Stock Market

How to get refunds of Casino Tax

2009-07-20T07:28:00.000-07:00

In the United States, casinos and similar establishments normally clam up 30 percent from the gambling winnings since this is the necessary percentage of the IRS. Canadian citizens are bound by the U.S.- Canada Treaty, allowing them to offset their gambling losses against their gambling winnings. This is usually reported and evidenced by Form 1042-S, which in turn becomes the basis for Canadian citizens to get gambling tax refunds. The taxes withheld can be reverted to form part of a U.S. resident and non-U.S. residents' casino tax refunds. Not all of the casino gamblers can qualify to claim casino tax refunds. The IRS can be strict in recognizing those eligible, which is why those who wishes to get gambling tax refunds must be aware of the requirements in order not to be disappointed. Those who are eligible for the refund must be:

* A winner of a taxable game from a qualified gaming activity in the last three years
* A holder of I.R.S. Form 1042-S given by the casino
* A qualified loser of casino games as stated in the Canadian-U.S. Tax Treaty

How to Get Casino tax rebate

Casino tax refunds can be taken back even after three years from the date of winning. This is why it is always important to take note of winnings and losses, especially for those who frequent casinos. Evidences such as tickets, statements or records that can fully substantiate the winnings or losses is enough to prove to the IRS that you are eligible for gambling tax refunds. Casino losses can also be approved by showing canceled checks, bank statements showing withdrawals, and other alike documents.

Buy Gold for 2009

2009-07-03T05:48:00.000-07:00

As everyone willing to diversify his portfolio. Gold is must have item in it. And in the time of economic crises its best to Buy Gold.

And for buying gold its must to find best place to buy. Gold Coins Gain is one of the best place I know. Its online place for buy gold coins, buy gold bullion, gold coins, gold ira transfer, current price, news, history and many more. For more detail you must visit the site. Its must know place for gold lovers. You can buy gold of following type.

Liberty Quarter Eagle
Saint Gaudens Double Eagle
Gold American Eagle
Gold South African Krugerrand
Gold Canadian Maple Leaf
American Buffalo
Australian Gold Nugget
Austrian Gold Philharmonic
Chinese Gold Panda
American Platinum Eagle
American Silver Eagle
Canadian Platinum Maple Leaf
Canadian Silver Maple Leaf
Silver Rounds
And Many more

Here are few more reasons to invest in gold.

It will never go to zero
Best investment in Inflation and Deflation
Best diversifying option.
Ever growing demand in the world
Investment without fear.
Buy gold coins for best performance against dollar fluctuation.

For more check the site goldcoinsgain.

How to select a Stock

2009-05-02T12:06:00.000-07:00

There are two methods available for selecting stock.

These are

Fundamental Analysis
Fundamental Analysis

Fundamental analysis is the analysis of a stock on the basis of core financial and economic analysis to predict the movement of stocks price.

The fundamental information that is analyzed can include a company's financial reports, estimates of the growth, industry comparisons, and economy-wide changes, changes in government policies etc.

Some people believe that the movement of the stick price can be predicted by analysis of chart of price and volume movement. While other group not believe on this and follow only fundamental analysis.

On the other hand, technical analysis is the study of prices and volume, for forecasting of future stock price or financial price movements.Let we discuss how to do fundamental analysis.

The market price of a stock tends to move towards it's “real value” or “intrinsic value”. If the “intrinsic/real value” of a stock is above the current market price, we would buy the stock because we know that the stock price would rise and move towards its “intrinsic or real value”

If the intrinsic value of a stock is below the market price, we would sell the stock because we know that the stock price is going to fall and come closer to its intrinsic value.

After you understand the company & what they do, how they relate to the market and their customers, you will be in a position to decide whether the price of the companies stock is going to go up or down.

When investing in the stocks, we want the price of our stock to rise. Not only do we want our stock price to rise, we want it to rise FAST! So the challenge is to figure out: which stock prices are going to rise fast? Keep in mind that the price of the stock is not much important. The most important is the rise in the stock’s price by percentage. For example if you buy a stock A at price of 3000 Rs and after a month it rises to 3100 you get 3.3% profit and you buy another stock B at price of 10 Rs and after a month it rises to 11 Rs you get 10% profit. So A rises 100 Rs and B rises only 1 Rs still B is better than A by looking at profit. So when picking a company, we are interested in a company whose stock price will rise by a large percentage.

