Should you buy more to average share price if it goes down?
We all do it, or at least have done it at some point of time or the other. Average share price – Average your buying price by purchasing more shares at a price lower than your original purchase price. In an ideal world, you should of course be buying stocks where you see value. In other […]
What Does Open Interest in Stock Market Indicate?
Many people completely ignore open interest (- in futures & options market) data in stocks, believing it to be totally irrelevant for someone who trades in the cash segment. No wonder then, that most short term investors, even those who trade in the cash market suffer losses. One of my favorite quotes – “It takes considerable knowledge just […]
Circular Trading in Stock Market
Circular trading in stock market refers to a fraudulent trading scheme where buy/sell orders are entered by a person or by persons acting in collusion with each other to operate the price of the underlying security. The person(s) buying or selling knows that the same number of shares at the same time and for the same price will […]
Earn From Swing Trading
Amongst the many styles of making money in the market, swing trading has delivered the best results over the last few months. This has been possible mainly because of volatility in stock prices. Swing trading is the practice of earning a profit by buying and selling a security including stocks at different price points with the goal […]
What Constitutes Price Sensitive Information?
Any Information which is likely to have an impact on the price of a company’s tradable securities is termed as price sensitive information. More specifically, anything which is likely to influence the public to buy or sell the securities including the stock of a company. It does not matter whether such information actually has an […]
How Stop loss Orders Work on Hitting Trigger Price
Remember what happened when the news of irregular accounting in Satyam Computers hit the market or more recently when Ranbaxy’s drugs were banned by the USFDA. The stock prices in such scenarios correct at such extraordinary rates that nobody gets an opportunity to get out. A stop loss order works as a safety mechanism which gives […]
Best Stocks for Short Term Trading
Every time a stock moves a few percentage points (in either direction), traders start a notional mathematics in their mind. “Had I bought 300 or 3000 shares, 20 mins back, I would be X times richer. Had I sold 5 lots @ Rs. X, I would have made Y% return. In fact, I could have arranged […]
Technical vs. Fundamental Analysis – Do they work together?
I cannot count the number of books I have read on this topic, nor the number of times I have been part of a debate on this particular aspect of investing. Is there a Relationship between Technical and Fundamental Value of a Share? Short answer – NO. While technical analysis relies on a study of […]
How Do Circuit Breakers Work in The Stock Markets?
In the simplest language possible – a circuit breaker or circuit filter signifies the maximum that a stock (or the market as a whole) could rise or fall before trading in that specific stock (or in the market as a whole) is halted for a certain duration of time. Once a circuit breaker is applied, […]
A Risk Free Stock Investing Rule
Every time the stock market rises by a few percentage points, people start flocking to invest in stocks. More the market rises, more people start joining in. This has remained a mystery to me and to all those who believe in value investing. You will find value when the worth of a business falls below […]