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Options trading is a type of derivatives trading where traders buy the right (but not the obligation) to buy or sell an underlying asset—such as stocks, indices, or commodities—at a fixed price before a specified date.
This right is granted through an “option contract,” which is of two types:
Options are traded heavily on Indian exchanges like NSE and BSE, with regulatory oversight by SEBI. Whether you're a retail trader or an institutional investor, options provide flexible opportunities to hedge risk, speculate on market direction, or generate income.
Options help protect your portfolio. If you own stocks and fear a market downturn, buying a Put Option acts as insurance.
Example: You hold ₹5L worth of Reliance shares. You can buy a Put Option at ₹2,500 to sell if prices fall, capping your losses.
Want to benefit from short-term price movements? Options let you trade directionally without needing full capital exposure.
Example: You expect Nifty to rise from 22,000 to 22,500. You can buy a Call Option for a small premium and benefit from the move.
Strategies like Covered Calls can earn passive income on stocks you already own.
You own the stock and sell a Call Option to earn a premium.
You own the stock and buy a Put Option to hedge downside.
Buy both a Call and Put at same strike. Profits in volatility, regardless of direction.
Buy a lower strike Call, sell a higher strike Call. Limits both loss and profit.
✅ Pro Tip: Always backtest strategies and understand your risk appetite. Options can lose 100% of premium if not exercised in time.
Always backtest strategies, stay updated with market trends, and never overleverage.
Say you buy a Call Option on Infosys at a strike of ₹1,500 with a premium of ₹30, and Infosys goes to ₹1,580.
Your profit = (₹1,580 - ₹1,500 - ₹30) × Lot size
= ₹50 × Lot size (say 300) = ₹15,000
But if Infosys stays below ₹1,500, your maximum loss is just ₹30 × 300 = ₹9,000
Yes. It's regulated by SEBI and traded on NSE and BSE.
Yes. You can buy/sell options contracts independently of the underlying.
Yes, especially if misused. However, it can be safe and strategic when used for hedging.
Profits from options are taxed as business income under Income Tax Act.
Yes, but only after understanding concepts and starting small with proper risk management.
Swastika, a SEBI-registered and trusted Indian broker, offers:
🧠 Ready to trade smart with confidence?
👉 Start your options trading journey with Swastika
The distinction between investment banking and commercial banking is a common query among those seeking clarity about the banking system.
In India, banking is integral across all levels of society, from high-profile businessmen to middle-class families and even those in poverty. Bank accounts are essential for everyday financial transactions, including deposits and withdrawals.
Commercial Banking:
Commercial banking, often referred to as retail banking, involves providing financial services to individuals and businesses. These services include accepting deposits, offering savings and checking accounts, providing loans and mortgages, and offering other basic financial products. Commercial banks generate revenue primarily through the interest they earn on loans and the fees they charge for their services.
Key Functions of Commercial Banking
Regulatory Framework
Commercial banks are regulated by the Reserve Bank of India (RBI) under the Banking Regulation Act, 1949. The RBI ensures the safety and soundness of the banking system through measures like capital adequacy norms, asset classification and provisioning standards, and corporate governance requirements. Commercial banks in India are regulated by the Reserve Bank of India (RBI) under the Banking Regulation Act, 1949. The RBI ensures the safety and soundness of the banking system through measures like capital adequacy norms, asset classification and provisioning standards, and corporate governance requirements.
Investment Banking:
Investment banking, on the other hand, differs significantly from commercial banking. They specialize in helping organizations raise capital and provide financial advisory services. Investment banks act as intermediaries between entities seeking capital (such as corporations and SMEs) and those looking to invest (HNIs and institutional investors).
Key Functions of Investment Banking
Regulatory Framework
Investment banks operate under a different regulatory framework compared to commercial banks. The Securities and Exchange Board of India (SEBI) regulates investment banking activities under the SEBI Act, 1992, and the various regulations issued thereunder. Additionally, the RBI oversees certain aspects of investment banking operations, especially for banks engaged in these activities.
Key Differences between Investment Banking and Commercial Banking
Clientele: Commercial banks serve the general public and businesses, whereas investment banks cater to large corporations, governments, and institutional investors.