By looking at the above example, it may seem like a good idea to buy all the really cheap Rs.10 stocks hoping that their price will rise by 10% or more. This sounds good, but it can also be really bad some times! If it fall Rs.1 you will also loose 10%!!! So the question is how do you find out what the intrinsic value of a company is? To start finding out the intrinsic value, the investor makes an examination of the current and future overall health of the economy as a whole. After you analyzed the overall economy, you have to analyze firm you are interested in. You should analyze factors that give the firm a competitive advantage in it’s sector such as management experience, history of performance, growth potential, size of firm, brand name, customer base, competitive advantages, local and global market presence, Production capacity etc. Find out as much as possible about the company and their products.

Other than these fundamental analysts use different tools and ratios like EPS, PE, PEG etc. to compare all companies. To know about it read my “Stock Market Ratios – EPS, PE, PEG ” article.

Essential Accounting Morality

2009-04-20T05:25:00.000-07:00

Accounting has been definite as, by Lecturer of Accounting at the University of Michigan William A Paton as having one basic purpose: "facilitating the administration of economic action. This function has two closely related phases: 1) measure and array economic data; and 2) communicate the consequences of this process to paying attention party."

As an instance, a company's accountants every so often measure the income and beating for a month, a quarter or a fiscal year and issue these results in a declaration of profit and loss that's called an income declaration. These statements contain elements such as accounts receivable and accounts owed .It can also get pretty complex with subjects like retained pay and accelerated reduction.

Much of accounting although, is also concerned with basic secretarial. This is the process that records every deal; every invoice paid, every dime payable, every dollar and cent exhausted and accumulated.

But the owners of the company, which can be individual owners or millions of shareholders, are most worried with the summaries of these dealings, contained in the monetary statement. The financial statement summarizes a company's possessions. A worth of an asset is what it cost when it was first acquired. The financial declaration also records what the sources of the assets were. Some assets are in the shape of loans that have to be salaried back. Profits are also an asset of the commerce.

In what's called double-entry secretarial, the liabilities are also summarized. Obviously, a company needs to show a higher quantity of assets to offset the liabilities and show a income. The management of these two rudiments is the spirit of accounting.

There is a scheme for doing this; not every corporation or individual can plan their own systems for secretarial; the result would be disorder!

Something about Accounting

2009-04-16T05:47:00.000-07:00

Anybody who's worked in an place of work at some point or another has had to go to accounting. They're the people who pay and send out the bills that keep the commerce running. They do a lot additional than that, though. From time to time referred to as "bean counters" they also keep their look at on profits, costs and losses. If not you're organization your own business and acting as your own accountant, you'd have no way of knowing just how gainful - or not - your business is without some shape of accounting.

No matter what business you're in, even if all you do is equilibrium a checkbook, that's still accounting. It's part of still a kid's life. Saving an payment, spending it all at once - these are accounting main beliefs.

What is some other business where accounting is dangerous? Well, farmers need to follow careful accounting events. Many of them run their farms year to year by captivating loans to plant the crops. If it's a high-quality year, a profitable one, then they can pay off their loan; if not, they strength have to carry the loan over, and accumulate more interest charge.

Each business and every person needs to have some kind of accounting scheme in their lives. Or else, the money can get away from them, they don't know what they've spent, or whether they can wait for a profit or a loss from their business. Staying on top of accounting, whether it's for a multi-billion dollar business or for a individual checking account is a necessary action on a daily basis if you're smart. Not doing so can mean no matter which from a bounced check or posting a loss to a company's shareholders. Both scenarios can be evenly overwhelming.

Inflation Calculation (WPI)

2009-03-23T04:01:00.000-07:00

How do you calculate inflation?

Inflation is in talk for many in recent weeks, and has received a great interest from the media and politicians. At the same time, inflation is a monetary problem that the normal person meets on a daily basis in terms of top prices, particularly of food products.

How is inflation calculated?

In India, there are two broad measures of inflation - based on the consumer price index (CPI) and based on the wholesale price index (WPI). Of the two, the second has a higher summary because it is measured every week. When you read about inflation rising to 12%, it is probably referring to inflation based on WPI.

