How Execution Range Effects your Option Trading ?

How Execution Range Effects your Option Trading ?

  Traders, Today we will discuss Execution Range and its effect on your option trading. Currently, option trading has been contributing up to 80% of total exchange volume in NSE. But the liquidity is limited to present month contracts. With low trading activity in most contracts, there is a higher probability of higher impact cost. Impact cost is the difference between ordered price and executed price. To save traders from higher impact cost, the exchange has prescribed execution range for option contracts. Now let us see how it protects the interest of traders. But first the definition,Execution range is the price range on both sides of the current price of a contract. It refers to a range in which you can place orders for the various option contracts. Order placed beyond this range will be rejected. Price for each contract shall be calculated as follows, At market open – Option price derived from the underlying price. During market hours – 1 minute simple average of trade prices. According to NSE the execution range on both sides of price would be:            Now let’s explain it with a simple example, Consider the price of a deep ITM (in the money) Nifty option is 100. Now check the below Order Window. We know from the previous table, execution range for this option would be from 80 to 120. (20% of both sides) Anything beyond this range will not be accepted by the exchange. Now if we put a buy market order of 20 lots @ 100, then only 12 lots will get executed at 105 and 112...
What is NIFTY? How is it calculated? 

What is NIFTY? How is it calculated? 

Nifty, derived from the combination of two words “National” and “Fifty”, is a major stock index introduced by the National Stock Exchange of India. It comprises 50 stocks that are actively traded on the National Stock Exchange or the NSE. These stocks belong to various sectors. Nifty is calculated by using the “Free-float Market Capitalization” methodology. You can get their current values from the Index Bar of your NEST Trading Platform Understanding Free-Float Market Capitalization Free float shares are those shares of a company that are traded in the open market. Not all shares issued by the company are free float. Those that are held by the government or the management or promoters of the company or by foreign direct investors are not actively traded in the market. Only those that are traded in the market are taken into consideration while calculating Nifty. The classes of shareholding that are generally omitted from the characterization as Free-float are the following: Shares that are held by founders, directors, acquirers, etc. which contains an element of control over the business entity Shares that are held by individuals or groups or organisations having “Controlling Interest” Shares that are held by the Government playing the role of promoter or acquirer Equity held by the foreign investors through the FDI Route Strategic shareholding by private corporate bodies and/ or individuals Cross-holding or equity or shares that are held by associates and group companies Shares held by Employee Welfare Trusts Locked-in shares and shares which would not normally be sold in the open market Nifty Calculation The Nifty is a market capitalization weighted index based on...
Taxation Simplified for Traders

Taxation Simplified for Traders

Taxation Simplified for Traders: It’s Time To File Your Tax Return Taxation in leu of gains from trading or investing in shares is somewhat complex. SAS Online has made an attempt to simplify it for the taxpayers. Before you can figure out how much to shell off as the tax you must first decide whether you are a trader or an investor. Trader or Investor If you buy stocks with an intention to earn from dividends then you are an investor. A trader buys stocks to profit from price rises. Long-Term &Short-Term Gain If a listed security is held for less than 12 months and then sold, the consequent gain/loss is considered to be short-term capital gain/loss. If the holding period is above 12 months, long-term capital gain/loss arises. Speculative and Business Income Intra-day trading or same day buying and selling of any share is interpreted as speculation income.It involves no actual deliveries of stocks. Trader can gain or lose. Loss can only be offset against speculative gains. Income from trading F&O(futures and options), intraday as also overnight, on all the exchanges is considered as non-speculative business income. How to Calculate Turnover Turnover refers to the profits and losses that are incurred after the settlement of the trading account. In a financial year, if your turnover is over Rs.1 crore, then your books of accounts mandatorily have to be audited  Audit Requirements An audit is mandatory if you have business income and the yearly business turnover crosses Rs. 1 crore. For digital transactions, this limit is Rs 2 crores. All equity transactions are digital. For equity traders, an audit is mandatory(sec...
SAS Online launches new android app for trading – Alpha Mobile

SAS Online launches new android app for trading – Alpha Mobile

Trading online with SAS Online has become easier than ever. With feedback from all our clients we have launched a New Android app for your convenience.  The app called ‘Alpha’ is an amazing online trading option on mobile that provides all the necessarily options for traders to trade on the go SAS Online is always focused on client’s satisfaction and hassle free trading. With over 20,000 happily satisfied clients across 750 cities of India, SAS has crossed 7000 Cr daily turnover and doing 60,000 orders a day. The ‘Alpha’ app is now available on Google Play Store and can be searched using “Alpha – SAS Online’‘. Initially , it will be available only for Android users followed by a version for iPhone DEMO LINK DOWNLOAD LINK Some special features of Alpha:- Light, Fast and Intuitive Get higher Intra-day leverage via cover orders and bracket orders Facility to place After market orders Get notifications for order execution and price alerts Position Conversion and square-off options Pay-in funds to your SAS account via the app You can trade in all segments: NSE Cash, BSE Cash, NSE FO, NSE CDS and MCX. Real-time charts with multi time frame conversion, technical indicators, drawing tools If you have any suggestion or complaint, Please right below in the comment box, We will get back to you soon....
Share buybacks: Should you participate in them?

Share buybacks: Should you participate in them?

Strap: The answer depends on a variety of factors such as the buyback mechanism adopted, the premium offered, and the acceptance ratio When companies reach the mature stage of their life cycle, they turn into what the BCG (Boston Consulting Group) Matrix refers to as a “cash cow”. These companies are profitable. The growth stage of their life cycle is behind them, so they don’t require the cash to make fresh investments, and hence are able to generate regular free cash flows.At this stage, companies can do one of three things: distribute dividend to investors; buyback shares from the markets; or use the money to fuel inorganic growth. Many IT companies in India have in recent times opted for the Share buybacks route. Share Buybacks is one way through which a company tries to reward its shareholders. When a company buys back shares from the market, its total number of outstanding shares reduces. For the same level of earnings, if the number of outstanding shares has declined, the company will enjoy a high earnings per share (EPS). A higher EPS will in turn translate in a higher price for the stock even if its valuation (PE) remains unchanged. Sometimes,buybacks signal that the management thinks that the stock’s price is lower than its intrinsic value. The share buybacks is one way through which the management tries to improve shareholder value. One negative of buybacks is that it signals that the company doesn’t see business opportunities for deploying its surplus cash, as is indeed the case with IT companies, owing to the ongoing slump in the sector’s prospects.   Buybacks have also...