How to Calculate Nifty??

Stock market is a growing trading platform where most of the investors are interested to trade. Nifty is used as an index in National Stock exchange of India, now the query arises how to calculate nifty?? Let us have a look how it is calculated. Nifty index is introduced by National Stock Exchange. Nifty is composed of two words “National” & “Fifty” fifty defines 50 national stocks include from various sectors. India is considered to be largest single financial products comprising of offshore & onshore exchange traded funds.

CNX nifty which is used as an index was founded in 1995, owned & managed by Indian index Services & Products (ISL). The CNX nifty also called nifty 50. CNX nifty is a large type cap.

Nifty is calculated as 

1) Base year is 1995 & 1000 as its base value
2) Traded in 50 stocks included from various 24 sectors

Formula of Nifty 

Nifty = (Sum of free flow market cap of 50 stocks)*index value in 1995/Market cap. Value in 1995

Nifty index is an indicator to calculate the value of measuring the existence of company stock price. While trading it can be heard that sensex has increase by 100 points or Nifty has gone up by 50 points what does it mean?? it describes that an average of 30 shares in BSE & 50 shares in NSE have performed well.
As Sensex & nifty both use as an index to measure the strength of stock market exchanges but with quite differences:

1) Nifty is the index of National Stock exchange whereas Sensex is the index of Bombay stock exchange.
2) NSE uses the base of 50 major shares which represent 24 different shares on the other side BSE      represents 330 major shares of different sectors.
3) Nifty is the indicator of major share in NSE & sensex is the indicator of shares in BSE
4) NSE is located in New Delhi whereas BSE is located in Mumbai.

There are many other indexes are used to gauge the performance of various stocks such as BSE IT & BSE Bankex.

So in this way nifty is calculated to measure the stock price. You can contact us to get more detail or visit us on: http://www.capitalstroke.com/bullion-tips.php Contact here: 9770670009, 0731-3299704

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Risks Involved in the Commodity market

Commodity market is the fastest growing market over the worldwide. Lot of option & opportunities are there to invest in agricultural products, minerals and metals As commodity market leads to huge profit return but it involves a lot of risk, so certain strategy has to be adopted to minimize the risk in order to maintain your profit return. Uncertainties in future market may also led to commodity risk. So lets us have looked over some common type of risk involved in commodity market.

1. Price Risk - Price risk occur due to the adverse movement in world prices and exchange rates.

2. Cost Risk - Input price risk

3. Political Risk

Participants that affected by the risk

1.Producers – Farmers, plantation companies & mining companies face price & cost risk based on the input produced.

2. Buyers – Commercial traders and cooperatives face price risk between the times up to which the country is buying or selling.

3. Exporter – Exporters also face the price risk between the purchasing & selling at the port to the destination market.

4. Government – Government face both price and quantity risk with the regard of tax revenue generally this occur due to the rise of commodity prices.

Apart from these risks there are certain more factors which affect the commodity market. The uneven weather changes may affect the productivity which in turn affects the rise in price. Political instability is another factor of rising of commodity price, fluctatution in exchange rate may also leads to huge loss for investors.

So to minimize such type of risk various options are there to minimize such risk among them stop loss and stop-limit order is most popular.

If you want to get trading tips in commodity market & want to know more about our services visit us: http://www.capitalstroke.com or Contact us: 9770670009, 0731-3299704

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Nifty Future Trading Strategy

Nifty a great platform for traders in Indian stock market. Nifty is basically a collection of 50 stocks that make up an index value which is termed as S&P CNX nifty. Nifty index may reflect 23 sectors of the economy.

As nifty cover 60% of the total market capitalization and the no of 50 companies which is listed in National Stock Exchange (NSE) who uses nifty as an index to measure the performance of a company. Investors who trade in future basis speculate stock indices, interest rate & other financial instruments.

In nifty future, a future contract is established on the basis of benchmark of NSE. The period time of Nifty future is considered to be 3 months. Now lets us have a look on few steps while trading in nifty future.

Nifty Future Trading Steps

• While trading in nifty future one should have to open a nifty future trading accounts. 
• Liquid contract month is the best way to trade. For example November month is considered to be a    liquid month because it is an expiry month.
• Lastly if a trader wants to close a future contract then he should have to sell its present month contract as well.

Intraday Nifty Future Trading

In Intraday trading traders make huge profit on single day price fluctuation basis in stock & index. Now here are the few steps while making huge profit in intraday calls.

•  Before trading in nifty future, one should check whether the total selling & buying quantity increases    buying which implies rising of stock or vice versa.
•  Go for the right price fluctuation in market.
•  Nifty future is considered to be unpredictable risky market where a investor suffer from a huge loss so it would be better to trade with a stop loss.
•  You should have patience while trading, need to watch the right time to put your capital in to the market.