WPI is based on the wholesale prices of 435 items ranging from agricultural commodities like wheat, rice etc to manufactured products like steel, cement etc. A single index number is calculated based on those prices, and the inflation rate is calculated by comparing the most recent index number with that of a last year.

Last weeks figure is 0.44. That's very low so RBI rate cut is expected. Also experts believe that we will see deflation soon. That is negative inflation!

Day Trading or Margin Trading

2009-03-03T02:55:00.000-08:00

Day Trading

Day trading involves taking a position either long or short in Stock Markets and squaring off that position before the end of the day. A Day trader may buy and sell a stock within few minutes to within few hours on the same day. The aim of a Day Trader is to take benefit of the price movements within one day to earn profits. A Day trader may trade several times in a day in a same stock or another stocks, but he will close all his positions before the end of the trading day.

Benefits of Day Trading

Day traders can use multiple exposures on their margin amounts. Day traders have more leverage on their assets due to low margin requirements since their trades are closed before the end of the day. By following strict money management rules and taking calculated risks in utilizing multiple exposure on their margin money, Day Traders can increase their earnings substantially.

Day Traders can take either long or short position depending upon the movement of the Stock Market. If the markets are in strong up-trend, day traders can take long positions and if the markets are in down trend, day traders can take short positions to take advantage of declining stock prices. In this way Day traders can earn profits in any market direction and earn profits every day in both rising and falling markets.

Since Day traders close their positions before the end of the day, News, Global events and other events that affect the next day’s opening price do not show any influence on earnings of the Day Traders.

India's Top 10 Scam Makers

2009-02-26T22:24:00.000-08:00

Here is a list of founders of India's top 10 scams

Ramalinga Raju
Harshad Mehta
Ketan Parekh
C R Bhansali
Cobbler scam
Dinesh Dalmia
Abdul Karim Telgi
Virendra Rastogi
The UTI Scam
Uday Goyal

Derivatives :- Swaps

2009-02-07T22:15:00.000-08:00

Swaps

It is private agreement between two parties two exchange cash flows in the future according to prearranged formula. There are mainly two types of swaps

Interest rate Swaps :- These entails swapping only the interest related cash flows between the parties in the same currency.
Currency Swaps :- These entails swapping both principal and interest between parties, with the cash flows in one direction being in a different currency then those in opposite direction.

so we learned all types of derivatives in my last four post from next post we will learn some more stock and derivative fundamentals.

Thanks for reading my posts.

Derivatives : Stock Options

2009-02-04T02:05:00.000-08:00

Option
As name implies, an option contract gives the buyer an option to buy or sell an underlying asset (stock, bond, commodity etc.) at a predetermined price on or before a specified date. The predetermined price is known as “Strike Price” or “Exercise Price” and predetermined date is known as “Expiry date”

American Option and European Option
If the option can be exercised at any time between the writing of the contract and its expiration date, it is called American Option. If the option can be exercised only on the date of expiry it is known as European Option.

Types of Option

There are mainly three types of Option

1. Call Option :- A call option gives the option holder (Option Buyer) right to BUY the underlying asset at a predetermined price called “Exercise Price” or “Strike Price” (Example Option is nothing but a piece of paper on which it is written that “I will BUY XYZ co.’s share at Rs. 100 on 29th Febuary,2008” and in order to keep that paper I had paid PREMIUM). The holder of the option always pays premium to the seller (Writer). Writer is in obligation to sell the underlying without of any argument.

2. Put Option :- A call option gives the option holder (Option Buyer) right to SELL the underlying asset at a predetermined price called “Exercise Price” or “Strike Price” (Example Option is nothing but a piece of paper on which it is written that “I will SELL XYZ co.’s share at Rs. 100 on 29th Febuary,2008” and in order to keep that paper I had paid PREMIUM). Writer is in obligation to buy the underlying without of any argument.

3. Double Option :- A Double option gives the option holder both the rights either to buy or to sell the underlying assets at a predetermined price.

