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Call Ratio Backspread Strategy: A Smart Approach to Options Trading
8 May 2025 | 9 mins read
The Call Ratio Backspread is an advanced options strategy often used by traders seeking to capitalise on significant price movements in a stock or asset. It's particularly useful when you expect high volatility but are unsure of the direction. This strategy involves a combination of buying and selling calls in a ratio, allowing traders to profit from sharp price movements while limiting initial risk exposure. This guide will explore how the Call Ratio Backspread works, when to use it, its profitability, and more.
What is the Physical Settlement of Futures & Options Contracts?
8 May 2025 | 8 mins read
Futures and options (F&O) contracts are derivatives that derive their value from underlying assets such as stocks, commodities, or indices. Traditionally, many F&O contracts were settled in cash, meaning traders received or paid the difference in price instead of taking possession of the asset. However, in recent years, regulatory bodies like SEBI (Securities and Exchange Board of India) have mandated physical settlement of stock derivatives to curb excessive speculation and improve market stability. In this article, we will explore physical settlement of F&O contracts, its working mechanism, margin requirements, advantages, and disadvantages, along with key differences from cash settlement.
Stock Vs ETF: Difference Between ETF and Stock
8 May 2025 | 8 mins read
When it comes to investing in the stock market, two popular choices are stocks and exchange-traded funds (ETFs). While both offer opportunities for wealth creation, they differ in structure, risk level, diversification, and overall investment strategy. For beginners, understanding stock vs ETF can help in selecting the right investment option based on financial goals, risk appetite, and market knowledge. This article provides a detailed comparison between stocks and ETFs, including their features, advantages, disadvantages, and key differences.
Discounted Cash Flow (DCF): Calculation & Analysis with Examples
24 April 2025 | 5 mins read
If there is one thing certain in the investment world, it is uncertainty—you can never be sure of the results. However, there are strategies and financial models that you can use to estimate the return potential of investments. One such valuation method is the Discounted Cash Flow or DCF analysis. This article explores the meaning, calculations, benefits and challenges of DCF analysis.
What Are Growth Stocks & Why Investors Prefer Them
24 April 2025 | 5 mins read
Investors seeking to invest in companies with high potential for expansion and success often turn to growth stocks. These companies grow rapidly, reinvesting profits to fuel further growth. While these companies’ shares carry risks, their potential for substantial gains makes them attractive. But what exactly are growth stocks, and how can you identify the best opportunities? Let’s find out.
Price-to-Sales Ratio: Definition, Formula & How It Works
24 April 2025 | 6 mins read
Investors use various financial metrics to determine whether a stock is overvalued, undervalued, or fairly priced. One such ratio is the Price-to-Sales (P/S) ratio, which helps assess a company's valuation in relation to its revenue. Unlike earnings-based ratios, the P/S ratio is particularly useful for evaluating companies that may not yet be profitable but have strong revenue growth potential. In this guide, we will explain the price-to-sales ratio, its formula, its significance, and how to use it effectively in investment decisions.
Treasury Bills vs. Bonds vs. Notes: What’s the Difference?
24 April 2025 | 5 mins read
With more choice comes greater dilemmas. The wide range of investment options in the debt category creates more opportunities but can also lead to confusion. It is not always easy to determine what suits your needs, and selecting the right option can be tricky. However, understanding the differences can make the decision clearer. This article explores the distinctions between three key debt instruments - Treasury bills, Treasury bonds, and Treasury notes.
What Is Risk Tolerance and How to Determine It Before Investing?
8 April 2025 | 6 mins read
Ever wondered why some people jump off planes and dive into the deep ends of the ocean while others find joy in curling up on the couch with their pets? It all comes down to how much risk they are comfortable with. The same holds true for investing. Some investors are willing to put their hard-earned money into high-risk investments in the pursuit of bigger rewards, while others prefer safer options that protect their capital, even if it brings them lower returns
Debt Instruments: Types, Features & How They Work?
11 April 2025 | 6 mins read
Just like a balanced meal has different food groups - proteins, carbs, and fats, a well-structured portfolio has different asset classes. The three main asset classes include equity, cash, and debt. This article can help you understand more about debt instruments, their types, the advantages they offer, and the risks they carry.
What are Government Bonds & How Do They Work?
11 April 2025 | 6 mins read
Low-risk investments are not only suitable for risk-averse investors looking for fixed-income opportunities; they can also be used by all types of investors looking for portfolio diversification and balanced returns. If you are looking for some fixed-income options, government bonds can be a choice. Let’s find out more about them in this article.
What are Treasury Bills? Benefits, Risks & Investment Insights
8 April 2025 | 5 mins read
Treasury bills are a stable, short-term alternative to long-term, volatile investments. If you are seeking predictable performance, short-term returns, and peace of mind, they could be a suitable match for your investment strategy. But what exactly are Treasury bills, and are they the right choice for you? Keep reading to learn more and determine if they fit your financial goals.
Taxation on Futures and Options (F&O)
4 April 2025 | 7 mins read
Futures and Options trading is popular among traders and investors looking to hedge risk or generate profits from price movements of options and stocks in the markets. However, the taxation of F&O transactions differs from equity investment instruments like stocks and mutual funds. In India, F&O trading is treated as a business income, making it subject to specific tax rules that traders should keep in mind..
Key Factors Affecting Stock Option Prices
4 April 2025 | 6 mins read
Stock options derive their prices from multiple market and economic factors, making them more complex than traditional stock trading. Unlike stocks, whose prices are determined by supply and demand, options pricing is influenced by both external market forces and mathematical components related to time, volatility, and underlying asset movement.
Key Indicators for Swing Trading to Improve Your Trade Entries and Exits
27 March 2025 | 7 mins read
Swing trading is all about capitalising on short- to medium-term price movements within a trend. To make informed decisions, traders rely on technical indicators for swing trading that provide insights into market momentum, trend direction, volatility, and entry/exit points. The right combination of swing trading signals can improve profitability while minimising risk.
Best Swing Trading Strategies Every Active Investor Should Know
27 March 2025 | 7 mins read
Swing trading is a short-to-medium-term trading strategy that aims to capitalise on price swings in stocks, commodities, or forex markets. Unlike Intraday trading, which involves buying and selling within a single trading session, swing trading allows traders to hold positions for days or weeks to profit from market trends.