Wednesday, 22 October 2014

What is the difference between 'Block deal' and 'Bulk deal'?

We sometime read or hear, terms such as bull deals and block deals that are used in business newspapers and TV channels with stock listed companies. We are giving more information related to  Free Intraday Tips that will help you to know more about block and bulk deals

Block Deal

Block deal is a trading of shares, with a minimum qty of 5 lakh shares or minimum value of Rs. 5 crore, executed through a single transaction, on the special "Block Deal window". The window is opened for only 35 minutes in the morning trading hours in Nse exchange.

Stock Brokers should disclose this block deals on daily basis, as per the requirement of Market regulator Securities and Exchange Broad of India through Data Upload Software (DUS). 

Usually block deal happens when two parties (buyer and the seller) who agree to buy or sell shares at an mutually agreed price between them and inform the stock exchange. These orders in a block deal are not shown to the traders who trade from normal trade window. 

Nse discloses the information on block deals to the public on the same day after market hours. This should contain information bits like name of the scrip, name of the client, quantity of shares, traded price of the stock etc.

Bulk deal

Bulk deal is a trade, where total quantity bought or sold is more than 0.5% of the number of equity shares of a listed company. 

Bulk deal can be transacted by the normal trading window provided by brokers throughout the trading hours in a day. Bulk deals are market driven and take place throughout the trading day.

As per Sebi instructions, the stock broker, who facilitates the trade, is required to reveal to the stock exchange about the bulk deals on a daily basis through Data Upload software. 

Bulk orders are visible to everyone. If the bulk deal happens through a single trade, it should be notified to the exchange immediately upon the execution of the order. If it happens through multiple trades, it should be notified to the exchange within one hour from the closure of the trading.

Regulatory requirements in NSE

According to SEBI guidelines , to facilitate block deals, Nse stock exchanges provide a separate trading window for only 35 minutes in the beginning of the trading hours. 

The transaction price of a share ranges from +1% to -1% of the previous day’s closing or the current market price. Also the shares that are transacted under the window of block deal should not be squared off or reversed.

Bulk and Block deal participants 

While major participants in bulk and block deals are institutional players; there are super HNIs (high net worth individuals) also involved in such deals occasionally.

Mostly, mutual funds, financial institutions, insurance companies, banks, venture capitalists and foreign institutional investors trade in such deals. The window is also used by many promoters of the companies.

Sometimes many small traders think that block/bulk deals in some shares will increase the prices of that stock so they try to buy the same. We want to caution those traders that, a block or bulk deal in a stock do not mean that stock price of that specific stock will increase. We want Investors and traders to study the fundamentals of the stock and its performance over the years, read charts before they make investments in share market

To summaries Block deal is a trade, with a minimum quantity of 5, 00,000 shares or minimum value of Rs. 5 cores, executed through a single transaction, on the special "Block Deal window".

Bulk deal is a trade, where total quantity bought or sold is more than 0.5% of the number of equity shares of the company.

The orders in a block deal are not shown to the people who trade from normal trade window or Free Stock Tips. Bulk orders, on the other hand, are visible to everyone.

Saturday, 20 September 2014

Are you a stock lover or profit lover in share market?

Stock trading has its own advantages and perils associated with it. With the option of online trading now available to the traders, the frequency of trading has also increased. The traders go on with frequent trading without realizing its perils. It is true that learning the art of Free stock Sock Tips trading is a time consuming and gradual process, but there are certain thumb-rules that can be followed from the day you start trading. Avoiding frequent trading is one of them. Traders often end up buying stocks of low quality.

The primary reason for this danger is the wide gap that is created in the bid and ask spread of such investors who indulge in frequent trading. The stock prices go up before the investors begin to make profit. The secret behind successful trading lies in holding up the stock for some time and selling it at the appropriate time. It is important to focus on good quality shares of well-established companies and holding the stocks. Hence, a trader must not be a stock lover, but a profit lover. A trader must always choose profit over stocks as the main goal of trading is to make money and not storing stocks in your kitty. A stock is valuable only when it gives profit to the trader by Intraday free Stock Tips.
  • Frequent trading of stocks, especially for beginners can be hazardous as they might end up buying thinly traded and low quality stocks.
  • The primary focus of the traders must be in the profits and not the stocks.
Perils of frequent trading and why traders should aim towards profit rather than stocks In the high speed marketing trends, patience is a rare virtue. Online stock trading has made the entire process of trading easy and convenient. Not only the traders can cut short the commissions that they have to pay to the brokers, but can also trade anywhere and anytime. It may sound easy to make money with online trading, but in reality, online trading can be perilous and may make loosing money easy if not done with caution.