PREMIUM :- Premium is nothing but a price to be paid to buy “Right to buy” or “Right to sell” (In our example price to buy a legal piece of paper)

Features of Option

1. Highly Flexible :- Option contract are highly standardize and hence traded on exchanges.

2. Down Payment :- The option holder must pay a certain amount called “Premium” In case if option holder will not exercise the option, he has to forego the premium. If he exercises the option, he will get profit after deducting premium from it. Theoretically, writer of option needs not to pay any down payment (But in practical sense, even writer needs to keep some margin money with exchange to avoid risk of defaulter)

3. Settlement :- Contract terminates on expiry date or even before that as per discretion of Buyer and type of contract.

4. Non- Linearity :- Here Profit or loss is not linear to price movement. For Example if I am buying call option of XYZ co. ltd. with strike price of Rs. 100 and pays premium of Rs. 4. Suppose if on expiry date price of XYZ co.’s share is say Rs. 90 and hence I will not exercise option and will not buy share. Hence my loss will be Rs. 4 (equals to Premium ). But if price on the date of expiry is say Rs. 110. So I will buy at predetermined price of Rs. 100 and will earn profit of Rs. 6 (Rs. 10 – premium). So, for Rs.10 fluctuation on either side, my profit and loss is not same (Loss Rs. 4 and Profit Rs. 6). This is known non-linear profit or loss.

Factors affecting Option Prices

1. The current stock price (S0) Call+ Put -
2. The option strike price (K) Call- Put +
3. The time to expiration (T) Call+ Put +
4. The volatility of the stock price (σ) Call+ Put +
5. The risk-free interest rate (r) Call+ Put -
6. The value of dividends expected during the life of option Call - Put +

(Note :- + indicates that with increase in factor price will also increase. And – indicates that with increase in factor price will decrease)

Advantages of Option

1. Help in reducing risk
2. Proper portfolio management
3. Protection against price fluctuation
4. Boon to financial intermediaries

Derivatives : Future

2009-01-24T22:40:00.000-08:00

Future

A future contract is an agreement between two parties to buy or sell an asset at a certain time in future at a certain price. It is a special type of forward where date and contract size are specified by third party (i.e. Exchange in case of capital market)

Example

I am Buying 2000 kg Wheat (means 2 lots as one lot carries 100 kg of Wheat) from Farmer through NCDEX (National Commodity and Derivative Exchange)

Features of Future Contract

Highly Standardised :- Futures are standardize and legally enforceable. They are standardize for Size, Expiry date (Delivery Date), Quality and place of delivery (in case of commodity)
Down payment :- Both parties have to keep margin (Specified % of contract value) with Exchange till the contract gets over or traded.
Settlement :- Though the physical settlement of such contract is done at maturity only but profit or loss is calculated and debited and credited on daily bases (Mark to market).
Linearity :- It means symmetrical gain or loss due to price fluctuation of underlying.
Secondary Market :- As contract is specified by Exchange and hence is having secondary market
Non-delivery of asset :- Generally in future contract underlying are not delivered in physical form. Settlement takes place in monetary only as a profit or loss.

Advantages of Future Contract

Protection against price fluctuation :- Parties to these contract can protect themselves against risk of adverse fluctuation in the price of assets.
Proper planning for buying and selling :- As dates for settlement is specified it will help in planning about buying and selling in time
Proper portfolio management
Proper cash management
Flexibility :- These contract are flexible as party in contract wants to wind up its position, they can do it by paying loss or getting profit from other party. It means trouble of exchanging the assets physically is not there.
Boon to Financial Intermediaries :- Such contract are beneficial to financial intermediaries because if two major reason

(1) As such contract incurs huge profit or loss, importance of proper guidance and advice increases
(2) Contract value is very high hence financial intermediaries can earn handsome brokerages

Example of Settlement

For example, I had purchased future to buy 200 kg Wheat today and settlement date is after 10 days. Today price was Rs. 7 when I had purchased contract. Suppose at the end of day closing price was Rs. 7.20. It means I am earning Rs. 0.20 per kg. Let’s put it in table form

Date Buying/Opening Price Selling/Closing Price Profit/Loss Net Profit/Loss(Mark to Market)
20/2 7.0 7.20 0.2 (2000*0.2) = 400
21/2 7.20 8.10 0.9 1800
22/2 8.10 7.40 0.7 - 1400
23/2 7.40 7.90 0.5 1000

If we take total of last column, it is Rs. 1800 which is equal to product of difference of buying price (Rs. 7.0) and Selling price (Rs. 7.90) and total quantity { 0.9* 2000} = Rs. 1800

Derivatives : Forward Contract

2009-01-24T02:44:00.000-08:00

Forward :-

A forward contract is a customized contract between two entities where settlement takes place at specific date in future at today’s pre-agreed price.

