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Option Trading And The National Commodity And Derivative Exchange

Option Trading And The National Commodity And Derivative Exchange

We know that stock exchange is markets were the securities are bought and sold

. It is a place for long term financing needs of the business and it support the activities of business by providing with the necessary liquidity. There are different types of investors in a stock exchange and they deal in different types of securities. It may be equity, future and options and commodities. Also a stock market participant may be a speculator or a genuine long term investor.

NCDEX is the abbreviation of national commodity and derivative exchange. NCDEX is an online commodity exchange in India. NCDEX was incorporated as a public limited company on April 23, 2003 with the aim of providing an online commodity exchange. NCDEX is formulated by forward market commission. NCDEX is situated in Mumbai and has more than 550 centers all over India. NCDEX also offers an agricultural commodity index. NCDEX has been functioning from December 15, 2003. NCDEX is a private company promoted by a consortium of national level institutions. The establishment of NCDEX has significantly boosted up the commodity trade in the Indian stock markets.

BTST is an abbreviation of buy today sell tomorrow. We know that we cannot sell a share before we receive the delivery of shares and our demat account is credited. In case we may get a huge profit by selling the shares that we have bought last day but it has not been credited in our demat account, it is then BTST stands useful. Using the scheme BTST which is provided by some brokers, we are able to sell the shares that have been bought yesterday. So BTST is a short term tool used in making profits. BTST is often used by investors to speculate when they expect that the price of a security is going to rise and they buy this share to sell it tomorrow at a higher price. So BTST helps in booking short term profit for any investor. Nowadays most of the brokers do provide BTST scheme and the investors make the most use of it.

An important segment of the stock markets are the futures and options. In futures and options we may buy or sell the securities without actually owning the same. Call is an option to buy shares of stock at a specified time in future. Call options are mostly profitable to the buyer when the underlying assets are moving up. So a buyer of call option always wants the value of the underlying asset to rise up. Some of the examples of call option are intraday calls and nifty call. An intraday call has the validity of only one day and the buyer exercise his right on that day itself. Intraday calls are like day trading and do not carry the position into the next day. Nifty calls are calls on the movement of nifty. The nifty indices will have a value and this value keeps on changing second by second. So are made on the movement of nifty indices.

by: Andrew Hudson
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Option Trading And The National Commodity And Derivative Exchange