The traders often indulge in frequent trading and end up buying and selling shares without realizing the consequence. It is always advisable to hold shares until its price reaches a certain limit. Patience while trading always pays dividend. It has been observed that people while trading online go on a shopping spree and end up buying shares that have no value and have not shown any trend of growth. Proper research before buying or selling shares is very important part of trading and must be performed if you wish to make profits. Adding frivolous shares in your portfolio will not help, instead the trader should lay emphasis on making profits by buying and selling the right shares at the right time.
  • Traders must not see online trading as an easy way to make money by trading frequently.
  • They must realize the hidden dangers that may not be spotted at first.
  • The real goal behind trading is always making a profit and hence, all the efforts should be focused towards to it.

Monday, 25 August 2014

Insider Trading and Formulation of New Rules to Curb it.

Insider trading is considered an unethical practice as it involves selling the stocks and securities of a public company by a person who has the access to the non-public information about the company. It is grossly unfair to other investors who do not have access to such information. Insider trading tends to raise the cost of stock tips and thus triggers economic slowdown. Insider trading for employees are allowed in some places as long as it is not based on information that is not under public domain. Insider trading is even considered illegal in many countries. It is not that only the director of a company can be convicted of insider trading; broker and family members too who have utilized the exclusive information can be convicted. If the information that has been utilized for insider trading becomes public, it is no longer considered as illegal. It is, however, possible for insiders to trade but only through information which is in the public domain.

Insider trading simplified

Insider trading refers to the act of performing a trade based on information that is not publicly available. Such an act is considered illegal, as well as unethical, and is punishable under the Prohibition of Insider Trading Regulation Act, enacted by SEBI all the way back in 1992. Company executives often have advanced knowledge of the decisions that a business is going to take, and can predict whether the prices of the best share tips will rise or plummet as a result. This information cannot be made available to the general public, and since market share trading should be  performed only on the data that everyone can have access to, the SEBI made insider trading illegal. For close to 2 decades, only the executive level officials of a business were considered insiders, but the SEBI made a revision in the law in 2013, that now includes all officers who have access to unpublished classified information. This new change is expected to curb insider trading in India considerably and will make the act punishable for people who could earlier get away with it. 

Closing in on inside traders

SEBI has gone to great lengths to ensure that there are no loopholes that allow insider trading. Not only are the executives and upper tier employees of a company who potentially have access to insider information required to provide their trading plans in advance, relatives and professional contacts of these individuals are also covered by the purveys of the insider trading prohibition law.
The regulations also include a clause that requires every listed company to create a code of conduct. This is applicable to market intermediaries as well, and all such organizations are required to put in place a system that monitors its employees for such activities. Similarly, trades performed by company stakeholders and their families will need to be evaluated and verified by the company, and hence all trades must be internally submitted to the company for verification.

These steps, and more will hopefully curb the demon of insider trading in India, and give market traders a fair chance to conduct their business.

Wednesday, 13 August 2014

Day Trading Strategies in Current Indian Market

Day Trading, as the term implies, refers to the practice of completing both buying and selling Free Stock tips in a single trading session/day. In this the basic principle is that of an immediate view avoiding the likely tremors of overnight newsflowsimpacting the stock prices. Since both buy and sell is concluded in a single session the fundamental analysis has little relevance in this style with the emphasis being on the trend, market sentiments and technical analysis.

Short Selling in Day Trading Strategies
Traders, depending on market trends, often indulge in Short Selling. This is a practice in which traders opt to sell first and buy later. Short selling has been a frequently used strategy in Day trading. Several indicators in intra day market trends encourage traders to adopt short selling. For example, if the Opening price and the Day High Price of a particular Best Free Stock Tips Provider is identical, then the trend of that stock is downwards and it can be short sold for the day to make money. Alternatively, if the Opening Price and Day Low of a stock is identical, then the trend of that stock for that day would be a rising one and trader should have a long (i.e Buy) position on that to make money.

