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ACCOUNT OPENING
ONLINE TRADING
TRADING PLATFORM & TOOLS
FUND TRANSFER
MARGIN & LEVERAGE POLICY
GENERAL INVESTMENT & OTHERS
EQUITY
DERIVATIVES
COMMODITIES
CURRENCY
IPO
ETF
RGES
NRI
ACOUNT OPENING FAQ

1 What are the different Different types of accounts: Trading, Trading & Demat, Commodity accounts

  • Only a Trading account is needed to trade F&O (Equity, Currency)
  • Commodity trading account is needed to trade MCX and NCDEX
  • Demat is required for equity delivery based trading
To trade intraday equity only trading account is enough, but you have to map any existing demat account that you already hold to this trading account.

2 What is the time taken to open an account

Time taken: 1 day for trading account
7 working days for demat account.
You can start trading F&O as soon as your equity trading account is opened. To trade equity (delivery or intraday), you will need to wait till the demat account is opened.

3 What are the required documents to open an Account

PAN Card (Permanent Account Number):
You are required to provide a self attested photocopy of your PAN card.

Address Proof:
Everything at Wealth Discovery is online and all the information from us will be sent to you on your email. Even then, it is compulsory for you to provide us with an address proof. You’d be required to provide proofs of correspondence and permanent address. Your correspondence and permanent addresses could either be same or different. If your correspondence address is different from your permanent address, then you’d have to give us a proof for each of the addresses.To get your account opened at Wealth Discovery, you are required to courier us the Account opening forms. We would request you to give us your original documents like land line telephone bills, electricity bills, bank statements etc. as your proof of address. In case you are providing us your Passport/Driver’s license or any such document, we would appreciate if you could get such document notarized or signed by a gazetted officer. Regulators require us to ensure that none of the proofs you provide are forged and this process will help us ensure the same along with ensuring that your account gets opened faster. The account opening instruction sheet has a detailed list of all documents that can be attached as address proof.

Income proof:
To trade Futures & Options or to trade Commodities, Exchanges ask us to ensure that the client has some other source of Income/Networth. Hence if you want to trade these segments, you will be required to give us an Income proof or Networth Certificate. It could be Form-16, IT acknowledgement copy, 6-month Bank statement (will also act as an address proof), Stock Holding Statement, or the CA certifying your networth. This is a mandatory document for trading Derivatives today.

Photos:
Passport size photos would be required to open an account. The number of photos required will depend on what kind of account you are opening. The instruction sheet would carry the details and you can click here to know more.

Cancelled cheque :
An original cancelled cheque is required to confirm your Bank Account and because it is an original document, it also ensures that we are complying completely with the exchange regulations. We would need one original cancelled cheque leaf and a cancelled cheque leaf would look something like this:

4 What are Account opening Charges

We open trading accounts free of charges
Our demand account carries a fees of Rs 699 for life time and an AMC of Rs 450

5 What are the Different ways to open an account

  • You can fill our account opening form online, print a copy and send it to us
  • You can also download our account opening, print a copy and send it us
  • If you are in a remote area you can request us to send the application packet via courier which you can send back with the filled form and relevant documents

6 What are the next steps after opening an account?

Once your account is open you will receive 2 emails from Wealth Discovery

  • Welcome email which gives you the login and password to our reporting backoffice platform
  • Trading and transaction passwords email.You can login and trade using these on any of our platforms. You will be asked to change the passwords on your first login. You will be able to trade or view equity/stocks only once the demat is opened which will take around 7 days from when you receive this email.

7 What is the username and password policy at Wealth Discovery?

At Wealth Discovery we have various products offerings that require separate authentications; a user who has a trading account with us has to enter his credentials for:

  • Online Trading
  • Back-Office Login
  • Fund Transfer
  • My-Portfolio
  • My Page

8 How would I be able to make transactions after I open an account on Wealth Discovery Online Portal?

There are several ways to make transactions on Wealth Discovery Portal; you can access the Online Trading platform through our quick links. You can also access our Transact Now page which is a menu item under My Accounts by entering your UID and Password that would be provided to after your trading account is opened.

9 HWhat other options are available to me in the My Account section of the Online Portal?

In addition to access to Online Trading, Fund Transfer, Back-Office you also get access to your customization My Page for financial information, My Watchlist for stocks you would like to track and My Portfolio which would contain your holdings at Wealth Discovery any other portfolio you would like to create.

9 Who do I contact for user name password and other access issues?

For all username and password related questions please contact our Customer Care center our drop us an email at info@wealthdiscovery.in.

ONLINE TRADING

1 I have opened a Trading Account with Wealth Discovery and received my Login ID and Password.
How do I get started?

To get started with your EXE based trading application, you have to first download and install the trading software.