Services Provided: Commercial banks focus on deposit-taking, lending, and basic financial services, while investment banks specialize in complex financial transactions like underwriting, M&A advisory, launching IPOs, valuations of companies, and trading.
Revenue Sources: Commercial banks earn revenue from interest on loans and service fees, while investment banks generate income through fees from underwriting, advisory services, trading profits, asset management fees, and fund raising fees.
Regulation: Commercial banks are regulated by the RBI to ensure stability and protect depositors, with a focus on capital adequacy and risk management. SEBI regulates investment banks to ensure market integrity and protect investors, with a focus on transparency and reducing systemic risk.
Risk Exposure: Commercial banks face credit risk from loan defaults and interest rate risk. Investment banks face market risk, liquidity risk, and operational risk due to their involvement in trading and complex financial activities.
Conclusion
While both investment banking and commercial banking are essential components of the financial system in India, they serve different purposes and operate in distinct ways. Commercial banks are the backbone of everyday financial transactions and credit provision for individuals and businesses. In contrast, investment banks are the architects of capital markets, enabling large-scale funding and facilitating major corporate transactions. Understanding these differences is crucial for anyone looking to engage with the financial sector in India, whether for personal finance, corporate finance, or investment purposes.
The insurance industry is a key factor of the economic system with the aid of using distinctive features of the number of premiums it collects, the size of its funding and, fundamentally, it plays a crucial social and economic function as it helps in overlaying private and commercial enterprise risks.
The below details encompass Insurance penetration throughout distinctive nations. The insurance penetration for your information is measured as the ratio of premium to GDP.
It's far ranked as in the top 10 nations of the world for its insurance penetration. The premium of the U.S. is the most important at the global level.
The insurance density which is the premium in line with capita is ranked lower because of the huge population of the United States. At the same time, the rating of the insurance penetration (premium/GDP) is even lower because of the excessive economic improvement level.
Many developed nations together with Japan, U.K., France and Germany share similar traits as that of the U.S.A. The United Kingdom generated margins above 10 percent. The claims ratio within side the UK’s medical health insurance zone has been solid historically, which has helped to keep the boost in the insurance market.
The largest markets in medical health insurance, together with France, Germany, and the Netherlands, had a net earnings margin of approximately 2 per cent on average within the 2015–16 time frame, however, it's far on a declining trend, because of excessive opposition that drives pricing and margin downwards. In rising markets, personal medical health insurance premiums are a small per cent of general health expenditure and are drastically lower than the extra classes of expenses.
In financial 2017, life insurance businesses in Japan had earnings of ¥33.7 trillion from insurance premiums. Although this amount was developing steadily in view that financial 2002, it has declined during the last years in a row.
Changes in household composition have reduced the want for huge death benefits aimed toward heads of households. Meanwhile, the need for 0.33 per cent of insurance together with clinical and nursing care merchandise is increasing.
The Changes in household composition because of the declining birthrate, ageing population, and overdue marriage have helped the Italy insurance market get more attention through people.
Global distribution tendencies range with the aid of using product and vicinity. In life coverage, whilst banc assurance dominates the distribution area in lots of Asian and European geographies, however, we see a speedy boom within the reputation of direct distribution modes in lots of geographies.
Analyses of the overall performance of direct players, in a few geographies, additionally screen that they're capable of outperforming their markets.
As is discovered from these numbers, even though the premium of China is amongst the most important within the global market, the ranking of China's insurance density commonly known as the premium in line with capita has gone to drastically lower levels because of the very huge population. The insurance penetration is rated much better than the insurance density because of the especially low economic improvement level.
The penetration for life coverage in India is 2.82%, and the penetration for non-life insurance has gone lower and now stands at 0.94%. Globally, coverage penetration turned into 3.35% for the life insurance section and 3.88% for the non-life insurance section.
Companies searching for the top market have gained an increase in possibilities within the international insurance markets. maximum providers may even want to go looking farther afield.
Looking ahead, on the geographic level, Latin America and the Middle East are anticipated to be the fastest-growing nearby markets, the top line of the insurance market is anticipated to develop health insurance as its fastest-growing section.
