Wednesday, 7 November 2012

My Short selling Experience by Abdul Zelani

Another horrible experience....BAD.. Bad...... muhhhhhhhhhhhh!

Rather than seeing it as a loss i ‘ll say good experience with small loss

Today  I shorted 8 shares of INFY @2401 at around 11 am. And with in two hours it went down to 2390 and then i bought(Short cover)  4 shares at this price..and i was thought it will go to lower than this so at 2.40 pm I made bid of 2385 for remaining 4 and I thougt it will definetly touch this prices and will be traded and then I attended 3-4 and 4-5 classes.. I got a SMS that 4 shares were traded and i thought 8 shares were coverd ...but not,I have was the previous trade SMS
And here comes..I got a horrible mail from Mumbai head office that 6 shares were bought  in auction at 2400 and a penalty of 2% i.e  200 rs + 0.2% intrest very day for 4 days (because i bought it on margin)and some other unknown charges... so totally i lost Rs 242 due to my memory power and 3-4 PEP Class.and next i have called to My broker and shouted and regret for my mistake and then he talked for 20 min and here is what he said in brief..

When you sold short (seller shortage) those shares there was someone on the other side who bought them. He won't get delivery. So your broker will try to purchase them in a buy-in auction market on T+2 day and the settlement of the auction shall be done on T+3 day (where T is the transaction day, holidays are not included).

If the auction is successful the defaulting client (you) will have to pay the actual auction price + interest + a penalty of 2%.

What will be the auction price - That depends on the price of the stock on auction day. The lowest or minimum offer price in auction can be 20% below the closing price on a day prior to the day of auction. If it's lower then you might gain but this difference is not given to you it goes to Investor Protection Fund, if it's higher you will have to pay the difference. Your broker will send you an email at the end of day with the detailed information.

If the auction is not successful, no one is ready to sell in the auction (generally happens when the stock hits upper circuit), the sell transaction is cancelled by the exchange and the defaulting member has to pay the highest price prevailing from the day of trading up to a day prior to the auction day or 20% above the official closing price on the day prior to auction day, whichever is higher. The buyer of those shares gets a full refund. Auction is carried out in case of Short deliveries and Bad deliveries.

My recommendations..

1)      If you are utilising or buying Scrips on Margin then be very carefulll.don’t utilise your full margin limit it’s very danger if you are amateur in Capital Market
2)      Check your order status at 3.15 pm be sure that it was not still open and sell it at current market price don’t try to bargain or don’t Use Bid Ask spread techniques
3)     REMEMBER! While you are Short selling you have to Sell and Buy on the same Exchange if You accidently buy them on BSE while you sold them on NSE it will not be covered because there were no depository in this situation
Ignore Spelling and Grammar mistakes...
Indeed it was technical to understand,it took me 2 days to understand this whole concept.if you have any dought Please give me feedback or any extra information about this topic ....please feel free to say any thing will help me to improve my skills in In upcoming blogs...
you can mail me personally

Official Pages:

Abdul Zelani,
Lovely Professional University.

Friday, 26 October 2012

Costs Involved in In stock market investments

Costs Involved in In stock market: As per Oct,2012

My first shocking Experience,
It was my first day in MBA IIIrd  Semester , the faculty  polished our Brain By saying to achieve something. I still remember that class when My SAPM Proff Atin Garg asked “what do you want to become” I just replied Portfolio manager and I don’t know much about that and then he said, do some thing extra in life …. Gain practical knowledge,“Kal subah Janta puchegi,Maa Baap Puchenge, dost puchengy” kya bhai Placement huui yani? What will you say?. On that day I decided to open a real account so that I can become temporary Portfolio manager.

I went to kotak Securities and asked to open a account and then he asked
1) PAN(Permanent Account Number)
2)Savings Bank Account With Cheque Book
3)Adress Proof

It was Aug 18 when I received My trading Account KIT,then I started  to Trade with 5,000 Rs At that time I was just Knowing the Commision of 0.25% over total turnover for Delivery and 0.025% Intraday.

