Stock Futures are basic financial contract with individual stock as an underlying asset. Stock future contract is an agreement made to either sell or buy and specified quantity of equity share for a future date but at a price that has been agreed upon by both the buyer and the seller. These contracts do have standard specifications such as expiry day, market lot, tick size, unit of price, method of settlement etc. the theoretical price of the stocks meant for a future contract is the sum of current spot price and the cost of carry.
The actual price of future contract depends on the demand and supply of the underlying stock in equity trading. Cost of carry is the interest of such a position in the cash market that has been carried to the maturity of the future less dividends that are expected until the expiry of the contract.
When someone buys or sells a stock future, they are not selling or buying a stock certificate but are entering a stock futures contract which is an agreement to buy or sell the stock certificate at an agreed fixed price at a certain date. This type of derivatives trading is different from traditional stock purchase as people don′t own the stock and are not entitled for dividends, also with stock market future one could actually make money even when the market is down.
Whether you are an individual or a corporate body planning your investments ahead is of at most importance. As planning your investments means planning your future financial status and meeting unforeseen with ease and confidence it has become life blood that makes your path of hardships a bed of roses. Planning your finances involve planning your inflows and outflows i.e., In short managing the entire flow of funds during a certain course of time.
Thus, it is a must for anyone to plan your investments well in hand so; that your future will be safe and you can encounter any issue with ease and comfort. A proper investment planning would make your financial distress also a bliss as you always have a surplus reserve for different unforeseen of life. The reasons for financial distress could be multitudinous but the survival rate is higher and quicker for those who are financially planned when compared to those who are not. For having a proper investment planning you must follow few but regular steps which will save you at the eleventh hour. Let us look at few steps that you must follow to cushion yourself financially and to get a tag of well investment planner.
• The first and foremost step in investment planning is to assess your income. Asses all your inflows, which must include any sort of long term or annual cash inflows that you are expecting.
• Once you assessed your cash inflows, the next major step is to set a goal that could be any specific aspect that you would like to achieve with the money you are going to save from this year onwards.
• Once you set forth your goals and assess your inflows the next step is to plan your savings. The other way planning your investments. To plan your investments well you must know what your risk coefficient is and how much profits you want to make out of your little investments. To know this you must look at variety of financial and demographic and socio- economic factors that affect you and your family’s lifestyle.
• Once you are done with the assessment of your risk coefficients and return expectations the next big leap is to set an investment strategy. Under this, you will choose among different investment alternatives that are available to you based on your risk and profit margins.
• Once you choose a basket of investment options, go with the ones that are convenient for you in terms of time horizon, maturity period and return margins and so on. Having a clear investment strategy would not only make you a good investment planner but also a super saver to your own self and to your family at times of emergencies.
You must adjust your outflows i.e., investments as per your inflows and make a reserve to meet uncertainties’ as well as to have a comfortable life during retirement if you are an individual and to have long term sustenance if you are a corporate entity.
Trading and investing into the financial markets has never been more popular. More and more people are starting to see the benefits of taking a little time to, first invest in themselves through a trading and investing education, but also using that knowledge on the financial markets.
Whilst traders may take quicker positions and investor will most likely be holding positions for much longer, perhaps months or even years. So, if you fancy investing into the financial markets successfully, and profit from companies you already know about like Google, Facebook or Microsoft, then these are the ten essential things that an investor must do and know before they start. Let’s take a look…
1. What are your goals?
2. Start early for compound interest.
3. Every little helps.
5. Educate yourself.
6. Have practical expectations.
7. But don’t limit yourself.
8. Manage your risk.
9. Review constantly.
10. Have fun!
Sounds simple but most people forget that are best work comes from when we enjoy the process. Whilst investing is a serious process you are allowed to enjoy it too. In fact the buzz of finding an opportunity, researching it, investing into it and then seeing the result is exciting in itself.
There you have it ten essential tips for successful investing.
Investing in the stock market is one of the fastest ways to maximize your returns. However, this form of investment also comes with a high level of risk. While it is common for investors to grow rich overnight with stock market investments, it is equally common to lose a lot of money in the stock market.
So then how can one leverage this investment choice without taking on too many risks? Here are a few guidelines that can help you to make the right stock market investments at the right time.
For investors, doing background research on which companies to invest in is the key to building profits. It has been observed that first-time investors usually invest in big companies as it is considered a safer option. You can also look deeper and focus on the companies of tomorrow but you should know how to identify them. This is where background research comes in handy. You need to understand industry trends to make the most of your stock investments.
To enjoy best returns it is advisable to invest in good companies. You can determine a company’s quality by its financial health and track record with customers and investors alike. For you to keep earning returns the company should continue to perform well in the future too.
It’s All About Timing
For success in the stock market, it is very important to invest at the right time. Making timely decisions to buy and sell stocks is the key to earning big returns.
Let Your Portfolio Evolve
Over a period of time, as companies change their strategies, you should also allow your portfolio to evolve. It is better to spread investments over a diversified portfolio to reduce risks. This is a common strategy investors use for long-term success. Never put all your eggs in one basket is indeed the golden rule for stock market investment.
Reinvest To Multiply Your Profits
One good strategy is to re-invest the profits earned from previous investments. This concept is called ‘Compounding’. As you re-invest the base of your investment grows and thus returns are higher. If you are a proactive investor and you are reinvesting profits earned then there are good chances your returns will be very good in the long-term.
Equity benchmarks fell sharply on Friday, with the Nifty closing tad below psychological 9,200-mark amid geopolitical tensions after the US military launched cruise missiles against a Syrian airfield. However, the rupee outperformed equities, gaining past 64.50 against the US dollar.
The 30-share BSE Sensex slipped 220.73 points to 29,706.61 and the 50-share NSE Nifty dropped 63.65 points to 9,198.30, weighed by pharma, energy and FMCG stocks.
Experts feel the market may consolidate further next week after pricing in Syria missile strike news and start focussing on March quarter earnings that will be kicked off by Infosys on April 13.
“If this geo-political tension escalates further, Nifty may retrace to 9100 in the near future but it will not change the prevailing up trend,” Jayant Manglik of Religare Securities says.
He advises traders to maintain positive yet caution approach and keep a close eye on world markets for further cues.
Studying closely the trend of a portfolio of a given share helps to reveal the financial health of that stock and the traders get a fair idea of whether is it safe to invest in it or not. Studying the bearish and bullish nature of a stock portfolio unveils the nature of that stock.
Studying the trend of a share has been one of the crucial cruxes for all the stock option advisory services. The better and more efficient the companies are at it, the better loyal traders they have. Evaluating a share and informing the traders of the suggestive steps they might take undertake for an efficient trade is the key to success. The success ratio of the win trades that are being carried out also reflects the share market advisory company’s prudent knowledge of the stocks.
One of the important aspects of reaping stable returns on the investment of the shares knows the inside out history of a stock. If a stock has a rock solid stellar performance in the past then that particular stock is sure to give beneficial results in the future as well. And on the contrary it gives a vise-vers result! Hence it is acutely important to know a share before diving into investing in one.
Therefore, implying the techniques trusted by many in the stock market business sure does help to reap stable returns on the investment without having to worry about the volatility of the stock markets. It is best advisable to follow the techniques that work best for the traders and not follow the herd mentality to earn good profits.