So if you want to start trading in nifty future and want to know more about it visit us here: http://www.capitalstroke.com  or Contact us: 9770670009, 0731-3299704

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Equity v/s Future Contracts In Indian Trading Market

Investment in stock market assures maximum profit return for an investor. While investing mostly people do the same mistake while assuming stocks & future are same. Here we are going to differentiate stock and future contracts.

a)  Own a Stock  and You Contract The Future

Traders first buy a stock and enter into future contracts. Whenever an investor buys a stock he is supposed to be buying a part of the company in which he is going to trade this is why stocks are also referred as “shares”.On the other hand in future contract in spite of buying any commodity like cotton, wheat or corn , you just settled a contract in which an investors may be a buyer or seller based on the future price of commodity. For example if you found that the price of silver is moving higher then you contract as a buyer of silver with the hope of raising the price and vice versa.

b) Future Contracts Involve Buyer & Seller 

Future contracts held between buyer & seller so if one is assuming that the price of commodity is moving high than the other one assumes that the price is moving down. This means the future contracts are usually zero sum trade.As in the commodity market liquidity is maintained, no such exception occur like someone holding the opposite position.

c) Valuable Profit Return

When an investor buying a stock from a company he is supposed to be investing his money into that company hoping of gaining the maximum profit return. However the profit gaining is depend upon the value of the stock as well as company itself. Well in future a contract is agreed between a buyer & seller there is no Enron type of experience. Someone is there to handle the other side of contract.

d) Time Limit of Future contract 

 As it name suggest that future contract are mainly delivery of a commodity in future which have a fixed time delivery month. Such as if the corn has a November month of delivery the it will only deliver in November month.

So by considering all these points now we are cleared how to deal with stock as well as future contracts.

For any further query you can contact us and get more detail on all segments of market. Visit our site: http://capitalstroke.com/ or Contact us: 9770670009, 0731-3299704

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Future contracts Basics

Future Contracts
A standardized agreement between buyer & seller in which seller have to deliver a specific assest for a fixed price to buyer on specific date & time on future basis or  in other words it is an zero –sum game between buyers & sellers. Future contract was established in 1848 the Chicago Board of trade (CBOT) one of the oldest future exchange in united states. Future contracts include few aspects such as the identity of an underlying commodity, size of the future contract, its expiration date, procedure to follow and the future price.

Assets involved in Future Trading 

Agriculture Goods (wheat, maize) etc
Natural Goods (oil, natural gas) etc
Fixed Income Securities (T-Bonds)
Foreign Currencies (pounds, marks) etc
Market Indices (S+P 500, value line) etc

Clearing House Functions
-A orderly and stable meeting place for buyers & sellers
-Safe the parties for huge losses
 For a future contract to go an initial and maintenance margin set up

Future trading accounts
A future exchange allow exchange members to trade, exchange trader may be a individual firm or a brokerage firm.

Market Participants

1. Hedgers- Hedgers are those traders who transfer price risk from an existing position. Hedgers are those traders who buy & sell in spot market in order to reduce the risk associated.
2. Speculators - These types of traders buy & sell on future contracts basis with the aim of hoping maximum profit return.

Marking Market - The process of maintaining an investor’s account in equity in order to settle the price for future contract, each day a new contract is set up while replacing the old ones. The settled price is assumed to be the purchase price of that day. On the basis of that fixed price a contract is set up. Now to these whole process price limits are set up.

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How Stock Future works??

The future market trade for the delivery of commodities in future time. One such class of future contract is Equity future which have value based contract on selected stock. Now how the stock market works lets us have looked over it. It can be found that in the past couple of time US market is volatile so stock future is one of the way to hedge your investment.

Let us take an example suppose you want to purchase Popcorn Company and for making that product you need to purchase the corn. Each day the price of the corn goes up and down. But you want to purchase that corn at low price so that you will get maximum profit while selling that product. But it is found that the price may vary on each day due to which traders enter in to future contracts with a farmer to purchase his corn at a particular price with specified date in future. But on the other side the farmer is also making money he is not agreeing with the selling price. So after a fair price mentioned both of they agreed with the contract.

In the same way stock future works two parties agreed future contract of particular stock at a specified date. As future trading involves lots of risk but with an appropriate way one can gain more profit.

So lets start trading in stock future market join us to get more detail http://capitalstroke.com/stock-futures-tips.php or Contact us: 9770670009, 0731-3299704

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Basic Terms of Equity Derivative

Equity derivative is a financial class of derivatives whose value can be derived from one or more equity securities. Option and future are one of the most commonly used equity derivative. There are many types of derivative found over the worldwide. Here we are going to discuss a few of them.

1. Stock Option - It is one of the commonly used derivatives by the investor in order to hedge the risk, if a investor is holding a stock option position then he have the right over the stock but not the obligation to sell & buy the assets stock option have liquidity and transparency to work with them. Much care should be taken while trading in option market.
2. Single Stock future (SSF)- It is a contract to deliver a particular stock  during its designated time. The price of SSF is basically depending on price of an underlying stock plus the cost of interest minus its dividend. Trading in SSF require very low margin.
3. Warrants- Warrants are right to purchase a stock over its predetermined date. The price of the stocks here are higher as compared to underlying asset. Unlike stock option warrant price also include time premium.
4. Contract for Difference - An agreement where the seller pay the net amount of current value of the stock & its value. CFDS are available to certain countries such as Germany, Japan, Singapore, Africa, France Canada and United Kingdom. The main advantage CFD is its pricing simplicity 

Trading involve lots of risk so to on safe side while joining our services. For more details log on to: http://capitalstroke.com/stock-futures-tips.php or Contact us: 9770670009, 0731-3299704

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