सोने- चांदी के भाव पिछले सप्ताह जैक्सन होल सिम्पोसियम के होने के कारण एक सीमित दायरे में ही रहे और कीमती धातुओं में कारोबार का दायरा सकारात्मक रहा। अमेरिका की 10 साल बांड उपज बढ़कर 1.34 प्रतिशत हो गई है।
डॉलर की तुलना में रूपया पिछले सप्ताह में 0.37 प्रतिशत मजबूत हुआ है जबकि डॉलर इंडेक्स जो सोने की विपरीत दिशा में चलता है, 0.82 प्रतिशत की गिरावट दर्ज की गई है। अमेरिका से जारी बेरोज़गारी के दावे और प्रिलिम जीडीपी के आंकड़े अनुमान से कमजोर दर्ज किये गए।
दूसरी ओर, अफगानिस्तान में बदतर होती परिस्थिति के कारण निवेशकों का भरोसा सोने में बना हुआ है। कच्चे तेल के भाव में 300 रुपये प्रति बैरल की तेज़ी पिछले सप्ताह में देखि गई है जिससे सोने के भाव को सपोर्ट मिला है।
शुक्रवार को हुए जैक्सन होल सिम्पोजियम के भाषण मे पॉवेल के मुताबिक इस बात पर विश्वास करने का कोई कारण नहीं है कि मूलभूत अवस्फीति के कारण अचानक बदल गए हैं, और मुद्रास्फीति लगातार घटने की संभावना है।
श्रम बाजार में पर्याप्त सुस्ती और महामारी जारी रहने के साथ, गलत समय पर नीतिगत कदम विशेष रूप से हानिकारक हो सकता है। संपत्ति खरीद कार्यक्रम इस साल के अंत तक घटाया जा सकता है लेकिन सीधे तोर पर ब्याज दर वृद्धि के संकेत नहीं है।
फेड प्रमुख जेरोम पॉवेल के बयां के बाद कीमती धातुओं में निचले स्तरों से उछाल देखा गया। और अक्टूबर वायदा सोना निचले स्तरों से 400 रुपये मजबूत होकर 47200 रुपये प्रति दस ग्राम पर रहा।
इस सप्ताह कीमती धातुओं में तेज़ी रह सकती है। सोने में 46700 रुपये पर सपोर्ट है और 48000 रुपये पर प्रतिरोध है। दिसंबर वायदा चांदी में 62500 रुपये पर सपोर्ट और 64500 रुपये पर प्रतिरोध है।
Treasury bonds can turn out to be a good investment for the ones who seek stable returns or for those who are close to retirement. Are treasury bonds a good investment choice?
Investors consider several factors before applying for a bond: these factors include the type of bond, the amount the interest the bond pays, and the time duration their investment will be tied up.
Apart from these factors, there are other things also which can bear risk tolerance with a bond’s risk of default. These bonds are guaranteed by the US government.
US Treasury bonds are also a type of fixed income type that help investors to get guaranteed returns.
Fixed income refers to those investment securities that pay a fixed sum of interest or dividend payments till their maturity date. Government and fixed income bonds are considered as one of the safest fixed income instruments in the world.
A bond is a debt security issued by an investor to a borrower. Here, the investors are: governments and organizations where they raise funds by issuing bonds and borrowers are the ones who purchase these securities and in turn achieve a significant amount of interest from the government.
It may be noted that the government pays you the principal amount on the date of maturity.
If you want to diversify your portfolio with the purpose of equity, you need to consider bonds as an asset class. Just like the equity trading market where investing comes with profits and loss, investing in bonds also has its good or bad.
Here are some of the pros and cons:
Before taking a deep dive into bonds, let’s take a look at the terminologies:
The amount of bond will be worth only at its maturity. It is the reference amount that the issuer issues while calculating the interest payments. For instance, if someone purchased a bond worth $1K, that becomes the face value of that bond.
The rate of interest issuers will pay on the face value of the bond. A coupon rate of 5% will mean the bondholder will receive 5% every year on the $1K invested.
Dates on which the bond issuer will pay interest. The coupon date can be monthly, quarterly, annually.
The date at which the bond will mature and the bond issuer will return the face value of the bond.
