What is Options Trading?

What you want from trading is the main thinking that you should know before taking any investment. The option derivatives are the special kind of stocks. We can understand by this example: When you make a plan to purchase a property, then you have to submit deposit money for the property, it is some part of the calculated amount of the price of the property. This process is the same as the process of the purchasing stock option. The options contract is the special contract that provides the right of purchasing stock on definite value with before the definite time. Some of the traders feel it is a good investment process. Every trader should know about Share Market Basics.

In options trading, you can trade and make profits on the stock price without giving the whole amount of the stocks. It provides sufficient control on stocks on the minimum amount as compare to stock price. The option is very naturally risky investment process, it is right to do of experienced investors, they are always ready to market ups or downs, option uses for making profits and decreases loss.

There are two kinds of options

1. Call Option
2. Put Option

In contrast, put options provide the right to sell the underlying shares to the holder at the strike price on or before the expiration date. The value of the put option increases when the value of the underlying means is low. The put option is one where a person can ensure a stock for later fall. If your stock price is low, then you can take your put option and sell it at a set price level earlier. If the stock price goes up, then you are simply the loss of the premium amount paid. Before investing in the stock market, you should Learn Stock Market.

Case 1:

Rajesh buys 1 lot of Infosys Technologies May 3000 Put and gives 250 premia, this contract allows Rajesh to buy 100 shares of 3000 rupees from the current date till the end of May. To avail this, Rajesh has to pay a premium of Rs. 25000 only (250 rupees for a stock of 100 shares).

Buyer has bought the right to sell. Put's owner has the right to sell.

Case 2:

If you think that a particular stock such as "Ray Technologies" has a higher value in the month of February, and values in the future may improve. However, you do not want to take any risk in the price increase. Then you will have to take a put option on the best option stock.

Let's say the prices for the stock are under:

Spot Rs 1040

May Put on 1050 rupees 10

May Put on 1070 rupees 30

Important Of Technical Analysis

Looking at the benefits of SHARE MARKET, it is quite appropriate to attract our side with Share Market Basics,

Because everybody wants to earn a maximum profit by investing their savings money, but IGNORE cannot be done at all that SHARE MARKET is full of risks,

The biggest truth of the stock market is that - everybody here only enters to earn profit from the stock market, but only 10% people make money right from the stock market, and the rest 90% LOSS would be the people are,

And here 90% of the people are LOSS because they do not know that -

When bought shares,

In which price of shares

How much buyers buy

When to sell shares

In which price did the shares be sold

How much are the shares sold

And how to control your LOSS

To find out all these information, we need to understand Technical Analysis,

Stock Market RISK and RISK Pay Control

However, there are only two things in the entire stock market, buy  and sell the shares, this is the most fun part now, and the second truth in this market and the greatest unique thing is that nobody recognizes accurately whether anyone When to buy shares, and when to sell, this is also a risk part, so you should Learn Stock Market smartly

The risk in the market is of the fact that, nobody knows exactly when a buyer bought, how much to buy at a price, and when to sell and sold at many prices,

The whole risk is this,

Because no one here can always be 100% correct, and there is no one way that we can say that we have educated in stock market.

Measures to control the stock market risk -

We have seen that there are two lower stock markets - buying shares and selling shares,

The most important points are

Buying Share – When will the Shares Buy? How much to buy? How much did the stock buy?

Selling Stocks - When to Sell Stocks? How much did the stock sell in? How much did the stock sell?

At the same time, in the case of LOSS, how to protect the capital?

By keeping information about it and implementing it, risks in the stock market can be controlled, and with the help of protecting your capital, it can be expected to earn the right amount,

As we have already explored, no human can always say exactly how to buy a stock, how much to buy, how much to sell, and when and how much to sell,

But there are some measures by which we, about this, about the shares, when we should sell, at what price, and how much of the shares should be sold, we have a well POINT OF OBSERVATION about this, By controlling risks, lowering LOSS, profit can be increased,

And the names of these measures are - FUNDAMENTAL ANALYSIS AND TECHNICAL ANALYSIS

Let's talk now -

About TECHNICAL ANALYSIS

When we analyze at the company’s stock only on the basis of when its price rises and when it is concentrated, and it is not highlighted that the aptitude of the company to create its profit is so solid, i.e. When the earlier performance of the stock is kept in mind only then, we buy or sell BUYING or SELLING on the basis of TECHNICAL ANALYSIS,

And in this way, we can say that, on the basis of FUNDAMENTAL ANALYSIS and TECHNICAL ANALYSIS, you can well tell an estimate of the FUTURE PERFORMANCE of a stock,

In this context TECHNICAL ANALYSIS tells us about the cost of buying shares, the time of purchase, how much to buy and when, how much to sell, how many sales, stop loss, etc.,

And that's why a large INVESTOR also explains the changes and shares deals in the market with the help of FUNDAMENTAL ANALYSIS and TECHNICAL ANALYSIS that when should buy and sell so that we can earn more profits,

What is the stop loss?

Stop loss is the opinion or value at which the stock traders sell their stocks and evades the subsequent losses. In other words, the stop loss of a stock is the price after which there is no loss to you and at which point you decide the extent of possible losses in relation to a stock, which reduces your loss.

How does work

Not only at the time of decline, but it also are works even when stock prices increasing. For example, tell your broker about the same stock you bought at a price of 100 rupees, that if the stock reaches Rs 115, then it will be sold.

Why is it used?

Stop loss is used so that the damage in heavy upheaval can be avoided. Stock market emotions are strongly affected. In such a way, the more benefits it may have, the more damage can occur. Stop loss is the way to reduce this loss. Also, one advantage of this is that if you are not trading regularly and do not routinely monitor it, it can also be beneficial for you. In such a situation, Stop Loss can save you from many dangers.