2 What is an Exchange Segment? In which segments can I place an order?

Wealth Discovery customers can trade online in BSE Equity, NSE's Equity, Equity Derivatives and Currency Derivatives Segments. Wealth Discovery online trading platform provides a single interface access to all the above market segments. However, a user can place orders only in those segments indicated by you at the time of opening your account.

3 How do I place an order?

Before you place an order, you have to create a Market Watch. You can setup and track multiple securities for their latest market prices and volumes in your Market Watch. When accessing your account for the first time, the system will prompt you that no Market Watch is selected and setup. To setup your Market Watch: To place an order, select the desired security in the market watch, press the function key F1 (for BUY Order) or F2 (for SELL Order). Enter the required order details such as Product Type, Quantity and Price and click Submit. Enter your transaction password at the system prompt and click Submit to confirm and place your order. You will see messages in the Message Window below confirming a system order number and once confirmed by the Exchange, an Exchange Order No.

4 Now that I have placed an order, how can I view and track my orders?

You can view orders in the Order Book window, by invoking the Function Key F3. Alternatively, open Order Book from Orders and Trades > Order Book Menu in the Menu Bar. The Order Book window is split into two distinct sections, the 1st section displays the 'Open Orders' and the 2nd section displays 'Completed' orders. Open Orders are orders pending execution at the Exchange while Completed Orders are those that are either executed or rejected. The order window displays several important information about your orders e.g. Exchange Order No., Confirmation Time, Order Status, Order Price, Total Quantity etc. Tip-Personalize the Column Profile in your Order Book using the menu options displayed on right-click

5 Can I modify an order after receiving an order confirmation message?

Yes, you can modify open orders from the Order Book. To modify an order, select the order under 'Open Orders' and click the 'Modify' button. In the Modify Order window, change the price or quantity as desired and click 'Submit'.

6 Can I cancel an order after receiving an order confirmation message?

Yes, you can do so, provided the order is still in open status i.e. unexecuted at the Exchange. To cancel an order, select the order and click the 'Cancel' button.

7 How are my limits affected once I have transferred funds?

Your limits are enhanced instantly on successful transfer of funds to your trading account. The amount transferred is reflected in the Pay-in Amount column in Surveillance > RMS Limits > View Limits Menu path.

8 How do I verify the limits available in my Trading Account?

The summary of your 'utilized' and 'available' limits is provided in 'My Limits' Report. From the Web Links Menu select My Limits to view your report. The report is split into 2 sections-the 1st section provides the available credits or limits in your trading account under various sub-heads, while the 2nd section provides the margins blocked or debits in your trading account under various sub-heads. My Limits Report is provided segment wise-Equity Segments as one group (comprising Equity, Equity Derivatives and Currency Derivatives) and Commodity Segment as another group.

9 What are different type of Trading Orders

Limit
Limit order allows you to set buy/sell limits on a contract or an order. This effectively means that you can buy or sell a particular stock if it reaches the desired level. This strategy helps in maximizing profits and minimizing risks, even when you are not tracking your holdings during the market hours

Market
This option allows you to trade by placing orders during market hours. You can hence buy/sell at the best obtainable price in the market at the time of execution.

Stop Loss
An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor’s loss on a position in a security. A stop-loss order takes the emotion out of trading decisions and can be especially handy when one is on vacation or cannot watch his/her position. However, execution is not guaranteed, particularly in situations where trading in the stock is halted or gaps down (or up) in price. Also known as a “stop order” or “stop-market order.”

TRADING PLATFORM & TOOLS

1 What kind of trading platforms does Wealth Discovery Offer ?

We offer different platforms for- Desktop, Web, and Mobile.
ODIN-DIET, NET.NET and iWin are platforms built by our Technology Provider (Financial Technologies) that provide a 360 degree user interface.

Desktop Trading
ODIN DIET is our desktop trading application, it’s an application-based trading front office solution enabling clients to connect to our servers via the Internet. It is a light-weight easily downloadable application which facilitates efficient trading and incorporates many appealing features required by active clients. The exe file for this application can be downloaded from our download section. Notable features of this application are

  • Calculation of mark-to-market (MTM) profit and loss online
  • Real-time streaming quotes and facility to directly place orders
  • Efficient and scalable on heterogeneous network platforms
  • Market Watch to place any number of scrips
  • Highest level of encryption with SSL
  • Efficient backup for placed orders and trades
  • Saves customized window layouts into workspaces and restores them on login
  • Continuous update of the indices through ‘The Index View’
  • Seamlessly integrated mutual fund and IPO platform

Web-based Trading
NET.NET is a state-of-the-art browser based online application enabling highly secure trading by retail customers through us. Some of the notable features are:

  • Clients receive trade confirmations and real-time market information from brokers at marginal cost
  • High security settings
  • Small footprint
  • Supports streaming as well as ‘Push’ and ‘Pull’ technologies
  • Complete branding options for members
  • Multi-lingual support
  • Direct placement of orders on multiple exchanges
  • Integrates with banks’ payment gateways for online fund transfer

Mobile trading
iWin is India’s first Mobile application that enables real-time connectivity to stock market participants using their mobile handsets. iWin™ allows the investors to view market rates, enter/modify/cancel orders and view their positions and transactions through a secure encrypted channel. iWin™ also provides charting facility.