The underlying asset can be stocks, bond, currency, commodity etc.
For Example :- I am buying 1500 kg Wheat from farmer after 25 days from the day of contract at say Rs. 8 per kg.
The Buyer (Myself) who promises to buy Wheat is said to be in the “Long Position”
The Seller (Farmer) who promises to sell Wheat is said to be in the “Short Position”

Features of Forward Contract

Over the Counter (OTC) Trading :- The contract is privately arranged agreement and hence they are not at all standardize in terms of size, exercise date, exercise place etc. They are traded on OTC not on exchanges
No down payment :- As there is no third party involvement and hence no down payment is paid by any party
Settlement at maturity only :- It means that profit or loss are calculated on the maturity date only
Linearity :- It means symmetrical gain or loss due to price fluctuation of underlying.
No secondary market :- It is a private contract and hence hardly it is traded (It means I had made contract with farmer to buy 1500 kg wheat as per my requirement. Now if I don’t want to buy then there should be one party who is having the same requirement then only I can sell my contract to him.)
Delivery :- Place of delivery is specified in contract itself.
No third party involvement :- As no third party involves in such contract, there is always risk of default exists.

Financial Derivatives

2009-01-23T04:43:00.000-08:00

Definition

Derivatives are defined as a product whose value is derived from the value of one or more basic variables called bases or underlying (underlying assets, stocks, commodity etc.)

Features of Derivatives are :-

It is designed in a way to fulfill the requirement of the users
They can be designed and traded on the basis of the expectations regarding future price movement of underlying
They are off- balance sheet instrument
They are used as a device for reducing risks of fluctuations in asset values

Types of Financial Derivatives

Forward
Future
Option
Swaps

Types of Speculative Transactions

2009-01-22T03:30:00.000-08:00

1. Option Dealing for hedging

Options are used for hedging purpose to limit the loss in portfolio. Thus hedging is a device which protects against losses due to price fluctuation.

2. Wash Sales

It is a device by which a speculator is able to reap huge profits by creating misleading pictures in the market. Actually it’s a fictitious transaction in which member sells huge quantity and buy the same from other brokers.

3. Cornering

It refers to the process of holding the entire supply of a particular security by an individual or a group of individuals with a view to dictate the short-seller and earn profits by catching short seller.

4. Rigging the market

It refers to the process of creating an artificial condition in the market, whereby, the market value of a particular security is pushed up. It is due to strong Bull Run created by such members. They initially buy the securities in bulk at higher prices which shows picture like that the security is in Bull Run.

5. Blank Transfer

It facilitates speculative activities through carry-over or Badla transaction. When the transferor (Seller) simply signs the transfer form without specifying the name of the transferee (Buyer) is called blank transfer.

Types of Speculators

2009-01-20T05:16:00.000-08:00

1. Stags
These are those members who are neither but or sell securities in secondary market. They simply apply for subscription to new issues expecting to sell them at a higher price later when such issues are quoted on the stock exchange. They might sell security even before listing in GRAY market.

2. Wolves
These are those members who are very fast speculators and quickly perceives the trend of market. They trade in bulk and for small price difference.

3. Lame ducks
These are bear member who sell ultimately short by making wrong moves. Generally they sell securities without having it and hence caught in the wrong foot.

Kinds of Brokers

2009-01-19T05:24:00.000-08:00

Client Brokers
These brokers do simple broking business and works as an intermediary in case of buying or selling. They earn only brokerage.

Floor Brokers
It refers to those authorized clerks and sub-brokers who enter the trading floor and execute orders for their clients or members.

Jobbers/Taravaniwalas
These are those brokers who specialize in selected scrips. They buy or sell in bulk in selected scrips only. They earn profit through the margin between buying and selling rates.

Badla Financiers/Badliwalas
These are those members whose main function is to give finance for Badla transaction in specified scrips and earn interest for that finance. The interest is known as Badla rate. They also lend securities to brokers at the time of overselling.

Arbitragers
They are buying and selling securities simultaneously but in different market. (For Example :- Buy in BSE and sell in NSE). Thus they deal in inter-market transaction and earn difference in prices between different markets.