By the blessings of God,The Economic Reforms Part II was releasd, KFA rose from 8 rs per share to 17 rs within 16 days and SAIL,GVKPIL,GMR,SUZLON,BHARTIARTL,RENUKA almost every SCRIP was Up and I made more than  20% return over 5000 in just 45 days…

And then came October, on that day I really realized my real profit by deducting the hidden charges

1)STT(Security Transaction Tax) mandatory_ 0.1% for Buying and 0.1% for selling(it changed to 0.001% in FY13-14 BUDGET)
2)Brokerage:0.25% on Buying and 0.25% on selling(depends on Broker)
3)Service tax on brokerage 12.36% for buying and  12.36 % on selling
4)Stamp Duty : According to scrip but ‘ll be in Rupees only(very less)
5)Depository charges:There is no charge if any scrip is credited in your DEMAT account but they will charge 30Rs + 0.1% total value of  debiting Scrips
6)Annual Maintenance Charges(AMC):600 Rs per Annum.
7)Short term Capital Gain Tax if sold with profit with in 365 days 15% of total Profit...
8)No Long Term Capital Gain Tax if you hold more than 365 days.

In India There are Two depositories NSDL(NAtinal Securities Depository Ltd) and (CDSL) Central Depository Of secutities Ltd…… NSDL is for NSE and CDSL is for BSE Trades…. The charges are subject to Kotak brokerage and NSE,CDSL…it will differ if you trade from others  

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i.e if you bought a share of 80rs then you have to sell it above 81 rs then only you will get may gain 10% on you share from buying ..but when the real profit comes to your account you 'll be shocked to see These deductions.

What is Margin?
Margin is the liquidity which your broker will provide.

Suppose You thought ITC share Price will Rise by 10 rs to 310 rs tomorrow.and you have 3000 rs in your trading Account.but you have balance to buy 10 shares only.Then what you do is Utilize the Margin Provided by your broker.(Margin utilization for Every stock is different if it is good stock then you may utilse 80% levarage .if it is volatile and Bad stock then you will get 0% levarage to buy that share) ITC is a good and less volatile share so you will get 80% leverage to buy this stock.So finally you can buy 50 shares(50*300=15000).This is because you have balance of 3000 rs which is 20% of 15,000 rs.But you have obligation to Pay that 80% margin with in 2 days..else intrest will be charged.Suppose the ITC gone down by 10% then you will get a margin calll to clear the balance else they will sell the shares and reedem the amount.

If you are learner, start trading with not less than or more than Rs 5000/- and when you gain knowledge trade with a minimum of 50,000
2) Utilize the margin Given by your trader in Intraday transactions....why i am saying Intraday becz The brokerage 
'll be 90 times less and there will be no DP(Depository Charges) because there is no delivery.....

I am poor at english so if any gramatic error or spelling mistake found Please let me know by commenting on this blog

if you don't feel comfort please mail your comment here:(;

For National and International Financial Market Updates in Basic layman language Like A Failed Investor Facebook Page

Syed Abdul Zelani,

MBA 2nd year,

Lovely Professional University.

Saturday, 20 October 2012

Global Stock Markets and Timings IST

Indian Capital Markets

Trading on the Indian Capital Markets segment takes place on all weekdays
There will be No trading on Saturday, Sunday and Published Indian Stock Market Holidays declared by the Indian Stock Exchange in advance.
The Market Opens at: 09:15 hours and Closes at: 15:30 hours
Pre open session will be from 09:00 to 09:15 hours
Pre-open trade session is a 15 minute trade session from 9:00AM to 9:15AM on the 50 stocks of NIFTY index .
Only 50 stocks of the NIFTY index can be traded during this time on both NSE and BSE. Normal trading for all other stocks will start at 9:15AM till 3:30PM.
In stock Markets News Plays a major  role ..sorry not major role it fully depended on it .


In LPU only officia UMS News will effect you but where as in Stock Markets even a foolish Roomer also Effect adversely in stock market.

In case of a major event or announcement comes before market opens like other country news and some news which is declared on holidays etcc. IIP industrial Production Index will comes every third Friday of month if it’s holiday then this give major impact on BSE/NSE. Special events include merger and acquisition announcements, open offers, delistings, debt-restructurings, credit-rating downgrades etc which may have a deep impact on investors wealth. In order to stabilize this, pre open call auction is conducted to discover the right price and to reduce volatility.