An expense ratio is an annual fee a fund charges to cover its expenses. For instance, if an ETF has an expense ratio of 1%, it means the fund uses 1% of the assets to cover the expenses.
Bonds are classified through their credit ratings of which the highest quality of bonds are classified as investment grade.
Under this category, bonds are issued by the US government and stable blue-chip companies. Different bonds are available and therefore it is up to you which bond you want to invest in. Bonds that have poor credit ratings have a higher risk of default.
High rated bonds are rated as AAA while D means default. Bonds that come with a longer maturity date usually have a higher rate of interest. This is because such bonds have bondholders to default risk that can be extended for a longer period.
Agencies like S&P, Moody’s, and CRISIL have the authority to give credit ratings to bonds.
US government bonds are generally issued by the federal government for a specific duration. These bonds are considered as less defaulter and therefore they carry the lowest rate of default. The bonds that the US Treasury issues are known as T-bills or treasury bills.
Treasury bills are a type of government bond at which the maturities start from a few days to 52 weeks. These short term government bonds are sold at a discount from their face value.
These bonds have a tenor of 20 or 30 years as these bonds pay interest every six months.
Government securities are issued with maturities of two, three, five, seven and ten hours.
There are securities that are issued with maturities of five, 10 and 30 years. These securities pay interest every six months. The only difference from the bonds is that the issuer adjusts the principal of such securities based on the Consumer Price Index (Consumer Price Index).
FRNs are issued for a two years term and pay interest to their shareholders on a quarterly basis. The interest rates rise and fall which is based on discount rates for 13-week Treasury bills.
These are low-risk savings products that not only earn interest but also protect you from inflation fluctuations.
These are savings products that pay interest based on current market rates until 30 years or you cash them.
ETFs are the easiest way to invest US treasuries and corporate bonds as these are very lost cost securities than other securities. These types of investments are made under the Liberalized Remittance Scheme of the RBI.
Below is a list of some ETFs of different tenors that you can consider for investing in US Treasuries.
This ETF tracks treasury bonds with short term maturities ranging from 1-3 years. The fund carries an expense ratio of 0.15%. It has total assets worth $19.5 2B and a dividend yield of 0.46%.
The fund offers exposure which has a tenure of three to 10 years. The fund has the lowest expense ratio at 0.05%. This ETF has assets worth $7.62B under management.
This ETF records an index that offers exposure to US treasuries having a maturity of 10 years and more. It carries minimal credit risk but a significant amount of risk associated with it. The fund has an expense ratio of 0.06% and has an AUM of $3.56.
Bonds can be considered as the safest yet most trusted investment security irrespective of age. This is because bonds can provide income, safety, and help to minimize the risk in an investment portfolio.
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Starting a business is challenging, similar to navigating a ship through turbulent seas. In today's technology-driven world, innovative ideas have the potential to create significant impact, with thousands of startups emerging each year, promising to revolutionize various sectors. However, many of these startups fail within two to three years despite their promising beginnings. Understanding why this happens, the steps necessary for success, and how investment bankers can support these ventures is crucial for any entrepreneur.
What is an Investment Bank?
An investment bank primarily helps companies, including startups, access capital markets to raise money for growth and other business needs. Unlike commercial banks that offer loans at fixed interest rates and are subject to regulatory limits on lending, investment banks offer a broader range of financial services and are not as restricted by lending limits. This makes them particularly valuable for startups needing substantial funding.
Key Services Provided by Investment Banks
Beyond fundraising, investment banks conduct thorough research, analyze company valuations, and provide accurate data for business expansion. They also help startups determine how much capital is required and map out their financial structure.
How Investment Banking Works for Startups
Investment banks are crucial for startups as they provide the necessary capital and strategic advice to help these new ventures grow and succeed. Here's how they work:
Detailed Due Diligence
Before partnering with a startup, investment bankers conduct extensive research and due diligence. This involves reviewing the startup's business model, financial projections, market potential, and competitive landscape. This ensures that the startups they present to potential investors are robust and have a high likelihood of success.