  • Enables multi-segment, multi-exchange trading
  • Provides ubiquitous real-time market watch
  • Provides comprehensive reports and limit views
  • Supports co-branding via customization
  • Provides auto-refresh facility in basic GPRS mode
  • Enables auto-disconnect on ‘Idle’
  • Enables position management
  • Helps create user portfolios

2 What other tools does Wealth Discovery Offer ?

In addition to our state of the art trading platforms we offer several applications & tools that are designed to improve your financial experience.

Advanced Portfolio Tracker- Ace Wealth Tracker is a multi asset class portfolio module which is integrated with the back-office making it easier for you to import your actual holdings with us in to the tracker. The portfolio tracker also keeps track of news and actions related to your holdings and automatically send alerts and messages relevant to your portfolio via email

  • 1. Multi-Assets like Stocks, Mutual Funds, ULIPS, Insurance, Real Estate, Commodity, F & O , Bullions, Foreign Currency and many more.
  • Maintain Multiple Portfolios and also get a aggregated view
  • Graphical presentation of Portfolio asset classes like pie, line charts
  • Excellent Reporting capabilities with exporting options to Excel, PDF etc.
  • SMS & E-mail Alerts.
  • MIS Reports
  • Net holding reports, Taxation reports, Transaction reports Family wise holding reports
  • Customized MIS reports as per clients requirements

Stock Screeners & Calculators- We provide several screeners and advance financial calculators that help you make informed trading decision, below is the list of our financial calculators and screeners

  • EMI
  • Wealth Retiring
  • Savings
  • Tax v/s Free Tax
  • HRA Exemption
  • MIS Reports
  • Inflation Impact
  • SIP Calculator
  • Investment Guidence
  • SIP Cost
  • PV Single Amount
  • FV Growing
  • Mortgage Calculator
  • FV Decreasing
  • EMI Advance
  • Tax Saveg
  • Weighted
  • Retirement Calculator
  • Return Rate Calculator
  • Annuity Calculator
  • Present Val Calculator
  • Stock Screener
FUND TRANSFER

1 What are the features of Wealth Discovery Payment Gateway?

We have deployed Paynetz a payment gateway technology provided by Atom Technologies, we offer Payment Gateway service from multiple banks under one roof. Paynetz for online client’s module empowers us to receive money from our clients’ accounts using their trading terminals once a successful transaction is made trading limits are updated in real time.

2 What is the process for Online Fund Transfer?

  • The Trader uses Trading System to transfer funds to Broker Account
  • Trader Selects the option “Fund Transfer” on the Home page of the trading system
  • Trader is now on Fund Transfer Details Page; Selects “atom/ Net Banking” as the payment option, Trader Selects the “Product” and Enters “Transfer Amount” then Confirms 
  • Trader is now on atom bank selection Page he then selects a Bank for transferring funds and Confirms Trader is redirected to the Banks website where he Enters the Net Banking “User ID” and “Password” Trader is acknowledged the fund transfer status immediately ODIN Trading System updates the Clients trading limits online

3 What is the process for Offline Fund Transfer through Wealth Discovery Website?

  • Client Selects and Logs In to the “Fund Transfer” on Wealth Discovery website
  • Client now selects “atom/ Net Banking” as the payment option, Selects the “Product” and Enters “Transfer Amount” then Confirms
  • Client is now on atom Fund Transfer Page; Selects a Bank for transferring funds and Confirms  Client is redirected to the Banks website where he then enters the Net Banking “User ID” and “Password”
  • Client is acknowledged the fund transfer status immediately
  • Broker Trading System updates the Clients trading limits online

4 How long does it take for my deposit to clear and to be used as tradeable margin on my account?

If the transfer is happening from a registered HDFC bank account, the client will be given trading margins immediately. However, if the transfer is happening via NEFT or RTGS, we will need 3-4 hours to update margins. For instant margin transfer, you should use our built-in pay-in facility that supports over 25 banks.

MARGIN & LEVERAGE POLICY

1 What is Margin? What constitutes Available Margin?

When you make purchases in your trading account, there are two ways in which you can pay-either pay in full using your own funds or use margin. Margin refers to the finance extended by your broker for your purchase. In a margin purchase, you pay a certain portion of the purchase while the broker lends the difference. Of course there is a financing cost which the broker will charge you a fee for extending this finance in addition to the normal brokerage and also hold the stocks you purchased as collateral.