The 15 minutes of pre open session is broken into 8 + 4 + 3.
The first 8 minutes:  During this session investors can place/ modify /cancel orders on the basis of which the exchanges would determine the rates at which trading would happen. Orders are not accepted after this initial 8 minutes.
In the next four minutes, orders are matched, executable price is discovered and trades are confirmed. The next 3 minutes ls for hmmmmm for ringing bell? Just kidding lol I don’t know about that 3 minutes. may be Buffer period(There is lot more about Pre Market session But I know only this much)

Apart from the BSE and NSE, there are 21 regional exchanges which open at normal hours 9:15  to 15:30 hrs.

As I said above some times announcements comes before market opens like other country  stock exchange performances
Apart from this, global trends in stocks also affect the Indian market when it opens.
WORLD STOCK MARKET TIME ACCORDING TO India (Up to know I have just anlysed opening session ,In two or three days I will update it with closing sessions also)
     Sensex 30(Bombay Stock Exchange)-India (9.15 am to 3.30)IST
     Nifty 50 (National Stock Exchange)-India
(9.15 am to 3.30)IST
     Shanghai stock exchange(China 2200)  – Opens at 7.30 Am
      Hong Kong stock exchange(HangSeng 45) -  Opens at 7.55 Am
           Strait Times 30 (Singapore Exchange)-
           Nikkei 225(Nihon Keizai Shimun)-Tokyo Stock Excahange
           South Korea-KOSPI –Korean Stock Price Index Opens at 5.50 Am
           Tokyo stock exchange  - Opens at 5.50 Am
          NYSE, New York  – Opens at 8.30 Pm
        NASDAQ(National Association of Securitie dealers Autommated Quatation)Opens at 8.30 Pm
         BOVESPA , Brazil – Opens at 7 Pm
          Bogota,  Columbia – Opens at 7 Pm
          Dow Jones – Opens at 7.30 Pm
      DAX 30(Germany)-Frankfurt Stock Excahnge,(DEUTCHE AKTIEN INDEX)

            CAC 40(France)-Paris Stock Exchange-(Continues Assisted Quotation)
            FTSE 100(London)-London Stock Excahange- Financial Times Stock Index
                  Bye for now .. presently i am busy with ET Exams so i'll add some more exchanges timings.......... stay updated
…have a nice day !

Opening Demat Account all Need to Know

I am writing to help those members who would like to start investing in stocks but need to get all the relevant information at one place and in a simple format, to get started. So, if you are already an investor in stocks, please ignore this post

To start investing in stocks is really simple; you just have to open two accounts: a demat account and a trading account. We have given below what these accounts mean and how to open them.

Demat account

Demat is simply short for Dematerialized account. Stocks and shares are stored in a non-physical form in this account. Just as you require a savings account with a bank for storing your money, you would need a Demat account to hold your shares in a dematerialized form.

How to open a Demat account?

You can open a Demat account with any registered depository participant (DP).
To get a list of registered DPs,you may want to visit the NSDL ( or CDSL ( websites. Once you have chosen your DP, your DP will help you complete the formalities of opening an account. This typically involves the following steps:

NSDL(National Securities Depository Ltd) is connected with NSE Trades
CDSL(Central Depository Service India Ltd) is connected with BSE Trades
In India we have only these 2 depositories.

-> Filling an account opening KYC form(Know Your Customer)
-> Signing an agreement with the DP, which is meant mainly to protect your interest
-> Submitting supporting documents on the proof of your identity and address.

Trading Account

In order to trade in stocks (i.e. buying and selling) one needs to open a trading account. This is done through a stock broker who is a member of a stock exchange.

How to open a trading account?

Follow these steps to enroll as a client of a broker:
1) Identify a Trading Member: Find out the list of trading members from NSE's website 

2) Contact the Trading Member: The investor should contact the trading member either over the phone or make a personal visit to the trading member's office.

3) You have to inform the trading member whether he or she wishes to trade through the internet (if the trading member provides internet trading facility) or directly over the phone.

4) You have to provide the trading member certain simple and standardized details as part of regulatory requirements and sign a Member Constituent agreement. The Member will help you complete these formalities.

5) Trading member will issue you a unique client ID.
6) You can now commence trading. 

With warm regards,                                                                                                 Abdul Zelani.