Financial research and analytics of Indian companies
What exactly should you be concerned about before diving into a business, either to buy or to operate as your own? What do you have to do to run a fund house? A brokerage firm? A small scale manufacturing unit? Or, a service oriented business? Equally important is to understand the laws, rules and regulations […]
A Checklist to Conduct Basic Due Diligence in India
Even before you begin to get interested in buying a business or asset, there is a series of checks which you should perform. Often, companies engage legal and consulting firms to conduct basic due diligence on target companies and their management. Not only is this extremely expensive but in most cases not needed at the […]
Loan Agreement – Reviewing Restrictive or Negative Covenants
Oftentimes companies do not pay attention to the loan agreement and sign it off as standard template of the bank. The banks in turn do their bit in convincing management, and particularly younger entrepreneurs that such is the case and that everybody signs the same document. Nothing could be further from truth. Remember: A bank’s […]
Tourism Finance Corporation of India Limited Stock Analysis
Tourism Finance Corporation of India Limited (“Tourism Finance” or the “Company”) provides financial support to companies for the development of tourism-related projects, facilities and services, such as: hotels, restaurants, resorts, amusement parks, multiplexes and entertainment centers, travel and tour operating agencies. The Company provides financial assistance in the following ways: loans, equipment finance and leasing, working-capital financing, takeover […]
Short Straddle Option Strategy
When to use: Short straddle option strategy is used when the investor believes that the stock is not very volatile. The idea is to earn an option premium on two option contracts. The investor believes that the stock price will not change much before the expiry date. The maximum profit is the amount of premium collected by writing the […]
Long Straddle Option Strategy
When to use: Long Straddle Option Strategy is useful for investors who believe that the stock will be very volatile (i.e. move a lot in price) but are uncertain about the direction of the move. For example, suppose you believe an important court case that will make or break a company is about to be settled, and […]
Short Strangle Option Strategy
When to use: Short Strangle Option Strategy is used when the investor believes that the stock is not very volatile and that the stock price will not change much before the expiry date. The intention is to earn an option premium on two options at the same time. How it works: In the short strangle option strategy you sell an out-of-the-money call option […]
Long Strangle Option Strategy
When to use: Long Strangle Option Strategy is used when the investors believe that the stock will experience very high volatility but uncertain about the direction of its movement. How it works: In the long strangle option strategy you buy an out-of-the-money call option and an out-of-the-money put option of the same stock with the same expiration date, T. For example: On 16th August […]
What You Need to Learn about Investing in Penny Stocks
As per Securities & Exchange Commission (SEC), U.S.A, Penny Stocks are generally stocks issued by small companies which trade at less than $5 per share. In India, the words ‘penny stocks’ are not defined anywhere but are usually associated with stocks which trade for very little value and mostly below Rs 10. Is it a […]
Long Call Option Strategy
The most basic and commonly implemented option strategy is the Long Call Option Strategy. When to use: When you are Bullish and anticipate the stock / index to rise. How it works: Suppose, you are bullish on Tata Motors stock on 16th August 2013, when the share trades at Rs. 319. You buy a call option at a premium […]