Share Market Learn With Earn India: 10. Shortsell, Hedging, Arbitraj and commodities

Share Market Learn With Earn India

Date. 05 August 2020

Today’s Market

MARKET SCRIP	OPEN	HIGH	LOW	CLOSE	52 WEEK HIGH	52 LOW
NSE
NIFTY 50	11155	11225	11064	11101	12430	7511
NIFTY FUTURE	11131	11226	11063	11132	12419	7526
BANK NIFTY	21686	21936	21448	21509	32613	16116
BANK NIFTY FUTURE	21699	21999	21464	21607	32773	16020
CURRENCY USD-INR	75.10	75.20	74.85	75.01	77.01	68.663
COMMODITY-GOLD	54900	55360	54900	54064	49328	332701
COMMODITY-SILVER	69746	72850	69569	69797	53181	33619
COMMODITY-CRUDE	3134	3241	3115	3151	4671	804

BSE
SENSEX	37892	38139	37550	37663	42273	25638
BANKEX	24573	24900	24356	24430	37193	18430

Market Prediction (Speculation) Factor’s

MARKET SCRIP	RESULT
VIX	23.56
PCR	0.97
PE	31.41
DII	-665
FII	703
SGX NIFTY	11117
DOW JONES	26828

Market Analysis News’s/ Business Current Affair’s

NMDC, India’s largest iron ore producer and a diversified navaratna PSU, recorded a sharp rise in overall production and sales in july 2020 as compared to the corresponding period in july 2019

Alembic pharma gets USFDA nod for vardenafil hydrochloride tablets

Astral poly technic Q1 results, revenue was lower by 33.4% yoy

Lupin launches favipiravir drug covihalt for treatment of mild to moderate COVID19

Dixon technologies revenue declined by 54.9% yoy to Rs.517 Cr

Bharti airtel signs pact with amazon web services for cloud services

Triveni turbine consolidated revenues declined by 22.7% yoy to Rs. 165 Cr

Result declared of tata consumer products, gujrat gas ltd, godrej consumer products, indian oil corporation, cadila healthcare, godrej properties, EID parry, Jyothy labs, strides pharma, triveni turbine, intellect design.

Learning Point/ Educational Study Point

Short selling occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money. Short sellers bet on, and profit from, a drop in a security's price. Short selling has a high risk/reward ratio: It can offer big profits, but losses can mount quickly and infinitely. Traders may use short selling as speculation, and investors or portfolio managers may use it as a hedge against the downside risk of a long position in the same security or a related one.

Hedging refers to buying an investment designed to reduce the risk of losses from another investment. Investors will often buy an opposite investment to do this, such as by using a put option to hedge against losses in a stock position, since a loss in the stock will be somewhat offset by a gain in the option. Hedging is a risk management strategy employed to offset losses in investments by taking an opposite position in a related asset.

The reduction in risk provided by hedging also typically results in a reduction in potential profits. Hedging strategies typically involve derivatives, such as options and futures contracts. Hedging techniques generally involve the use of financial instruments known as derivatives, the two most common of which are options and futures. Keep in mind that with these instruments, you can develop trading strategies where a loss in one investment is offset by a gain in a derivative. In the index space, moderate price declines are quite common, and they are also highly unpredictable. Investors focusing in this area may be more concerned with moderate declines than with more severe ones. In these cases, a bear put spread is a common hedging strategy.

Arbitrage is the practice of taking advantage of a price difference between two or more markets or exchanges. In Indian markets, stocks trade in the two major exchanges – NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).

Take Revision

In previous session we see about option or derivative, strike price, implied volatility, open interest, greeks. Portfolio build up for create asset. Intraday trading; strategy, characteristics. We already see for intraday use compulsory candlestick chart, candle timeframe, indicators, tools.

One Take Solution

Analyze of option chain for stock and index, call and put, open interest, support and resistance. Also we use volatility. First, we find out support and resistance level. Take trade entry between support and resistance level. At the time of exit we refers volatility. If support is high then we buy call otherwise buy put at level of high resistance.

Earning Point

GNA axles, TVS srichakra, lumax autotech, sparc, adf foods, tata consumer, dhunseri tea & ind., Bombay burmah, cc products, pi indu., tata coffee, shanthi gears, harrisons mal, Andrew Yule, jayshree, Goodricke, muthoot finance, gujrat gas, chamanlal setia export ltd, KRBL.

Article

Hello friends,

A commodity market is a physical or virtual marketplace for buying, selling, and trading raw or primary products. There are currently about 50 major commodity markets worldwide that facilitate trade in approximately 100 primary commodities.

Commodities are split into two types: hard and soft commodities. Hard commodities are typically natural resources that must be mined or extracted—such as gold, rubber, and oil, whereas soft commodities are agricultural products or livestock—such as corn, wheat, coffee, sugar, soybeans, and pork.

A commodity market involves buying, selling, or trading a raw product, such as oil, gold, or coffee.

There are hard commodities, which are generally natural resources, and soft commodities, which are livestock or agricultural goods.

Investors can gain exposure to commodities by investing in companies that have exposure to commodities or investing in commodities directly via futures contracts.

Types of Commodities

Commodities that are traded are typically sorted into four categories broad categories: metal, energy, livestock and meat, and agricultural.

1. Metals

Metals commodities include gold, silver, platinum, and copper. During periods of market volatility or bear markets, some investors may decide to invest in precious metals–particularly gold–because of its status as a reliable, dependable metal with real, conveyable value. Investors may also decide to invest in precious metals as a hedge against periods of high inflation or currency devaluation.

2. Energy

Energy commodities include crude oil, heating oil, natural gas, and gasoline. Global economic developments and reduced oil outputs from established oil wells around the world have historically led to rising oil prices, as demand for energy-related products has gone up at the same time that oil supplies have dwindled.

Investors who are interested in entering the commodities market in the energy sector should also be aware of how economic downturns, any shifts in production enforced by the Organization of the Petroleum Exporting Countries (OPEC), and new technological advances in alternative energy sources (wind power, solar energy, biofuel, etc.) that aim to replace crude oil as a primary source of energy, can all have a huge impact on the market prices for commodities in the energy sector.

3. Livestock and Meat

Livestock and meat commodities include lean hogs, pork bellies, live cattle, and feeder cattle.

4. Agriculture

Agricultural commodities include corn, soybeans, wheat, rice, cocoa, coffee, cotton, and sugar. In the agricultural sector, grains can be very volatile during the summer months or during any period of weather-related transitions. For investors interested in the agricultural sector, population growth–combined with limited agricultural supply–can provide opportunities for profiting from rising agricultural commodity prices.