Stocks To Keep A Close Eye On

[rajeshn2007]

But, this won't protect all the profits.....only some?

Now, assume if have bought IFCI PE(from January onwards) 60 at Rs.2 for a total of Rs.8000. Now, price of IFCI goes from 65 to 55. Then we buy IFCI futures at 55 . But, then IFCI finishes at 60 on expiry. So, we lose the premium of Rs.8000. But, we gain on futures for a total of Rs.20,000 (Rs.5*4000) - Rs.8000 = Rs.12,000. Out of this, we have to pay for brokerage costs plus expiry cost. I think STT on expiry is quite large... so perhaps there will be much less profit?

So, with the new PE system from Jan, perhaps we can assume that profits will be halved. Because, exercising at 55 would mean Rs.20000 profit. But now, profit is Rs.12000.

Apologies if figures above are incorrect. I am still learning options.

@ Amit that's right. if the options were american one could have exercised at 55, as you have said.

but in this case it is 12k, which is better than the options going worthless, if ifci closed at 60 on expiry day.

 

[beegee]

Hi SM,

Let us first see all the rules being outlined by the exchanges.... just because it becomes Eurpean doesn't mean it has to follow exactly...there might be some tweaking... but we will not know till NSE lays out the whole outline for the same....

Suggest don't press any panic button..yet...as it is our options market is not even 5% of the advanced markets....and is very lopsided

SavantGarde

Mr SG - I have read somewhere that in America markets, there are special people called market makers who control stocks and options prices.
Here is that article : http://www.allstocks.com/markets/Ma..._NYSE_Spe/about_market_makers___nyse_spe.html

Are there such people here too and are they same as operators?

What I had read was that these makers are officially assigned by American exchange to control prices.

Is that even legal here?

Best,
B.G Maxine

 

[MurAtt]

market makers

the GOI, LIC, DII when the markets are tanking with a hole at the bottom
the FIIs when they are pumping dolls into our financial system and the markets fly with a hole in the top of the tank
the retailers when we see that the market has reason to remain rangebound ...

 

[SavantGarde]

Hi Maxine,

When I meant fire in the belly for learning...didn't mean you start a blaze....

Anyways....all this jumping from one topic to another is not going to help you with learning....

Market Makers provide liquidity to a market or to a particular stock.... suggest you start from the bottom... or else at the end of it you will find you haven't learned anything

SavantGarde

Mr SG - I have read somewhere that in America markets, there are special people called market makers who control stocks and options prices.
Here is that article : http://www.allstocks.com/markets/Ma..._NYSE_Spe/about_market_makers___nyse_spe.html

Are there such people here too and are they same as operators?

What I had read was that these makers are officially assigned by American exchange to control prices.

Is that even legal here?

Best,
B.G Maxine

 

[beegee]

market makers

the GOI, LIC, DII when the markets are tanking with a hole at the bottom
the FIIs when they are pumping dolls into our financial system and the markets fly with a hole in the top of the tank
the retailers when we see that the market has reason to remain rangebound ...

Good one SM :lol:

The market makers as per article look like Gods, they can see all orders and can change the stock order flow and that too legally

It says that there are makers in every stock - so that means they know everything about a specific stock which retailers never can, isn't it because it is their sole job to work in assigned stock symbol? How awesome and legal again !


Best,

B.G Maxine

 

[beegee]

Hi Maxine,

When I meant fire in the belly for learning...didn't mean you start a blaze....

Anyways....all this jumping from one topic to another is not going to help you with learning....

Market Makers provide liquidity to a market or to a particular stock.... suggest you start from the bottom... or else at the end of it you will find you haven't learned anything

SavantGarde

Understood loud and clear Mr SG :thumb:

Will stick to Indian stocks and markets.

P.S : Now I know what information overload really means courtesy Google and Bing :lol:

Best,
B.G Maxine

 

[SavantGarde]

SM,

Bhave is not a friend of mine..just said he has joined my friend's Scuba Diving School....

anything besides oxygen in his tank.... can be organised...

SavantGarde

SEBI .. simplify please .... @SG .. start a petition or do we directly contact your friend Mr Bhave and threaten him with dire consequences joking

 

[enygma]

SM,

There will no such "options" between European and American. All stock options expiring in Jan 2011 and beyond will only be European. NSE will now require SEBI approval to switch back to American.
I figured this out when I found some Jan options actually cheaper than December ...

The news link

http://www.business-standard.com/india/news/nse-to-launch-european-style-stock-option-contracts/114051/on

Regards,
E.

Yes

BUT

American Options will also continue ... writer has choice ...

Also ... we would then find bcoz of this choice .. that European Options would be priced cheaper bcoz of this drawback maybe ... (of course this is just plain thinking from me now) and we can

Sell PA and Buy PE and pocket the difference except that if PA is assigned then it will be a pain in the axx OR maybe I am thinking like what my initials stand for

And yes ... it will be a pain in the axx for checking OI .. PAs and PEs ...

SEBI .. simplify please .... @SG .. start a petition or do we directly contact your friend Mr Bhave and threaten him with dire consequences joking

 

[gauharjk]

"We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.' " -- Warren Buffet

 

[CASPER]

Mr SG - Good morning and happy Saturday.

How can one detect whether prices moving up are because of short covering or genuine buying?. Check at NHPC , attached screen Shot

Best,
B.G Maxine

Dear Maxine,

One of MY observation that price is moving up is due to short covering is that there is a gradual decline in the Open interest of the stock , i.e price Moves UP whereas Open interest keeps decreasing .

Please Check NHPC screen shot attached.

As SG mentioned ,

Anyways....the queries you raise...will get answered once basic PA is explained in detail....

SavantGarde


Lets us wait,

Best Wishes,
Nithin.

http://img227.imageshack.us/i/nhpc2.jpg/