2 What is Wealth Discovery’s Margin/Leverage Policy?

Margin/Leverage Policy
At Wealth Discovery our margin policy is designed to cater to the various product offerings we have this margin policy is subject to change at any point of time based on market volatility. We offer several membership plans which provide extremely high (~25 time) leverage for traders fond of margin trading, for more details on membership plan on offer please refer to our pricing plan section. The following section will give you our standard margin policies while trading equity intraday & delivery, F&O, currency and commodity we offer higher leverages than our standard margins for our clients who have taken different memberships,

Margin Policy for Stocks or Equity Trading

Intraday equity:
When you take a trade in equity and square the position off before the end of day, it is called as intraday equity trading. Since the trades are squared-off intraday and does not require any overnight carry of the trade we are able to provide you a margin or leverage of between 3 to 10 times on around 150 liquid stocks based on the trading plan you have subscribed to. You can trade intraday at Wealth Discovery with leverage by using these 2 product types.

MIS (Margin Intraday Square off)
Trades under this product type come with a commitment of keeping the trade intraday and hence higher leverage between 3 to 10 times based on the risk, volatility of the stock and the trading plan you would have subscribed to. When you take a trade using product type as MIS the trades are auto squared off at 3.20pm if you forget to square-off your trade.

CO (Cover Orders)
Cover orders is another order type which Wealth Discovery has made available for our active traders. Traders can trade intraday using market orders but with a definite and compulsory stop loss. Since the risk with such a position is low, the margin required is less and hence the leverage higher. When you trade intraday using cover orders, the leverage you get vary from 6 to 20 times (twice as much as MIS). But again all open positions get squared off at 3.20pm.

Delivery Equity:
When you buy stock and hold it overnight, it is called a delivery trade. At Wealth Discovery, you need to use product type as CNC while placing a trade to take delivery of equity stock. The product type CNC will show up on your order window only if you have a demat account mapped to your trading account since you would require a demat to take delivery of the equity that you purchase. At Wealth Discovery the leverage factor for delivery trades is one which means you can only use the amount that you have to purchase stocks for delivery purposes for e.g. if you want to buy Rs 2 lac of stock as CNC, you will need this Rs 2 lac in your trading account and similarly if you want to sell Rs 2 lac of shares with product type as CNC, you will need these shares in your demat account mapped to your trading account.

Margin Policy for Futures Trading – Equity (Stock & Index), Currency & Commodity

Futures as such are inherently leveraged which means that to buy X amount of futures you need only a small portion of it called as margin in your account. The margin requirement to purchase futures is stipulated by various exchanges. There are three types of products that you can use for trading futures at Wealth Discovery

NRML (Normal)
To take position as NRML you will need the complete exchange stipulated margin, but once you take a position as NRML you can hold the position till expiry.
MIS is used by intraday traders as all open positions get squared off before the end of day. But since no position is carried forward overnight the margin required is also lesser than the exchange stipulated margins.

  • For equity & Index futures, MIS margin: 40% of NRML margin, all MIS positions squared off at 3.20pm.
  • For Commodity futures, MIS margin: 40% of NRML margin, all MIS positions squared off 25 minutes before market closing
  • For Currency futures, MIS margin: 50% of NRML margin, all MIS positions squared of at 4.30pm.

CO (Cover orders)
Cover orders is a unique product from Wealth Discovery where you can trade intraday using market orders but with a definite and compulsory stop loss. Since there is a stop loss placed, the risk of the position reduces and hence the margin required to take it reduces as well.

Margin Policy for Options Trading – Equity (Stock & Index) & Currency

Option buying:
When you buy options, either equity or currency there is no additional leverage we provide. So if you are buying calls or puts of any contract, the premium required to buy them has to be present in your trading account.

Option Writing/Shorting:
When you short an option, the margin required depends on various aspects like underlying, expiry, volatility and more. You can short option either using the product type as NRML or MIS.

3 What Margin Products does Wealth Discovery Offer?

Here is the broad summary of our margin products for more details please refer to the pricing section of our website

  • Equity delivery based trading (CNC: Cash n Carry)
    • 100% money required upfront. Use the product type CNC in your buy/sell order form.
  • Normal F&O Trades (NRML: Normal)
    • Exchange stipulated margins, positions taken as NRML can be held until expiry.
  • Intraday leverage Trade (MIS: Margin Intraday Squareoff)
    • Trade using MIS if you want leverage or additional margin. All MIS positions are squared off
    • automatically 10 to 15 minutes before close of the markets.
    • Up to 25 times intraday leverage for equity
    • Up to 4 times for Futures (over and above the margin you get anyways on futures)
    • Up to 4 times for option shorting
    • No leverage for option buying. (You can use bracket orders for additional leverage only for buying Nifty and Bank nifty options)
GENERAL INVESTMENT & OTHERS

1 Who is an NRI?

According to Sec. 6(1) of the Income Tax Act, an individual shall be a resident in India in any financial Year if he a) Is in India in that Financial Year for a period or periods totaling to 182 days or more Or b) Has been in India within the four preceding years for a period or periods totaling to 365 days or more and for a period of 60 days or more in that Financial Year.

