Dear Leonid
This is fantastic information. Superb. Thank you so much for this.
Please can you tell me where I can learn more about futures and options on NSE/BSE?
Coming to intraday, is it possible for me to say:
1. Open my trading software (say ODIN)
2. Pass an INTRADAY Short on, example, HDFC Bank (say 100 shares)
3. Then, pass another Buy for the same short before closing of the day? (this becomes intraday)
If this is intraday, then I can short in normal equities, correct?
Also, even if I trade intraday, can I use my own lots? Or do I have to move with the pre-fixed lots even in intraday shorting of equities?
Super Thanks again for this wonderful teaching.
Regards
For Intraday trading , the best part is that
you can go both Long or Short on Equities for that particular day.
Intraday trades in equities are
compulsorily squared off by 3:15 pm by the exchange if the client does not close his/her position by then.
The leverage given for Intraday trading is quite good eg. you can get upto 10-15 times leverage.
So like you have 10,000 in your trading account , you can trade Equities worth 1,00,000 or more.
There is no bar on number of shares for intraday trading. You can trade in any number of shares as per your choice be it
1 - 10 - 25 - 100 - 500 & so on ...
An example I like to give to make shorting of shares in intraday trading more clear for you ..
Suppose you see at 9:30 am that HDFC is trading at 1120 . You analyse that the scrip will go down for that day .
You sell short the shares [ 100 shares ] @ 1119 at 9:45 am . Now at 1:30 pm you find that the share has gone down to 1109 .
Your target has been met which you had analysed in the morning.
Now you give the square off [cover buy] order for the same quantity.
So you made a gross profit of 1119 [Short Sell Price] - 1109 [Cover Buy Price] = 10 *100 [number of shares] = Rs. 1,000.
Net profit will be less as brokerage + taxes will be deducted.
Leverage will be like this 1119 * 100 = Rs. 1,11,900 [Transaction amount], now if 10x leverage is being given by the broker then you will need Rs. 11,190 in your trading a/c for this trade.
One thing to add that you can trade in Futures as well for Intraday. It is called MIS trade and the position has to be squared off by 3:15 pm .
Hope things are more clear .
A very detailed information about Futures & Options and many other things is given at a link of NSE website which I am giving .
This is NCFM course of NSE .
Start with Beginners module to get yourself thorough with things about derivatives. PDF files can be downloaded from this link and you can read them at your leisure.
http://www.nseindia.com/education/content/module_ncfm.htm