FAQ

SKW means as Sumit Kumar Waghmare on which name SEBI has granted an investment adviser  license. SKW is the short form of his name. 

The timings for equity market is morning 9 am to 3.30 pm.

Market opens at 9am called as pre-open till 9.07am. Thereafter, normal market resumes from 9.15am to 3.30pm.

Agricultural Commodities: 10am to 5pm

Bullion/Metals/Crude oil and internationally linked Agri commodities: 10am to 11.30pm

Derivatives are financial instruments that derive their value from the underlying asset. The most commonly used derivative instruments traded in India are: Futures and Options.

Security market is a place where financial securities are traded (Bought and sold).

The different types of security market are:

Debt Market- Corporate Money Market, Government securities & Corporate Debt market.

Equity Market- Primary Market & Secondary Market

Derivative Market- Futures & Options Market.

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Beta is a method of measuring systematic risk of an asset. It shows the sensitivity of how price of a security responds to changes in its underlying index. Beta is a way of measuring systematic risk of any asset. It shows how price of a security responds to changes in its respective index price. It indicates the extent of movement or price of a stock with respect to the movement of index in market. Assets that are riskier than average will have Beta greater than 1 and assets that are safer than average will have Beta lower than 1. Risk-free assets will have a Beta value of 0.

Bullish view on the market indicates that the traders & investors are expecting the market to rise in the near, short or long term. Positions are usually taken depending on the view a trader has on the market.

Bearish view on the market indicates that the traders & investors are expecting the market to fall in the near, short or long term. Positions are usually taken depending on the view a trader has on the market. initiatives.

This process is called short-selling. Investors and traders are allowed to sell shares in the cash market only on intra-day basis, i.e., short sellers cannot hold positions for the next day and will have to square off their short positions on the same day of execution.

The derivatives market allows you to sell futures of a particular security on intraday as well as positional basis. Position in futures requires a certain amount of margin that is to be paid to the exchange in order to buy or sell futures.

The macroeconomic factors that influence the stock market are:

Investment objectives and constraints
Asset mix
Designing of portfolio strategy
Selecting securities
Execution
Revision of portfolio
Evaluation.

The different types of market participants are:

Hedgers
Speculators
Arbitrageurs
Retail market participants

Stock market index refers to a group of stocks selected on a certain criteria (Market Cap, Volumes, etc). It represents the general movement of the stock market.

The major stock market indices are:

NSE Nifty 50
BSE Sensex
Bank Nifty

There are mainly 2 major exchanges in India. They are:

National Stock Exchange (NSE)

Bombay Stock Exchange (BSE)

Hedging is the strategy where the position can be protected from a potential loss by taking a position in the opposite direction of the original view. It is one of the most effective strategy used by traders these days.

Speculation is the process where traders or investors bet on huge market movements to earn profits. It is a risky process of trading as there is no strategy involved.

Long position involves buying of futures contract or buying in the cash market or buying options. Short position involves selling the same (including short-selling).

A trader buys a call option when he/she has a bullish view on the stock/index. A call buyer has to pay a certain amount of premium. He/she achieves profit when the index/stock goes up.

A trader buys a put option when he/she has a bearish view on the stock/index. A put buyer also has to pay a certain amount of premium. He/she achieves profit when the index/stock goes down.

The currency combinations traded in the Indian Foreign exchange market are:

USD/INR
GBP/INR
EUR/INR
JPY/INR

The segments and products are:

Bullion (Gold & Silver)
Base Metals (Zinc, Aluminium, Lead, Copper & Nickel)
Energy (Crude Oil & Natural Gas)
Agricultural Commodities (Black pepper, Cardamom, Castor seed, Cotton, Crude palm oil, Mentha oil, RBD Palmolein & Rubber)

Currently there are 16 industries in Nifty 50: Banking/Finance, Technology, Oil & Gas, Automotive, Metals & Mining, Consumer Non-durable, Tobacco, Engineering, Utilities, Pharmaceuticals, Telecom, Chemicals, Cement/construction, Conglomerate, Media and Miscellaneous.

The major participants in Indian Financial market are Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs).

National Stock Exchange (NSE) was established in the year 1992 as the first electronic demutualized exchange in the country. It was the first electronic screen-based traded exchange in the country.

The closing price of Nifty 50 is calculated by taking the Weighted Average Price of its constituents during the last half an hour.

The weights of stocks in the index changes when there are changes in the market capitalization, rights issues, public issues and Mergers & Acquisitions. Due to these events, the portfolio is set to change which directly changes the weight it carries.

The historical data of Indices and stocks can be found in the website of the respective exchanges under the head ‘Indices’ and respective historical data.

BTST refers to ‘Buy Today Sell Tomorrow’ which means that in a BTST recommendation, a trader can buy a position on a particular day and square it off (sell) the next trading day.

STBT refers to ‘Sell Today Buy Tomorrow’ which means that in a STBT recommendation, a trader can sell a position in futures or options on a particular day and square it off (buy) the next trading day.

Forwards are private contracts between two parties who have decided to buy/sell a particular asset at a pre-decided period of time whereas futures are agreements between parties to buy/sell the underlying financial asset at a specified time and date.

Forwards are private and tailor-made contracts whereas, futures are standardized and regulated contracts. .

Forward contracts are traded over-the-counter whereas, future contracts are traded on an exchange.

A calendar spread is created with the following positions:

Long futures in one expiry month.
Short futures in another month of the same calendar year.
Example: Long January futures & Short February futures or short January futures & long February futures.

Some of the most important option strategies are:

Bull call spread
Bear put spread
Call ratio back spread
Bear call ladder
Bear call spread
Bull put spread
Straddle
Strangle
Long/short butterfly

Long straddle: Buy one at-the-money call and one at-the-money put option.

Short straddle: Sell one at-the money call and one at-the money put option.

Covered call is one of the most used option strategies by traders. In this strategy, the investor already holds long position in an underlying and sells call options of the same underlying in order to protect themselves from volatility in their long holdings. A covered call strategy is called a ‘buy-write’ strategy.

Married Put strategy is similar to a covered call strategy except one thing; here instead of selling call option the investor buys a put option. He is long on the underlying asset. The concept is similar to buying insurance where the buyer pays a premium to buy protection (long put).

An arbitrage strategy is usually created with the following positions:

Long at-the-money call
Short at-the-money put
Short futures

The financial intermediaries between two parties in a transaction are:

Stock Broker
Depository and depository participants (NSDL & CDSL)
Banks
NSCCL (National Security Clearing Corporation Limited) and ICCL (Indian Clearing Corporation Limited) are clearing corporations of NSE and BSE respectively.

Bid price is the price quoted by the buyer whereas, Ask price is the price quoted by the seller.

Order book is a register which tracks all the orders that have been sent to the exchange.

Trade book is a register which shows all the orders that have been transacted throughout the day.

HOW CAN WE
HELP YOU?

Contact us at the Consulting WP office nearest to you or submit a business inquiry online.