2 Who is a PIO?

A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if: He/She at any time held an Indian Passport. OR He/She or either of his parents or any of his/her grandparents was a citizen of India; OR Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen (a) or (b) above.

3 What are the products offered to NRI?

NRI can invest in the following products. Equity trading on BSE and NSE Derivatives trading on the NSE IPO Portfolio Management Investments in Mutual Funds

4 What steps an NRI needs to take to start investing in the Indian Stock Market?

Acquire Pan Card or provide existing PAN Card Number. Establish NRE/ NRO Bank Account - Savings and PIS account with designated bank which is approved by RBI for this purpose. Establish Demat account with broker and start trading

5 What type of saving bank account(s) can be opened by an NRI or PIO in India?

Any NRI/PIO can open two types of savings accounts with any bank in India. They are NRE and NRO bank accounts.

6 What is a NRE account?

A NRE bank account is an external saving bank account opened for Non resident Indians. This is why it is known as Non-Resident External account. Since it is an external account, any monies lying in NRE account can be taken outside the country or in other words, the monies lying in NRE account are fully repatriable. This money can be converted into any foreign currency at the behest of the account holder and can be remitted outside the country.

7 Can money be transferred from NRE account to NRO account?

Yes money can be freely transferred from NRE account to NRO account.

8 Can money be transferred from NRO account to NRE account?

No, money cannot be transferred from NRO account to NRE account.

9 What is the status of NRO/NRE accounts on the return of the account holder to India?

RBI has advised banks to re-designate such accounts as resident accounts on return of the account holder to India.

EQUITY

1 Why the Indian Stock Market?

Share market has given an average annual return of about 18 percent in the last 10 years.
The Indian share market has given an average annual return of about 18 percent in the last 10 years. This is higher than returns earned on traditional avenues like FDs, corporate and government bonds, commercial papers, etc. Going forward, the corporate sector is expected to perform even better on the back of rapid urbanization and increase in per capita income of the population, indicating a stronger growth. As a result, the stock market may be the best investment bet for long term wealth creation.

2 How does it work?

National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)
The two major stock exchanges—National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)—are open from Monday to Friday from 9.15 am to 3.30 pm Indian Standard Time. Investors can place orders for equity trading/buying by opening an account with a broking house, and opt for the online trading facility for convenience. The Indian equity market follows the settlement cycle of T+2, indicating that the transaction will be settled two working days after it is made.

DERIVATIVES

1 What are Futures?

Through Wealth Discovery, you can now trade in Index and Stock futures on the National Stock Exchange (NSE). Futures trading allows you to enter into a contract (having a maximum period of 3 months), and take buy/sell positions in Index or Stocks.
Trading in futures is not as complex as it sounds. If, during the contract period, the price moves in your favour (i.e. rises in case you have a buy position or falls in case you have a sell position), you make a healthy profit, and vice versa. Today, only a few stocks that meet the liquidity and volume criteria are qualified for futures trading.
The process of futures trading has become simpler with two smart tools offered by Wealth Discovery—‘Calculate Index’ and ‘Know your Margin’—that helps in calculating your margin requirements and also the Index and Stock price movements.

2 What is an Option?

An option is a contract between two parties (the seller and the buyer) that gives the buyer the right to buy or sell shares at a specific price, on or before a particular date. There is no obligation on the buyer to complete the transaction if the price is not favorable to him. For this, the buyer has to pay to the seller some money called premium. To carry out a transaction (buy/sell) position on Index/Stock options, one has to pay certain percentage of the order value as margin. There are two types of options: Call and Put. The former allows the trader to buy the underlying asset at a certain price, while the latter allows him to sell it at a certain price.

3 What are different Derivative Strategies?

Bullish options strategies are employed when the options trader expects the underlying stock price to move upwards. It is necessary to assess how high the stock price can go and the time frame in which the rally will occur in order to select the optimum trading strategy
The most bullish of options trading strategies is the simple call buying strategy used by most novice options traders. The bull call spread and the bull put spread are common examples of moderately bullish strategies. Mildly bullish trading strategies are options strategies that make money as long as the underlying stock price does not go down by the option's expiration date. Writing out-of-the-money covered calls is a good example of such a strategy.