Bulls / Tejiwalas
These are those brokers who are having bullish view (means price is going to increase) on securities

Bears / Mandiwalas
These are those brokers who are having Bearish view (means price is going to decrease) on securities

Carry over or Badla Transaction

2009-01-16T22:40:00.000-08:00

It refers to postponement of the settlement of a transaction till the next settlement period. Its nothing but facility to carry forward the transaction from one settlement period to another.
It involves payment of some charges known as “BADLA CHARGES” by the speculator. Badla charges are fixed based on demand and supply conditions in the market.
To effect Badla transaction, two bargains have to be made.

First is to cancel out the original transaction by squaring it up. This cancellation is affected at making up price which is decided by exchange.
The second is to reopen the original bargain for next settlement period.

If Buyer has bought XYZ Co’s share in Febuary contract and wants to carry forward his position say to next month (March). So he has to first sell the same share in February contract before the expiry date and second he has to create fresh buying (Long) position in March contract.
If Seller has sold ABC Co’s share in Febuary contract and wants to carry forward his position say to next month (March). So he has to first buy the same share in February contract before the expiry date and second he has to create fresh selling (Short) position in March contract

Short Selling

2009-01-16T03:02:00.000-08:00

Short selling means selling of securities without owning it.

For spot market, when one short sell shares he has to repurchase the same before the end of trading session. In case if one fails to repurchase the shares then he has to pay penalty of 20% of price of the share calculated on the highest price of the next three trading days.

For Example if one has sold GSPL for Rs. 105 on Monday and unable to repurchase before closing of market on that day. For Tuesday and Wednesday highest price of GSPL is 108, 103. Then one has to pay auction penalty equals to 108*0.20 = Rs. 21.6 per share.

- Short selling is allowed in future market or carry over market. Here the short seller can keep his position open till the end of contract. Anytime during the expiry he can repurchase shares. In case if in the same expiry, he want get his expected price, he might carry his trade forward to next contract and will be allowed to wait till the next expiry.

Margin Trading

2009-01-13T05:12:00.000-08:00

Margin trading is carried on by the clients with borrowed fund from their brokers. It is a popular method of speculative trading.

Under this method, client opens account with brokers and deposits cash or securities in this account. He agrees to keep minimum amount with the broker. Then he can give order to buy or sell securities for more amounts then what he has deposited.

In case it falls short of the minimum agreed amount, the client has to deposit further securities into his account. If client fails to do so then his securities are sold out by the brokers after informing to client.

If the market is favorable, then client may sell his shares and book profit. When such securities are sold, his account will be credited.

Types of transaction

2009-01-12T05:00:00.000-08:00

There are certain types of transactions, which are allowed on the stock exchanges.

Transactions for Spot delivery :- The delivery and payment is effected within the time or on the date stipulated when entering into the transaction or within fourteen days, whichever is shorter.
Transaction for Hand delivery :- These transactions also referred to as the transaction for "the account", are cleared and settled through the clearing house.
Transactions for special delivery :- The delivery and payment is effected within any time exceeding fourteen days following the date of the contact as may be stipulated when entering into the transaction, provided the same is permitted by the governing board or the president of the exchange.
Transaction for Clearing settlement delivery :- Under this method, the transactions are cleared and settled through the clearing house. Usually those securities are frequently traded and are usually in demand are cleared through the clearing house.

Types of Order

2009-01-11T01:24:00.000-08:00

There are various types of orders, which can be placed by the buyer or seller. They are:

Market Order :- A market order is to be executed as soon as possible at the best prevailing price in the market.
Limit order :- A limit order is constrained by the price limits specified by the investor. The seller specifies the minimum price that the security must fetch, and the buyer specifies the maximum price that he is willing to pay.
Day order :- A day order remains valid only for the day when it is placed. If the order is not executed on that day, it automatically lapses.
Week order :- A week order is one, which is active for a week
Month order :- A month order is an order, which is valid for one month.
Open order :- An open order remains in effect until it is executed or cancelled. It is also known as Good Till Cancel (GTC) order.

