“Blue chip” stocks are shares of large and established companies with a long operating history and an established client base. Usually, they have substantial market capitalisation and a history of…
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Exotic currency pairs combine one major currency with the currency of an emerging or smaller economy. Some common exotic forex pairs examples are: USD/INR: U.S. Dollar / Indian Rupee USD/TRY:…
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Option Greeks are used to assess how an option's price may respond to changes in factors such as the: Underlying asset price Time remaining until expiry, and Volatility. As per…
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A “covered call” is an options strategy in which an investor: Owns shares of a stock and Sells a call option on those shares. The investor receives the option premium…
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A pip is a standard unit used to measure a change in the exchange rate of a currency pair. For most currency pairs, 1 pip is the fourth decimal place.…
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A put option gives the buyer the right, but not the obligation, to “sell” the underlying asset at a predetermined strike price on or before expiry. For example, suppose a…
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Delivery trading refers to buying shares with the intention of holding them beyond the trading day. Usually, the purchased shares are settled and credited to the investor's demat account. Currently,…
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Delta measures how much an option's premium is expected to change when the price of the underlying asset changes by one unit (assuming other factors remain unchanged). Several traders use…
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Hedging is the technique of opening a “strategic position” to reduce the risk from another position or exposure. To understand the concept better, let’s study an example related to a…
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The option premium is the price paid by the buyer to purchase an options contract. It is also the amount received by the option seller when the option is sold.…
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Accelerator What’s an Accelerator? An accelerator is a fixed-term program designed to help early-stage startups and growing businesses accelerate their growth by offering them resources such as mentoring, capital, guidance,…
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Accelerator What’s an Accelerator? An accelerator is a fixed-term program designed to help early-stage startups and growing businesses accelerate their growth by offering them resources such as mentoring, capital, guidance,…
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Major currency pairs are the most “actively traded” forex pairs. Primarily, they include the U.S. dollar (USD) and one of the other major currencies. As per general industry understanding, some…
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Minor currency pairs (also called “cross-currency” pairs) are a type of currency pair that do not include the U.S. dollar. They usually involve currencies such as the Euro, British pound,…
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A circuit breaker is a market-safety process that “temporarily halts or restricts” trading when a stock or market index moves beyond a predetermined limit during a trading session. The purpose…
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A call option gives the buyer the right, but not the obligation, to “buy” the underlying asset at a predetermined strike price on or before expiry. For example, suppose a…
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A “carry trade” (or carry trade interest rate strategy) is a technique in which a trader seeks to benefit from a difference in interest rates between two currencies. The basic…
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A currency pair shows the exchange rate between two currencies. It shows how much of one currency is needed to buy one unit of another currency. Note that a currency…
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A Demat account is used to hold securities in electronic form. "Demat" is short for dematerialised, which represents that physical securities are held electronically instead of as “paper certificates”. When…
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A forex market session refers to a period when the major financial centres in a particular region are active in the foreign exchange market. The commonly recognised forex sessions and…
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“Forex scalping” is a trading approach/ style in which traders try to take advantage of minor price movements. Usually, they hold positions for ultra-short periods (from a few seconds to…
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A futures contract is a standardised agreement to buy or sell an underlying asset at a “predetermined price” on a specified future date. Generally, futures contracts are traded on an…
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A margin call occurs when a trader's account no longer has enough available equity to meet the broker's required margin level. To better understand how does margin work in trading,…
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Rollover is the process of carrying an open forex position from one trading day to the next. When a position remains open after the broker's daily rollover time, the broker…
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A stop-loss is an instruction placed with the broker to automatically close the trade at a pre-determined price. Usually, this price is less favourable to the trader. For example, A…
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USD/INR is a currency pair that represents the exchange rate between the U.S. dollar (USD) and the Indian rupee (INR). In this pair, USD is the base currency, and INR…
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An IPO (Initial Public Offering) is the process through which a company offers its shares to the public for the “first time” and gets its shares listed on a stock…
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An options contract gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a “predetermined price”. This right can be exercised within or…
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In Bank Nifty options trading, you buy or sell call (CE) and put (PE) options based on the Nifty Bank index. These index options are traded on NSE and are…
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Commodity trading in India refers to buying and selling commodity-based futures contracts (derivatives) through recognised commodity exchanges, such as Multi-Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange…
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Crude oil trading in India refers to buying and selling “crude-oil derivative contracts” on commodity exchanges, such as Multi-Commodity Exchange (MCX). These contracts allow market participants to take positions based…