Bearish options strategies employed when the options trader expects the underlying stock price to move downwards. It is necessary to assess how low the stock price can go and the time frame in which the decline will happen in order to select the optimum trading strategy.
The most bearish of options trading strategies is the simple put buying strategy utilized by most novice options traders. The bear call spread and the bear put spread are common examples of moderately bearish strategies. Mildly bearish trading strategies are options strategies that make money as long as the underlying stock price does not go up by the options expiration date. In general, bearish strategies yield less profit with less risk of loss.

strategies in options trading are employed when the options trader does not know whether the underlying stock price will rise or fall. Also known as non-directional strategies, they are so named because the potential to profit does not depend on whether the underlying stock price will go upwards. Rather, the correct neutral strategy to employ depends on the expected volatility of the underlying stock price.

Examples of neutral strategies are:

  • Guts - sell ITM (in the money) put and call
  • Butterfly - buy ITM (in the money) and OTM (out of the money) call, sell two at the money calls, or vice versa
  • Straddle - holding a position in both a call and put with the same strike price and expiration. If the options have been bought, the holder has a long straddle. If the options were sold, the holder has a short straddle. The long straddle is profitable if the underlying stock changes value in a significant way, either higher or lower. The short straddle is profitable when there is no such significant move.
  • Strangle - the simultaneous buying or selling of out-of-the-money put and an out-of-the-money call, with the same expiration. Similar to the straddle, but with different strike prices
  • Risk reversal - simulates the motion of an underlying so sometimes these are referred as synthetic long or synthetic short positions depending on which position you are shorting.n
  • Collar - buy the underlying and then simultaneous buying of a put option below current price (floor) and selling a call option above the current price (cap).
  • Fence - buy the underlying then simultaneous buying of options either side of the price to limit the range of possible returns.
  • Iron butterfly - sell two overlapping credit vertical spreads but one of the verticals is on the call side and one is on the put side.
  • Iron condor - the simultaneous buying of a put spread and a call spread with the same expiration and four different strikes. An iron condor can be thought of as selling a strangle instead of buying and also limiting your risk on both the call side and put side by building a bull put vertical spread and a bear call vertical spread.
  • Jade Lizard - a bull vertical spread created using call options, with the addition of a put option sold at a strike price lower than the strike prices of the call spread in the same expiration cycle.

Neutral trading strategies that are bullish on volatility profit when the underlying stock price experiences big moves upwards or downwards. They include the long straddle, long strangle, short condor and short butterfly.

Neutral trading strategies that are bearish on volatility profit when the underlying stock price experiences little or no movement. Such strategies include the short straddle, short strangle, ratio spreads, long condor and long butterfly.

COMMODITIES

1 Why trade in commodities?

One of the major advantages of future trading is that you can earn money without actually physically storing commodities. On the exchange, commodities are traded as future contracts. One of the major advantages of future trading is that you can earn money without actually physically storing (or buying and selling) commodities. Besides, the trading cost too is substantially low. Traders participate in commodities trading mainly because:

  • They do not need to pay the entire transaction amount for trading; only the margin amount is required
  • They can earn from short selling

Some of the other benefits of trading in commodities are

  • The commodities listed on this market mainly include metals, energy and agricultural products. This diversity provides opportunities for investors, hedgers, traders, manufacturers, arbitragers, importers and exporters to earn money.
  • The prices of commodities changes purely on demand and supply. This makes it really easy to understand the movements and exploit opportunities.
  • Commodities are traded all over the world. Putting your money in this kind of investment helps you diversify your portfolio
  • Unlike the Indian stock market, the Indian commodity market is open for 14 hours a day, covering timings of major commodity exchanges around the globe and giving you ample time to trade.

The fluctuation in the prices of commodities is caused by

  • Demand and supply
  • Currency movements
  • Commodities are traded all over the world. Putting your money in this kind of investment helps you diversify your portfolio
  • Crop sowing aspects
  • Economic forces
  • Weather
  • Crop arrival factors

