Ask me Anything on Trading & Investing

[mknits]

What is the STT on Liquid Bees and are the debit transaction charges waived off by both NSDL and CDSL ?

[Spaceship]

@portfolioplus911

If yes, why do they risk so much money for so little profit ?

@Spaceship

I have an answer to this query. But let first Mr karthik respond to it. I will add my 2 cents thereafter!

My 2 cents. Yes indeed it seems scalping. But at times, if u look deep inside what’s happening in the market breadth. You will realize that suppose some mutual fund company bought 15 Lacs shares of XYZ @ 522.65 rs. & sold them @ 522.85

Many times during bulk trades happening in open market, to buy huge number of shares which are in lacs of quantity, it takes good time. It doesn’t happens in a single click. If a mutual fund company is buying lacs of shares openly, then at times they may use DISCLOSE QUANTITY feature wherein upto 10% of total buy/sell quantity maybe shown in market breadth & available on exchange window. After this first set , another set of buy orders gets available to exchange window. This is usually done to not increase the ongoing market price.
But if you place a direct BUY limit order for lacs of shares, all the volume will reflect immediately on exchange window & problem would be that once the market price has increased, the buy orders wont get executed & will remain pending.

Now consider another scenario, if a company buys shares in lacs of quantity , it may start buying in multiple orders at market price when the volumes are good & price seems stable or in a small range.

So it may take couple of hours especially for midcaps, smallcaps until the bulk BUY order gets complete.

Even for large caps, it can take couple of minutes to hour until the order gets complete. And during that time when the order is getting executed, obviously the price may decrease or increase by few points.
So its the average BUY price which is usually shown when u see the bulk trades data at end of day.

Same happens when after the BUY order is complete & after sometime the price has moved further UP, now the company starts selling the shares which are in lacs of quantity.

Company will start to sell them slowly slowly & not dump all of them in a single click market order which can make the price fall ! Company starts selling the shares once the price starts increasing.

So some shares are sold at lower price, some are sold at little higher, some get sold further higher, some get sold lower.

So at the end, its the net buy price & net sell price but when the quantity traded is in lacs, the difference between BUY & SELL may seem like only few paise. But at times, the difference is like 1- 2 rs. too & more.

[Karthik]

@VIPULK

Most of d traders wud b having similar experiences like me I.e I choose a stock to short, it goes north and buy something, goes to rock bottom… Same thing happens when I exit

That is the market’s welcome gift!

@VIPULK

How do we hedge a portfolio of limited capital size say of 10 to 20k apart from diversifying it.
If in case u r in profit of say 30% on abv portfolio how do u manage and minimise d drawdown?
How do u analyze banking stocks

Is there any possibility of zerodha providing us…

a. Leverage on cnc order

b. Binary option /spread order say buy or sell strangle or straddle in 1 click to enter or exit both sides simultaneously thus reducing risk and margin requirements…

1. This would be difficult as the cost of hedging will not justify the portfolio size of say 20K. For example, if you have to buy a put option, and the premium is 3000, then essentially you are spending 15% of your capital towards hedging.
2. Again, since hedging this is not practical, managing the drawdown may not be possible.
3. I’m not really good with banking stocks, but I usually look for book value, Net interest margins, and NPA’s as an indicator of quality
4. No leverage on CNC orders. However, you can pledge your shares from holdings to trade more FNO. In a sense, that is like providing you more leverage. No binary, options for sure. The other things are on cards, hopefully next year

[Bhuvan]

@mknits

What is the STT on Liquid Bees and are the debit transaction charges waived off by both NSDL and CDSL ?

Answered here. And please such post quereis on the relevant threads.

What's the total transaction cost involved in purchasing LIQUIDBEES?

All charges for Liquidbees are the same as that of delivery trades, except that there is no STT charge as liquidbees is not considered a security, no brokerage as its a delivery trade, and no entry/exit load as this fund is traded on the secondary market. Charges for liquidbees are transaction charges of 0.00325% on turnover, 18% GST on transaction charge, SEBI charge of Rs.15/crore and stamp duty as per state of correspondence address. While exiting the liquidbees from Demat, a DP charge of …

[Dhruv_Talreja]

Hi Karthik,
You had created a video on retirement corpus calculation on Youtube.
But haven’t yet followed by a video where you explain how to create that corpus.
When do you plan to make such a video?
Waiting for it eagerly!

