Derivatives

Understanding on Margin Shortfall Penalty

Understanding on Margin Shortfall Penalty   As per SEBI (Securities Exchange Board of India) rules, a margin shortfall penalty is levied on the overnight position held in the trading account without sufficient margin. In our previous article, we explain the margin system in derivative trading, once read the article before getting into this. If you …

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Risk Management In Futures and Options Trading

Risk Management In Futures and Options Trading     Most of the derivative market traders, don’t have a clear picture of margin money and how it’s different from the futures and options writing. Let us try to explain with examples. Remember one thing, the future margin is always higher than the option writing. If you …

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How To Use Implied Volatility In Option Trading

How To Use Implied Volatility In Option Trading     Recently, one of our fincareplan readers asked a question related to option premium. It was a little complicated but we try to answer his question. The question was, he took the Nifty 13400 call option at the premium of 200 Rs on 9th December 2020, …

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Basic Concept of Open Interest and Volume

 Basic Concept of Open Interest and Volume     Derivative traders have confused about the terms open interest and volume of the particular stock, let me try to simplify the answer in a simple way. Before going to analyze the open interest data. First, clarify the volume. Volume plays a crucial role in technical analysis …

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PEAK MARGIN RULES FOR FUTURES AND OPTIONS BY SEBI

PEAK MARGIN RULES     Peak Margin Rules, the capital market regulator Securities Exchange Board of India (SEBI) has come up with new regulation in the upfront margin system in cash and future & options segment. In November 2019, SEBI had announced the peak margin regulation for the intermediaries in the capital market but none …

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INDIA VIX VOLATILITY INDEX SHARE PRICE FOR OPTIONS TRADERS

INDIA VIX VOLATILITY INDEX SHARE PRICE ANALYSIS     Most of the option traders familiar with the term India VIX, but don’t know about the function of the volatility index. Here we can simplify the calculation for a better understanding of our fincareplan readers. We have a basic understanding of derivatives markets in our previous …

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OPTION GREEKS DERIVATIVE MARKET

 OPTION GREEKS DERIVATIVE MARKET       In our previous articles, we have discussed more options terminologies. Most of you would be ready for trading.   Still may have confusion about option premium, how it’s calculated, and nearby expiry out-of-the-money option was expired worthless why it is so?   Derivatives are a complex instrument. Let …

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FUTURES CONTRACT AND MARGIN MANAGEMENT IN DERIVATIVES MARKET

FUTURES CONTRACT AND MARGIN MANAGEMENT IN DERIVATIVES MARKET   This topic completely a knowledge sharing on Future contracts and Margin Management in the derivatives market.   We had already discussed the basics of derivatives, most people have a lot of confusion about future terminologies and different type of margin levied by an exchange. Let us simplify …

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