2 Which commodities can I invest in?

Agricultural Commodities
  • Plantation Products
    • Rubber
    • Spices
    • Red Chilli
    • Jeera
    • Turmeric
    • Cardamom
    • Coriander
  • Cereals
    • Wheat
    • Barley
    • Maize
  • Oil and Oil Seeds
    • Castor Seeds
    • Cotton Seed Oilcake
    • Soy Seeds
    • Mustard Seeds
    • Soya Been
    • Crude Palm Oil
    • Kapasia Khalli
    • Refined Soya Oil
  • Others
    • Guar Seed
    • Gur
    • Sugar
    • Sugar M
    • Guargum
    • Mentha Oil
    • Potato (Agra)
    • Potato (Tarkeshwar)
    • Almond
Non-Agricultural Commodities
  • Metals
    • Aluminum
    • Aluminum Mini
    • Copper
    • Copper Mini
    • Iron Ore
    • Lead
    • Lead Mini
    • Mild Steel Ingot
    • Billets
    • Nickel
    • Tin
    • Zinc
    • Zinc Mini
  • Precious Metals (Bullions)
    • Gold
    • Gold Guinea
    • Gold M
    • Gold Petal
    • Gold Petal (New Delhi)
    • Platinum
    • Silver
    • Silver M and Silver Micro
  • Energy
    • Crude Oil
    • Natural Gas
    • Thermal Coal
    • Gasoline
    • Heating Oil
    • Brent Crude Oil
    • Electricity Monthly and Weekly
    • ATF
  • Weather
    • Carbon (CER)
    • Carbon (CFI)
  • Others
    • Polyvinyl Chloride
CURRENCY

1 Why trade in currencies?

The currency market is the largest and most liquid financial market In this market, one country’s currency is exchanged for that of another at a fixed price. With the advancement in technology and increased globalization, it is now possible for individuals, corporate entities, governments and almost anyone to take part in online currency trading. It offers two advantages to the traders: an opportunity to benefit from currency value fluctuations, and a chance to minimize loss from currency value fluctuations due to various factors. Currencies are traded in derivatives, specifically in futures and options. Here’s more about these methods.

Futures

Through Wealth Discovery, you can trade in currency futures on the National Stock Exchange (NSE). Futures trading allows you to enter into a contract (having a maximum period of 3 months), and take buy/sell positions in a currency of any country.

Trading in futures is not as complex as it sounds. If, during the contract period, the price moves as you had anticipated, you make a healthy profit, and vice versa.

Options

An option is a contract between two parties (the seller and the buyer) that gives the buyer the right to buy or sell shares at a specific price, on or before a particular date. There is no obligation on the buyer to complete the transaction if the price is not favorable to him. For this, the buyer has to pay to the seller some money called premium.

To carry out a transaction (buy/sell) position on Index/Stock options, one has to pay certain percentage of the order value as margin. There are two types of options: Call and Put. The former allows the trader to buy the underlying asset at a certain price, while the latter allows him to sell it at a certain price.

Key participants in the currency markets are
  • Corporate/small and medium enterprises (SMEs)
  • Authorized dealers/banks
  • Central bank – The Reserve Bank of India
  • Individual retail traders
  • Risk reversal - simulates the motion of an underlying so sometimes these are referred as synthetic long or synthetic short positions depending on which position you are shorting.n
  • Money Changers
Key reasons for currency movement
  • Trade and capital flows
  • Imports by oil marketing companies
  • Remittance by NRIs
  • Investment by offshore institutions in India
  • Indian offshore investments
  • Foreign Direct Investment (FDIs) and Foreign Institutional Investment (FII) flows
IPO

1 Who decides the price of an IPO?

The issuing company in discussion with the lead merchant banker (the institutions upon which rests the entire responsibility of managing the issue) decides the price. There is no set price formula prescribed by SEBI. However the company and the lead banker are required to give full explanation of the key assumptions taken into consideration while deciding the issue price.

In practice, there are two types of issues, one where the company and Lead Merchant Banker fix a price (called fixed price) and other, where there is a price band and rest is left to market forces to determine the final price.

2 What does 'price discovery through Book Building Process' mean?

Book Building is basically a process used in IPOs for price discovery of an offer. It is a method where, during the period for which the issue is open, different categories of investors apply at various prices based on their judgment, within the price band. The cut off is determined after the bid is closed to public.

3 What is Cut-Off Price in IPO?

In a Book building issue, the company that wishes to tap stock market for fresh funds is required to indicate the price band. The actual discovered issue price can be any price in the price band. This issue price is called ‘Cut-Off Price’. The issuer and lead manager, which is managing the issue, decides the cut off price after considering the issue size and the investors’ desire for the stocks.

ETF

1 What are ETFs?

ETF's are essentially the same as Mutual Funds but they trade like individual stocks. The price of a mutual fund scheme is determined by its Net Asset Value (NAV) at the end of a trading day. The price of an ETF fluctuates throughout the trading day as they are traded during the trading hours on a stock exchange.

2 Benefits of Investing in an ETF

Flexibility to trade: ETFs can be traded throughout the day on the stock exchange like individual stocks and hence provide liquidity to the customers.

Lower Costs: ETFs are listed on the stock exchange and generally have a less expense ratio than most mutual funds

Simple structure: ETFs are simple in structure and easy to understand.

Tax Efficiency: ETFs generally generate relatively low capital gains, because they typically have low turnover of their portfolio securities.

Diversification Investments in ETFs are widely diversified as indices are construed to represent performance of the stock market as a whole.