[Vigneshwaran_Vick]

Hello @Karthik ,

As a retail trader is there any strategy that we could adopt at the end of an expiry (in the last week) to cope up with the sudden decrease in the premium of options.

Also would like to know more about how a beginner can position himself to end up in a profitable position by trading options without doing much of a Call/Put writing (Understand there is a risk involved in this but would like to know is there any possibility at all).

Appreciate if you could help us in adopting a solution for the above queries.

[RandomPotato]

What are the 3 best technical indicator according to you?

Also, please share your biggest win and loss story.

[DA3110]

What time frame chart,( 1m,5m,15 m) should be used for day trading.
What are the best indicators to be used for day trading

[murugesanme]

I am new to the Stock market, less than two months. I am not emotionally balanced at the moment, because of the market speculation and I am trying to time the market. Questions to Mr. Karthick, 1) How to stay calm and cool, stay focused on the objectives 2) How long does it take for the beginners to be proficient in equity trading.

[Dhruv_JC]

Thanks for your reply Karthik.

Can you please elaborate shorting straddle, strangle and naked options strategies with very very recent trades? Your reply will greatly help me.

[murugesanme]

Mr. Karthick, I purchased your book “Finance made easy for kids”, I am afraid that it did not meet my expectations. Is there any refund policy?, Thank you

[gaurav5591]

Can I buy my shares a day before the Ex date, and sell on the ex-date for a Rights issue and still be elligible for Rights ?

[Tejkamal]

It’s been long time zerodha doesn’t add cnc leverage option for us pls add sir.

[Darshan]

Have you ever work as SCALPER ? how exactly they work/trade ? how it affect to market ?

[Karthik]

@Dhruv_Talreja

Hi Karthik,

You had created a video on retirement corpus calculation on Youtube.

But haven’t yet followed by a video where you explain how to create that corpus.

When do you plan to make such a video?

Waiting for it eagerly!

I know this is pending, I will do this sometime soon. But here is the short answer - one of the easiest ways to create wealth is by doing simple SIPs

[Karthik]

@Vigneshwaran_Vick

As a retail trader is there any strategy that we could adopt at the end of an expiry (in the last week) to cope up with the sudden decrease in the premium of options.

Yes, of course, write out of the money call options

@Vigneshwaran_Vick

Also would like to know more about how a beginner can position himself to end up in a profitable position by trading options without doing much of a Call/Put writing (Understand there is a risk involved in this but would like to know is there any possibility at all).

One will have to get comfortable with option writing. Remember, for the call option buyer to be profitable - the markets will have to move up. However, for the call option writer to make money, the market can stay where it is or move down. So two out of the 3 possible scenarios favor the seller.

[Karthik]

@RandomPotato

What are the 3 best technical indicator according to you?

Also, please share your biggest win and loss story.

1. EMA
2. Bollinger Bands
3. ATR

Too many of these stories, hard to pick one

[Karthik]

@DA3110

What time frame chart,( 1m,5m,15 m) should be used for day trading.

What are the best indicators to be used for day trading

I’d suggest you use the 5M or the 10M frequency. Higher the time period, higher is the quality of signal.

Simple stuff like EMA works beautifully well on intraday charts.

[Vigneshwaran_Vick]

Thanks Much @Karthik for sparing your time to answer this and definitely this helps. Will begin to try writing the options once I could move in more funds to portfolio. Also, If there is little more guidance you could provide on the strategies(spreads) we could follow for option writing, it would be more helpful.

[Karthik]

@murugesanme

I am new to the Stock market, less than two months. I am not emotionally balanced at the moment, because of the market speculation and I am trying to time the market.

Emotional stability is very important, Murugesh. Please ensure you are in the right frame of mind. Let markets not ruin your outside life, it is simply not worth it.

@murugesanme

Questions to Mr. Karthick, 1) How to stay calm and cool, stay focused on the objectives 2) How long does it take for the beginners to be proficient in equity trading.

1. Spend time educating yourself. The more you know, the better it is for you - eventually, this will lead you to take more informed decisions. When you make informed decisions, you are more confident of your position, and the more confident you are, the more relaxed you get.

2. Really depends on your learning abilities. I’ve spent over a decade and I still learning and honing my skills.