Simply put, liquidity is all about how quickly a trader can buy
or sell something without causing a significant price movement. A liquid market
is one with ready, active buyers and sellers at all times.Here’s another, more mathematically elegant way to think about
it: Liquidity refers to the probability that the next trade will be executed at
a price equal to the last one.Stock markets are generally more liquid than their related
options markets for a simple reason: Stock traders are all trading just one
stock, but the option traders may have dozens of option contracts to choose
from. Stock traders will flock to just one form of DLF stock, for example, but
options traders for DLF have perhaps six different expirations and a plethora
of strike prices to choose from. More choices by definition means the options
market will probably not be as liquid as the stock market.Of course,
Tuesday 25 February 2014
Tuesday 18 February 2014
Friday 14 February 2014
BOOK PROFIT IN TATASTEEL STRANGLE STRATEGY
Tatasteel 360 put given @ 3.5 ,book profit near 8…
Total
profit=(8-6.5)*1000=1500…
Hope
you have booked profit in strategy.
Tuesday 11 February 2014
TATASTEEL STRANGLE STRATEGY
Buy Tatasteel 420 call @ 3
Buy Tatasteel 360 put @ 3.5
COST =6.5
RISK PER LOT = 6500
RETURN = UNLIMITED
UPPER BREAK GIVEN POINT=426.5
LOWER BREAK GIVEN POINT=353.5
Pay off table:...
Thursday 6 February 2014
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Wednesday 5 February 2014
PUT CALL RATIO
The put-call ratio is a popular tool specifically designed to help
individual investors gauge the overall sentiment of the market. The ratio is calculated by
dividing the number of traded put options by the number of traded call options. As this ratio increases, it can be
interpreted to mean that investors are putting their money into put options
rather than call options. An increase in traded put options signals that
investors are either starting to speculate that the market will move lower, or
starting to hedge their portfolios in case of a sell-off.
An increasing ratio is a clear indication that investors are starting to move toward instruments that gain when prices decline rather than when they rise. Since the number of call options is found in the denominator of the ratio, a reduction in the number of traded calls will result in an increase in the value of the ratio. This is significant because the market is indicating that it is starting to dampen its bullish outlook. ,.....
An increasing ratio is a clear indication that investors are starting to move toward instruments that gain when prices decline rather than when they rise. Since the number of call options is found in the denominator of the ratio, a reduction in the number of traded calls will result in an increase in the value of the ratio. This is significant because the market is indicating that it is starting to dampen its bullish outlook. ,.....
Saturday 1 February 2014
HOW TO CHOOSE A STOCK BROKER
A stock broker is a person who takes care of your
investments and act as a mediator by selling and buying the shares/stocks you
want. Whenever you want to buy or sell your stocks you have to put it in front
of a stockbroker and hence, from there on the stockbroker takes care of the
matter by following your order and placing them in the market.....
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