3 Which is the right ETF for me?

There are several criteria that one should look at while choosing the right ETF for their portfolio. Some of them are: Cost: Expense ratios can vary greatly even among ETFs tracking the same market. Everything else being equal, choose the ETF with the lower expense ratio, because costs directly affect your returns.

Benchmark When choosing an ETF, first decide on the market, market segment, or industry sector you wish to track, and then decide on the appropriate index for that market. Each index provider has its own construction methodology, resulting in wide variations in turnover and other portfolio characteristics. Benchmarks tracking the same market segment can deliver very different results.

Management team: : Index funds are not created equal. Effective, efficient portfolio management skills can make a difference, often offsetting marginal differences in costs between two indexed products. Review the experience and track record of the fund managers. Through Wealth Discovery’s platform, you can buy/sell any of the 100+ available mutual fund schemes from more than 5 mutual fund houses.

3 How to buy ETF's?

Lump sum Purchase

If you have decided which ETF is right for you, you can choose to buy them just like you would buy an individual stock. To obtain the list of ETF's please click here. Because ETFs trade like stocks, you will be charged a commission for each trade

Lump sum Purchase

ETF - SIP is first-of-its-kind comprehensive facility that provides an opportunity to invest systematically and in a disciplined manner in specified ETFs (Exchange Traded Funds) ETF - SIP averages the cost of purchase and help accumulate wealth over a long period of time

RGES

1 What are Eligible Securities under RGES

  • Equity shares falling in the list of securities declared as "BSE-100" or " CNX-100".
  • Equity shares of public sector enterprises which are categorised as Maharatna, Navratna or Miniratna by the Central Government
  • Units of Exchange Traded Funds (ETFs) or Mutual Fund (MF) schemes which have securities eligible under Rajiv Gandhi Equity Savings Scheme (RGESS) as underlying, provided they are listed and traded on a stock exchange and settled through a depository mechanism.
  • . Follow on Public Offer of eligible securities.
  • . New Fund Offers (NFOs) of eligible ETF's and mutual funds.
  • . Initial Public Offer of a public sector undertaking wherein the government shareholding is at least fifty-one per cent. which is scheduled for getting listed in the relevant previous year and whose annual turnover is not less than four thousand crore rupees during each of the preceding three years;
    • BSE 100 Index Scrips
    • PSU Maharatnas
    • PSU Navratnas
    • PSU Miniratnas
NRI

1 Who Is An NRI?

According to Sec. 6(1) of the Income Tax Act, an individual shall be a resident in India in any financial Year if he a) Is in India in that Financial Year for a period or periods totaling to 182 days or more Or b) Has been in India within the four preceding years for a period or periods totaling to 365 days or more and for a period of 60 days or more in that Financial Year.

2Who Is A PIO?

A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if: He/She at any time held an Indian Passport. OR He/She or either of his parents or any of his/her grandparents was a citizen of India; OR Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen (a) or (b) above.

3 What Are The Products Offered To NRI?

NRI can invest in the following products. Equity trading on BSE and NSE Derivatives trading on the NSE IPO Portfolio Management Investments in Mutual Funds

4 What Steps An NRI Needs To Take To Start Investing In The Indian Stock Market?

Acquire Pan Card or provide existing PAN Card Number. Establish NRE/ NRO Bank Account - Savings and PIS account with designated bank which is approved by RBI for this purpose. Establish Demat account with broker and start trading

5What Type Of Saving Bank Account(S) Can Be Opened By An NRI Or PIO In India?

Any NRI/PIO can open two types of savings accounts with any bank in India. They are NRE and NRO bank accounts.

6What Is A NRE Account?

A NRE bank account is an external saving bank account opened for Non resident Indians. This is why it is known as Non-Resident External account. Since it is an external account, any monies lying in NRE account can be taken outside the country or in other words, the monies lying in NRE account are fully repatriable. This money can be converted into any foreign currency at the behest of the account holder and can be remitted outside the country.

7What Is A NRO Account?

A NRO bank account is an ordinary saving bank account opened for Non resident Indians. This is why it is known as Non-Resident Ordinary account. Since it is an ordinary account i.e. as good as a normal saving bank account, monies lying in NRO account cannot be taken outside the country or in other words, the monies lying in NRO account are not repatriable.

8Can Money Be Transferred From NRE Account To NRO Account?

Yes money can be freely transferred from NRE account to NRO account.

9Can Money Be Transferred From NRO Account To NRE Account?

No, money cannot be transferred from NRO account to NRE account.

10What Is The Status Of NRO/NRE Accounts On The Return Of The Account Holder To India?

RBI has advised banks to re-designate such accounts as resident accounts on return of the account holder to India.

Note : The login for trading and reporting will be the same but passwords will differ.
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