BTST : What you need to be careful of!

BTST : What you need to be careful of!

Fellow Traders BTST refers to Buy Today and Sell Tomorrow But here is something which you need to be careful of while executing this strategy in trading online. As you all know, Cash Delivery Trades are settled on a T+2 basis in India. This means that if you buy delivery on Monday, then you have to pay the exchange on Wednesday and you will get the corresponding delivery on Wednesday after the payment. Similarly, if you sell delivery on Monday, then you have to pay the shares on Wednesday to the exchange and will get the corresponding payment on Wednesday after you have transferred the shares. You need to be careful of short delivery from the exchange while buying delivery today and selling the same delivery tomorrow. Let’s say that you buy 100 shares of Reliance on Monday and sell those same shares on Tuesday. Theoretically, there is no problem with these trades as your shares will be payed out on Wednesday to you from the exchange and you will have to pay in those shares to the exchange on Thursday. Completely Fine. But practically, if the shares you sell on Monday are NOT payed out from the exchange on Wednesday, that is there is a short delivery from the exchange, then you will not be able to pay in those shares on Thursday (for the selling trade on Tuesday). In that case, your delivery pay in will be short to the exchange (for your selling trade) and the corresponding delivery will be auctioned at whatever price the exchange determines. More often than not, an auction results in a...
The Brokerage Calculator

The Brokerage Calculator

Fellow Traders You can use our comprehensive brokerage calculator to see how you can trade with almost zero brokerage when trading with us. Calculate your cost savings by inputting your trades in NSE Cash, NSE F&O, BSE Cash and Currency F&O and compare against any other discount...
STT Option Trap

STT Option Trap

Fellow Traders In this month, I hope your trading has been good and profitable. As we near the expiry of the February contract, I would like to share with you an option of online trading trap that all traders must avoid during expiry. To keep it simple and short, if you buy an option (either call or put) and let it expire (that is you don’t sell it on the day of expiry and leave an open position) and your trade results in a profit, then you will be charged STT @ 0.125% of the settlement amount. Let me explain with a simple example. (By the way, STT is only levied on sell side for both futures and options) Suppose you were to buy 1 lot NIFTY Call @ 6000 for a premium of Rs. 20. On the day of the expiry, there can be two possibilities:- The option expires out of the money, that is Nifty expires below 6000. Let’s say Nifty expires @ 5950. Then the Call option is worthless and expires at Rs. 0. In this case, no STT is levied, as STT for option worth zero is zero. The option expires in the money, that is Nifty expires above 6000. Let’s say Nifty expires @ 6050. The the Call option is worth Rs. 50 (as per intrinsic value, 6050-6000). In this case, you can do one of two things, either you sell the option for Rs. 50 just before expiry or you let it expire, thinking that anyways you will get the profit of Rs. 1500 ((50-20)x50 (1 lot)). This is where the STT trap...
Market Holidays 2014

Market Holidays 2014

Fellow Traders Trading Market holiday for Equities and Futures & Options for 2014. *Muhurat Trading will be conducted. Timings of Muhurat Trading shall be notified subsequently. The holidays falling on Saturday / Sunday are as follows: Trading holidays for Currency Derivatives for...