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F&O lot size in NSE is the fixed number of units of an underlying asset contained in one futures or options contract traded on the NSE. For example, Suppose an…
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“Forex” stands for “foreign exchange”. Forex trading is the process of buying one currency and selling another currency simultaneously. Such a trading take place in “pairs” where one currency is…
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Gold trading in India refers to buying and selling “gold-related” financial contracts (instead of physical gold). In India, investors and traders can trade gold through commodity derivatives (via gold futures…
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Implied volatility (IV) represents the market's expectation of how much the underlying asset may fluctuate over a period. Its effect is reflected in the current option price. As per general…
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Intraday trading is the process of buying and selling a security within the “same” trading day (without carrying the position to the next trading day). For example, Suppose an investor…
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KYC (Know Your Customer) is the process through which a financial institution verifies a customer's identity and other required details before providing financial services. As per SEBI guidelines, KYC is…
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Leverage in forex trading allows a trader to control a position that is larger than the amount of capital set aside as margin. For example, With “10:1” leverage, a trader…
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Lot size in forex refers to the amount of currency represented by a forex trade. As per general industry understanding, some common lot sizes in forex are: Lot TypeUnits of…
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Margin is the amount of money a trader must set aside with a broker to open and maintain a leveraged forex position. For example, Suppose a trader opens a ₹100,000…
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Market capitalisation (or market cap) is the total market value of a company's outstanding equity shares. Mathematically, it is calculated using the following formula: Market Capitalisation = Current Share Price…
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MCX trading refers to buying and selling commodity derivative contracts listed on the Multi-Commodity Exchange of India (MCX). The exchange provides contracts linked to commodities such as gold, silver, crude…
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MTF (Margin Trading Facility) allows investors to buy shares by paying only a portion of the total purchase value, while the broker funds the remaining amount. For example, Suppose an…
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NIFTY 50 is a stock market index of the National Stock Exchange of India (NSE). It tracks the performance of the 50 largest companies (in terms of full market capitalisation)…
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Open Interest (OI) is the total number of outstanding options contracts that have not been closed, exercised, or expired. For example, Suppose 1,000 new option contracts are created and remain…
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Option chain analysis is the study of available call and put options across different strike prices and expiry dates. An option chain usually shows information, such as: Open interest Change…
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SEBI (Securities and Exchange Board of India) is the “statutory regulator” of India's securities market. Primarily, it regulates market intermediaries (such as stockbrokers and mutual funds) and works toward investor…
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SENSEX (or Sensitive Index) is the benchmark stock market index of BSE (BSE Ltd.). It tracks the 30 largest, established, and financially sound companies listed on BSE, subject to the…
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Silver trading in India involves buying and selling silver through financial instruments such as futures and options on commodity exchanges, such as Multi-Commodity Exchange (MCX). On MCX, silver contracts derive…
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Spot trading involves buying or selling an asset at its “current market price” (CMP). In contrast, in futures trading, a “futures contract" is traded to buy or sell an underlying…
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The spread is the difference between the bid price and the ask price of a currency pair. For example, Suppose the bid price is 1.1050 and the ask price is…
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STT (Securities Transaction Tax) in India is a “direct tax” imposed on the purchase and sale of securities, such as: Stocks/ Equity shares Derivatives, and Mutual fund units STT was…
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Swap (or swap charges) in forex trading are the overnight/ rollover fees you “pay” or “earn” for keeping a position open overnight. It happens because every forex trade involves two…
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A “take-profit” is an instruction placed with a broker to automatically close the trade when the price reaches the “target profit”. For example, Suppose a trader buys EUR/USD at 1.1000.…
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The bid price is the price at which a trader can sell the base currency. In contrast, the ask price is the price at which a trader can buy the…
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An iron condor is an options strategy that combines four different options contracts. These are “two call options + two put options” with different strike prices but the same expiry.…
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NSE (National Stock Exchange of India) is a stock exchange where securities such as equity shares, equity derivatives, ETFs, and other permitted assets are traded. NSE began operations in the…
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The options expiry date is the date on which an options contract reaches the end of its validity. After expiry, the contract is settled according to the exchange's rules, and…
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A straddle involves buying or selling a call option and a put option with the same strike price and expiry on the same underlying asset. Generally, a straddle is of…
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The strike price is the predetermined price at which the buyer of an option has the right to buy or sell the underlying asset (depending on whether it is a…
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Theta measures the effect of the passage of time on an option's premium. It is commonly associated with “time decay”. As an option approaches expiry, the time available for a…
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Zero brokerage indicates that a broker does not charge a “brokerage fee” from its registered users. This benefit may apply to a specific market segment or extend across all segments.…
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