Some modern types of orders are:

Immediate Or Cancel (IOC) order :- When trader enters order with this option and a part of which trades then immediately the remaining part gets cancelled. For Example IOC buy order for 400 shares of XYZ co. ltd. is entered in system and will get 250 shares immediately then remaining order for 150 gets cancelled.
All Or None (AON) order :- In this case, wither all the orders entered by trades execute or None of the order executes. For trading purpose AON order executes only when other opposites AON order is matched.
Good Till Date (GTD) order :- This order remains in effect until the specific date.
Stop Loss order :- In order to sell as soon as price falls below particular level or to buy when the price rises up to a specific level. This is mainly to protect clients against heavy fall or rise so as to limit the amount of loss. Such orders required one more price known as “trigger price” at which it enters into ORDER BOOK.

Types of Shares by Group

2009-01-10T05:57:00.000-08:00

1. GROUP "A" SHARES

These are referred to as “Cleaned Securities” or “Specified shares". The facility for carrying forward a transaction from one account period to another is available for these shares. Group "A" shares represent companies, with huge amount of capital, and equally a large scope for investment. These shares are frequently traded and command higher price earning multiples.

2. GROUP "B" SHARES

These are referred to as “Non cleaned securities” or “Non-specified shares”. For these groups facility of carrying forward is not available. Whenever a share is moved from Group "B" to Group "A" its market price rises; likewise, when a share is shifted from Group "A" to Group "B", its market price declines. There are some criteria and guide lines, laid down by stock exchange, for shifting stocks from the non-specified list to the specified list.

3. GROUP “C” SHARES

Under group “C”, only odd lots and permitted securities are included. A number of shares that are less then the market lot are known as odd lots. Old lots have settlement once in a fortnight.

SENSEX & the NIFTY Index

2009-01-09T03:39:00.000-08:00

The Sensex and Nifty are an "index".
So before you go to understanding Sensex & the Nifty you needs to understand Index.

An Index is a comprehensive measure of market trends, intended for investors who are concerned with general stock market price movements. An Index comprises stocks that have large liquidity and market capitalization. Each stock is given a weighted in the Index equivalent to its market capitalization. At the NSE, the capitalization of NIFTY (fifty selected stocks) is taken as a base capitalization, with the value set at 1000. Similarly, BSE Sensitive Index or Sensex comprises 30 selected stocks. The Index value compares the day's market capitalization vis-à-vis base capitalization and indicates how prices in general have moved over a period of time.

The Sensex is an index of all the major companies of the BSE.

The Nifty is an index of all the major companies of the NSE. Just like the Sensex represents the top stocks of the BSE, the Nifty represents the top stocks of the NSE.

The BSE is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the two major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but BSE and the NSE are the most popular. Most of the stock trading in the India is done though the BSE & the NSE.

Besides Sensex and the Nifty there are many other indexes. BSE Mid-cap Index, BSE Small-cap Index, Index by industries like IT, FMCG, Power, Infrastructure, Metal, Automobile, are few of the examples of other Index.

Satyam Today

2009-01-07T04:53:00.000-08:00

Do you know meaning of Satyam?
Satyam = Truth. & What Satyam Done!!

Today, Satyam Computer Services's chairman and founder B Ramalinga Raju admit to fraud and blatant manipulation of accounts. After this news satyam stock fell to Rs.39.95 from Rs.179 of previous close. that shows 77% of decline. at one time it was trading at Rs.30.70. Its todays close is about one third of 52 week low!! Everybodu socked with data given by Mr. Raju. Check the letter of raju here Letter of Raju (To Satyam Board, SEBI & SE)

After this issue SEBI indicate that Satyam may be removed from BSE, NSE.

As an step, Satyam appoint Ram Mynampati to Satyam's interim CEO. He wrote an impassioned letter to all the employees to the company, asking them to stand together in these turbulent times. Also Satyam disclose that Satyam will call press conferance in 24 Hrs. and the bord meeting of 10-Jan will be held without change.

As a result of the event the BSE and NSE Index fall about 7% today.

Hopping for some good outcome after this issue!

Letter of Raju (To Satyam Board, SEBI & SE)

2009-01-07T04:31:00.000-08:00

Following is the text of the letter Raju wrote to the Satyam board and Copy to SEBI and Stock Exchanges.

