Day Trading Stocks & Futures

[Dr. Jan Itor]

After a long dull streak, got MTAR in 1/2 Appl
have learnt to rejoice with a tiny RII quota holding.

 

[man.i]

for Anupam I read promoter did pref allotment at 200 rs 4 month back...

200 to 550 valuation change in just months ?
Anyways do not intend to hold for long term even if I get allotment. SRF/PI seem to be better long term options.

 

[cinderblock]

ATH again today..

 

[vikas2131]

ATH again today..

Gap up, make high of day in first 15 mins and then go no where for whole day.

 

[john302928]

The borrower is borrowing the stock to sell. After he sells, he receives 100% of CMP.

Net, he is paying 25% margin to be short in cash market plus charges.

oh ok. Thanks. Then how is our money safe? I thought our stock worth is safe because they are bringing in 125% margin. so there is a chance intermediary could pay us back from this 125% margin incase the borrower defaults.
Sir, In the same snapshot it says To borrow stock, he has to bring in 125% margin. but from your point it shows after borrowing it becomes 125%.so its not safe for the lender. Something is contradicting. They are saying lender feels secure since borrower brings in 125%.

 

[john302928]

--

 

[vikas2131]

Are we seeing distribution in the market , i just wonder.

 

[cinderblock]

oh ok. Thanks. Then how is our money safe? I thought our stock worth is safe because they are bringing in 125% margin. so there is a chance intermediary could pay us back from this 125% margin incase the borrower defaults.
Sir, In the same snapshot it says To borrow stock, he has to bring in 125% margin. but from your point it shows after borrowing it becomes 125%.so its not safe for the lender. Something is contradicting. They are saying lender feels secure since borrower brings in 125%.

View attachment 45675

In the example, Borrower has to pay 5 lakhs upfront to the intermediary. The amount remains with the intermediary till the borrower returns the stock.

 

[cinderblock]

Gap up, make high of day in first 15 mins and then go no where for whole day.

SGX traders seem quite happy to pump up the market and do their own thing when Nifty is closed

 

[john302928]

In the example, Borrower has to pay 5 lakhs upfront to the intermediary. The amount remains with the intermediary till the borrower returns the stock.

If he has to bring in 5lk upfront payment, then instead of borrowing he could directly buy the stock for 4lk. is it not? could you please give me an example on how the borrower benefits from the deal that would help me understand it. thanks
Is it like, borrower pays an upfront margin of 125% (5lk), and gets the stock worth of 4lk from the lender, once he the deal is done, now the borrower has 225% worth (cash+stock). now borrower hedges his position with futures where futures requires 4lk margin. since he has 225% worth value, he could create opposite position in futures with 100% value from 225%. so ideally he is able to create the hedging with just 25% and the lender's money is safeguarded with the remaining 100%. Is my understanding correct? Just for hedging benefit this SLB is used?
If borrower benefits in some other manner other than above, please help me understand. thanks