Smart traders question everything

An important step towards becoming a smart investor is your ability to question almost everything. When you get a hot tip in the market, question its logic. When your broker gives a buy or sell call, learn to question it. When you read the latest news on a company, ask how it can impact you. Also, when you expect prices to go up and they don’t, question yourself, if you are missing out on a message from the market.

More you question, more you get

We have all heard of the proverbial herd mentality in markets. Most people tend to follow others when they find them making profits on trades. It does not matter that you do not understand anything about the stock. It also does not matter that the stock is priced at a ridiculously high P/E ratio. It also does not matter that you never made money by jumping on the bandwagon. Welcome to herds! Continue reading

Did you strangle?

The market was ripe for strangles; it probably still is…

First let me enlighten what I am referring to by a strangle. In options trading, when you are not sure of the market direction, you can buy a call option as well as a put option. The result will be that you make money, no matter the markets go up or down. So, a Strangle is that simple really?

Not exactly that simple, though…

A strangle involves buying a higher call option and a lower put option at the same time. If the stock goes up you make money on the call; if the stock goes down you make money on the put. Continue reading

Infosys is changing – Turbulent present, but a decisive future…

If one were to look at the below-expectation revenues and profits of Infosys, it would be a disappointment. The dollar guidance at 10-12% may give some room for comfort. But both these numbers can be misleading. The real reason to celebrate is that Infosys has started to change; and that too decisively.

Use up the cash, smartly… Continue reading

Get the power of online trading

Online trading has redefined the contours of broking in more ways than one. It has brought about transparency in an otherwise opaque industry. It has made the entire order chain from order placement to confirmation to demat credit absolutely seamless. But above all it has empowered the retail investor like never before. With information and action at the tips of her fingers, online is a natural choice. Continue reading

Trade Deficit Worry

Why India should be seriously worried…

India’s trade deficit numbers are out and there is room for some real concern. The overall exports for the year were $310 billion and the imports were $448 billion, leaving a trade deficit of $138 billion. That approximately translates into a trade deficit of $11.5 billion per month. But the real story lies in the break-up of these numbers. Continue reading

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