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Dear Board Members,

It is with deep regret and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice:

1. The Balance Sheet carries as of September 30, 2008,
a) Inflated (non-existent) cash and bank balances of
Rs 5,040 crore (as against Rs 5,361 crore reflected in the books);
b) An accrued interest of Rs 376 crore, which is non-existent
c) An understated liability of Rs 1,230 crore on account of funds arranged by me;
d) An overstated debtors' position of Rs 490 crore (as against Rs 2,651 reflected in the books);

2. For the September quarter(Q2) we reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore(24 per cent of revenue) as against the actual revenues of Rs 2,112 crore and an actual operating margin of Rs 61 crore (3 per cent of revenues). This has resulted in artificial cash and bank balances going up by Rs 588 crore in Q2 alone.

The gap in the balance sheet has arisen purely on account of inflated profits over several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance). What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of the company operations grew significantly (annualised revenue run rate of Rs 11,276 crore in the September quarter, 2008, and official reserves of Rs 8,392 crore). The differential in the real profits and the one reflected in the books was further accentuated by the fact that the company had to carry additional resources and assets to justify a higher level of operations thereby significantly increasing the costs.

Every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in the takeover, thereby exposing the gap. It was like riding a tiger, not knowing how to get off without being eaten.

The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas' investors were convinced that this is a good divestment opportunity and a strategic fit. One Satyam's problem was solved, it was hoped that Maytas' payments can be delayed. But that was not to be. What followed in the last several days is common knowledge.

I would like the board to know:

That neither myself, nor the Managing Director (including our spouses) sold any shares in the last eight years - excepting for a small proportion declared and sold for philanthropic purposes.
That in the last two years a net amount of Rs 1,230 crore was arranged to Satyam (not reflected in the books of Satyam) to keep the operations going by resorting to pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances (statement enclosed only to the members of the board). Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving and to ensure prompt payment of salaries to the associates. The last straw was the selling of most of the pledged shares by the lenders on account of margin triggers.
That neither me nor the managing director took even one rupee/dollar from the company and have not benefited in financial terms on account of the inflated results.
None of the board members, past or present, had any knowledge of the situation in which the company is placed. Even business leaders and senior executives in the company, such as, Ram Mynampati, Subu D, T R Anand, Keshab Panda, Virender Agarwal, A S Murthy, Hari T, S V Krishnan, Vijay Prasad, Manish Mehta, Murli V, Shriram Papani, Kiran Kavale, Joe Lagioia, Ravindra Penumetsa, Jayaraman and Prabhakar Gupta are unaware of the real situation as against the books of accounts. None of my or managing directors' immediate or extended family members has any idea about these issues.

Having put these facts before you, I leave it to the wisdom of the board to take the matters forward. However, I am also taking the liberty to recommend the following steps:

A task force has been formed in the last few days to address the situation arising out of the failed Maytas acquisition attempt. This consists of some of the most accomplished leaders of Satyam: Subu D, T.R. Anand, Keshab Panda and Virendra Agarwal, representing business functions, and A S Murthy, Hari T and Murali V representing support functions. I suggest that Ram Mynampati be made the chairman of this Task Force to immediately address some of the operational matters on hand. Ram can also act as an interim CEO reporting to the board.
Merrill Lynch can be entrusted with the task of quickly exploring some merger opportunities.
You may have a 'restatement of accounts' prepared by the auditors in light of the facts that I have placed before you.

I have promoted and have been associated with Satyam for well over 20 years now. I have seen it grow from few people to 53,000 people, with 185 Fortune 500 companies as customers and operations in 66 countries. Satyam has established an excellent leadership and competency base at all levels. I sincerely apologise to all Satyamites and stakeholders, who have made Satyam a special organisation, for the current situation. I am confident they will stand by the company in this hour of crisis.

In light of the above, I fervently appeal to the board to hold together to take some important steps. TR Prasad is well placed to mobilise a support from the government at this crucial time.

With the hope that members of the Task Force and the financial advisor, Merrill Lynch (now Bank of America), will stand by the company at this crucial hour, I am marking copies of the statement to them as well.

Under the circumstances, I am tendering the resignation as the chairman of Satyam and shall continue in this position only till such time the current board is expanded. My continuance is just to ensure enhancement of the board over the next several days or as early as possible.

I am now prepared to subject myself to the laws of the land and face the consequences thereof.

(B Ramalinga Raju)

Copies marked to:
1. Chairman SEBI
2. Stock Exchanges....

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Note that : - The text is received form news portal and may not verified.