Understanding Market Trends for Short Selling 
In case the trend is negative for a particular session, traders may opt for Short Selling. Through short selling, therefore, traders often capitalize on the falling trend. In case the trend looks positive, then the conventional method of buying first and selling later is used. Both these methods can be used because the trade is settled at the end of the session without levying any future obligation on either the buyer or seller.

In order to generate volumes and encourage traders, the brokers provide what is known as Exposure on the available Cash Balance of the trader. This basically means allowing the trader to transact with more funds than he has. The Industry average of this is around 10 times the available cash balance. However, this may vary depending on three conditions, namely,
  • Market conditions
  • Brokers requirement for business
  • Client rapport
  • Requirement available to the broker

Commonly known as Intra-day or speculation trading, the brokerage and statutory dues in Day Trading are much lower as opposed to the conventional delivery model. In the latter, the client buys the Best Stock Tips fully with his own funds and holds it till he gets a good price.

Analyzing Market Situation for Short Selling
This is applied when there is uncertainty and volatility prevalent in markets created by political and social situations. A case in point could be the situation created prior to the new BJP Government coming to power.Charting and technical analysis like the head and shoulder pattern, candlesticks, bar charts, etc.can be used to understand the probable trading pattern in the next few hours and plan strategies to profit from the same. This is possible because the trade is settled at the end of the session without any obligation on either the buyer or seller in the future

There are some clients who are compulsive traders who indulge in short selling to enjoy the throbbing market pulse. However, more often than not they end up losing money because of the short time span that they have at their disposal to predict and time the markets.

Saturday, 9 August 2014

Catching the market trend to earn more from share trading

Making a profit in share trading requires a thorough knowledge of how it works and what factor influences it. Experience and skills have no substitute in share trading and one must learn to assess the market condition to be able to be able to use them to the advantage. The traders should also be well versed with the terminology and jargon's used in the share market to effectively communicate with the brokers and advisory companies. If the trader is able to understand the market trends, it will be easier for him to predict the prices of shares and upcoming market conditions more accurately and precisely. It is advisable to follow the trend of the market and trade as per it to register high profits. Analysis of the market trend is carried out by mapping the historical data about the market on a 2 dimensional graph and by looking at it, one can easily understand the pattern of the fluctuation. Share market tips come in handy when the person is new to trading. This is called technical analysis of the market and is performed with the help of software tools. Free Stock tips that have good volume and volatility is more likely to give profits. The high volatility of a stock is indicated by the fact that it rises by more than 1 % when the index rises by 1%. In case of intra-day trading, apart from identifying volatile stocks, fixing a strict stop-loss is equally important. Many such share tips and stock market tips should be sought before actually start trading.

  • Pre-market information is the condition of the market before opening up in the morning.
  • Market trends can also be predicted by fluctuation of the price of crude oil and gold.
  • Best Stock tips from trusted sources help in reading the pattern of the market.
Common market trends and their impact

The traders must devise their strategies according to the ongoing market trends and also try to predict the future trends according to the historical data. Short selling is often made by the traders where they sell borrowed shares. Practiced generally by seasoned traders, short selling is motivated  by the belief that a share's price will decrease in future.

  • Bullish trends: Bullish trends signifies an upward trend in the market. When the price of stocks of an industry rises and it also shows on the broad indices like Sen-sex and nifty, the market is said to be experiencing a bullish trend. The bullish trend in the market also manifests the buyer's confidence in the market. When such a trend follows a low period, it indicates the recovery of the economy. The name of the trend is the metaphor for the action of the bull, as it runs fast.
  • Bearish trends: Bearish trend is the paradox to Bullish trend. When the price of any industry's stocks declines sharply and it also reflects in the broad indices, i.e. Nifty and Sensex, the market is said to be experiencing a bearish trend. It is characterized by the lack of confidence about the market among the buyers. When the price fall in the stocks is in tune of 20%, it is indicative of Bearish trend.