sword. where do i think i should start learning about futures intra day trading ?

Cash Segment is Equities segment : Where you will trade stocks.
FNO or NFO : Future n Options or NSE Future Options : Where you trade futures and options.

Cash Segment: Atlas Bicycle
FNO : Bajaj Pulsar 220 Dts-Fi...

Sure Pulsar is more fun, but no prize for guessing where should one start to learn.......:rofl::rofl:

 

[Giraffe]

Aur piratebhai, ab to Nirma wali ko badal kar Ghadi wali kardo, kyon bechari Nirma wali ko faltoo mein badnaam kartey ho........:rofl::rofl:

 

[Piratetrader]

Cash Segment is Equities segment : Where you will trade stocks.
FNO or NFO : Future n Options or NSE Future Options : Where you trade futures and options.

Cash Segment: Atlas Bicycle
FNO : Bajaj Pulsar 220 Dts-Fi...

Sure Pulsar is more fun, but no prize for guessing where should one start to learn.......:rofl::rofl:

arre bhai tab jo tata steel toh stock hai is it offered in futures ? or cash segment ? kya confusing hai baap re baap!

 

[Piratetrader]

Aur piratebhai, ab to Nirma wali ko badal kar Ghadi wali kardo, kyon bechari Nirma wali ko faltoo mein badnaam kartey ho........:rofl::rofl:

lol http://www.youtube.com/watch?v=6s4hOEQdma8

 

[Giraffe]

arre bhai tab jo tata steel toh stock hai is it offered in futures ? or cash segment ? kya confusing hai baap re baap!

1. You can buy Gold ......real shining Gold : Go to the market, pay the price to the jeweller, get 100 g of glittering gold.

2. You can buy Gold Futures: Go to the same shopkeeper, pay him the price of gold (+ premium, if any) and say that you will come and collect your gold next month.

3. You can buy Gold Options: Go to the shopkeeper, say that you will pay him 500 Rs for a coupon that will allow you to come and buy gold anytime in next 60 days at the price of Rs. 32,000 per 10 g irrespective of the prevailing rate at that time. The coupon will expire after 60 days.

If the price of Gold moves, you can even sell your Gold Futures/ Option coupons to your friend for a price higher than what you brought for.

Same Gold, being traded in all the ways.
Similarly with Tata Steel, Infosys, SBI, etc. etc. Same entity, you can bet in multiple ways.

 

[Piratetrader]

thanks you very much giraffebhai.

1. You can buy Gold ......real shining Gold : Go to the market, pay the price to the jeweller, get 100 g of glittering gold.

2. You can buy Gold Futures: Go to the same shopkeeper, pay him the price of gold (+ premium, if any) and say that you will come and collect your gold next month.

3. You can buy Gold Options: Go to the shopkeeper, say that you will pay him 500 Rs for a coupon that will allow you to come and buy gold anytime in next 60 days at the price of Rs. 32,000 per 10 g irrespective of the prevailing rate at that time. The coupon will expire after 60 days.

If the price of Gold moves, you can even sell your Gold Futures/ Option coupons to your friend for a price higher than what you brought for.

Same Gold, being traded in all the ways.
Similarly with Tata Steel, Infosys, SBI, etc. etc. Same entity, you can bet in multiple ways.

 

[Mr.G]

thanks you very much giraffebhai.

Im a fundamental fund manager so Il give you my tip aswell. If you are ever interested in long term investing.

Il use giraffe's example.

If you know that 10G gold is worth 32K and some idiots are selling it for 28K.

You know that gold they are selling is undervalued, so you buy it from them and sell them the gold back when they realize that the gold was actually worth 32K.

Companies are also sometimes selling at undervalued rates due to market crash or temporary bad news or events. These give opportunities to buy and make profit.