It is important for you

Stop loss is very important for a short period, but if someone has to invest for a longer period then there is no significant importance for it. You should be prepared for yourself that there can be a big change in the market at any time.

Basic Stock Market Terms That Used Most

There are two main stock exchanges in India: Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) l Bombay Stock Exchange Dalal Street, Mumbai, Maharashtra, India is an Indian stock exchange. Established in 1875, BSE is Asia's first stock exchange; Bombay Stock Exchange calculates the fluctuations in the market value of 30 large companies. Second Stock Exchange NSE is also in Mumbai and it was established in 1992. For information like Stock Market Basics and the main terms used in the stock market are as follows:

1. Equity Share: Equity shares are those shares which are franchised by the company. These shareholders are owned by the company in proportion to the holdings of the shares, and they do not have any liability in dividend distribution.

2. Preference share: These are share holders, which are preferred in dividend distribution. After dividing dividends, if some dividends remain, then it is divided into equity shareholders. Share holders of preference shares are eligible for company franchise Is not received

3. Initial Public Offer (IPO): It is related to the primary market in which the shares of new companies are issued in the market. Through this method, companies mobilize money from the market and make their further financial plans.

After all, the Indian economy will benefit from plastic notes?

4. False Public Offer: When any new company issues its authorized capital with the primary market, it is called FPO.

5. Blue Chip Company: It is a company whose shares are considered very safe to buy. The investor purchasing shares of this company receives a risk-free benefit.

6. Insider Trading: This means that information is related to the working system of a company, which contains information about the future plans of the company. If this information is notified by the company's superior Directors and high level officials), the prices of that company's shares are unexpectedly up or down.

7. Commercial Paper: This is a promissory note which is issued by a financial institution. The main objective of issuing this is to fulfill the short-term financial needs.

8. Bonus Issue: This type of share bonus is given to those share holders in free of proportion to which they have shares of that company already. Such shares are also called dividend shares.

9. Bull: bullion is called the person who buys shares in the stock market and due to this purchase, the stock market goes upwards. This investor has a positive attitude about the market because he thinks That the price of the shares bought by him will rise up.

10. Bear: The beard is called the investor who sells the shares he bought because he thinks the price of the shares bought by him will fall into the market, so he sells his shares and by many people When this happens the market falls downwards.

11. Dividend: This is part of the profit given by the company to its share holders. This part of the profits divides the shares in the ratio of the number of shares to the shareholders of the company. The more the share, the more it is Get dividend.

12. Hot Money: It is an investment money that grows like a profit. This type of investment is very stable in the money market, which is why it is called Hot Money.

13. Junk Bond: Junk bonds are bonds whose ratings are low, but the rate of return on them is high.

14. Kerb Trading: Outside the stock exchange market building, illegal trading in securities at the same time or after the stock exchange is called curb trading.

15. Stag: Such people who prefer to invest in primary market, not in secondary market, are called stag l. These people take very little risk.

16. Alpha Share: These are also called shares of Group A. These are stocks which do not interfere with the sale of the sale.

17. Right Issue: When the current share holders are given priority in the allotment of shares or securities, such shares are called right issues. Current share holders have to pay rupees to buy these shares ie these Shares are not free of cost like bonus shares.

18. Snow Baling Effect: When the price of shares increases slightly due to share purchase or for some other reason, the value of the stocks increases and so much that if the stop order on the purchase sale starts coming, then Snow baling says

19. Short Selling: When a person or a broker sells more stocks than he has or is able to fulfill from anywhere, this action is absolutely illegal.

The Information about Stock Market for Beginners

How to Start Investment in Stock Market

Investing in the share market is a very important financial step. By doing this, you will be a member of a very small group of trader & investors as according to one calculation, less than 2% of the Indian invests in the stock market. At the same time, stock trading can be a complex business, but you can Learn Stock Market by many difference sources and it can consume many years of reading and studying companies’ reports and companies’ stocks to take a right position where you can make stock investment profits. And so, taking a step on the right ways is an important factor. Here are a few points that you should know before when you start investing in the stock market.

Open a DEMAT & Trading account 

Once you take the plunge to participate in the stock market, here you will be needed to sign a contract with a reliable broker or a sub-broker to perform trades with you or on your behalf. To perform a trade order you can either go to the broker’s office or perform it over the phone app or as defined in the Model Contract. The exchanges system allocate a Unique Order Code Number to each trade transaction, and once an order is performed, an order code printed on the agreement note, which will be taken to the trader by the broker.

Read Book

Books always are pantry of knowledge and information, these are inexpensive resources as compare to other resources like as educational seminar, an online tutorial and DVDs sold on the internet. Here we are showing 5 best books that would raise your Share Market Basics knowledge level about stock investment. These books are
1) How to Read a Balance Sheet
2) Fundamental Analysis for Investors
3)  How to profit from Technical analysis
4) Guide to Indian Stock Market
5)  Indian Stock Market

Read Articles – An Article is a fantastic source for knowledge sharing, numerous articles are available on the internet that provides you with every kind of information, like how to do trade, what is small-cap stocks & large-cap stock, which stock will be more beneficial for you, so if you use the internet on daily basis then you have countless resources of getting knowledge of stock investment. Here we are providing the best website that shares the best article for knowledge of the stock market, investing.in, money control, Investopedia, money- basker and so on.

Forums

Forums can be another resource for getting information in which you can ask the question and give an answer. On the forum, many expert advisor and professionals are available they may help you and answer to your query in own style, where many answers you can get and reply this answer if you have any doubts related to answering.