Fundraising Strategies
Investment bankers are adept at crafting fundraising strategies that meet the specific needs of a startup. They identify the best sources of capital, whether through equity, debt, or hybrid instruments, and structure the deals to maximize the startup's financial health and growth potential.
Building Investor Relationships
Investment bankers have extensive networks of potential investors, including venture capitalists, private equity firms, and institutional investors. They leverage these relationships to connect startups with suitable investors, facilitating deals that might not have been possible otherwise.
Advisory Services
Beyond raising capital, investment bankers provide valuable advisory services. They help startups with financial planning, corporate restructuring, and strategic decision-making, ensuring that the business is well-positioned for long-term success.
Why Should Startups Engage with Investment Bankers?
Engaging with investment bankers can provide startups with several advantages:
To illustrate the impact of investment banking on startups, let's look at a few success stories in India:
Flipkart, one of India's largest e-commerce platforms, benefited significantly from investment banking services. Early on, Flipkart raised substantial funds through multiple rounds of equity financing, facilitated by investment banks. These funds allowed Flipkart to scale rapidly, expand its product offerings, and improve its logistics and supply chain management.
Paytm, a leading digital payment platform in India, also leveraged investment banking services to fuel its growth. Investment banks helped Paytm raise billions of dollars in capital from prominent investors, enabling it to diversify its services, enter new markets, and compete with global giants like Google Pay and Amazon Pay.
Ola, a popular ride-hailing service in India, used investment banking to secure funding from international investors. This capital infusion allowed Ola to expand its fleet, enhance its technology platform, and extend its services to smaller cities and towns, solidifying its market position.
While engaging with investment bankers can provide significant advantages, startups should also be aware of potential challenges:
1. Cost: Investment banking services can be expensive, with fees based on the capital raised or the complexity of the transaction. Startups need to weigh these costs against the benefits.
2. Dilution of Ownership: Raising equity capital often involves issuing new shares, which can dilute the ownership of existing shareholders. Startups need to carefully consider the implications of this dilution.
3. Regulatory Compliance: Navigating the regulatory landscape can be complex, especially for startups unfamiliar with the requirements. Investment bankers can help ensure compliance, but startups must still be diligent in understanding their obligations.
4. Alignment of Interests: It's crucial for startups to find investment bankers whose interests align with their own. Misalignment can lead to conflicts and suboptimal outcomes.
Investment banking can be a powerful tool for startups in India, providing access to capital, strategic advice, and valuable networking opportunities. By understanding the services offered by investment banks and how they can support growth, startups can better navigate the challenging landscape of entrepreneurship. Engaging with investment bankers requires careful consideration of costs, regulatory requirements, and the alignment of interests, but the potential benefits can far outweigh the challenges. As illustrated by success stories like Flipkart, Paytm, and Ola, the right partnership with an investment bank can propel a startup to new heights, turning innovative ideas into successful, sustainable businesses.
Stock trading can be very profitable, especially if you stick with it for a long time. To be successful, it's important to understand things like a company's financial health and its real value.
Trading has been around for a long time, starting with the barter system where people traded goods directly with each other. This old form of trading laid the groundwork for the modern stock market.
The stock market is a place where people buy and sell shares of companies. These shares represent part ownership in the business. The first modern stock exchange started in Amsterdam in 1602, where people traded shares of the Dutch East India Company.
Derivatives, which are contracts based on the value of an asset, were first traded in 1607 by a single company. Dividends, or profits shared with stockholders, were given out a few years later. Amsterdam was also the birthplace of futures and options trading.
Today, more and more people are getting interested in the stock market, even those who don’t have much experience. Many see trading as a good way to grow their wealth.
Staying consistently profitable in trading is the goal of every trader, but the journey isn’t always smooth. However, by following some proven strategies, you can increase your chances of staying in the green. Here are ten tried and tested trading strategies to help you stay in profit, explained in simple language.
The foundation of successful trading is having a clear goal and a solid plan. Before you even make your first trade, know what you want to achieve.
A stop-loss order is a tool that automatically sells your stock if it drops to a certain price, preventing further losses.
Diversification means spreading your investments across different assets or sectors to reduce risk.
Trend trading is a strategy where you make decisions based on the direction of the market.
Risk management involves controlling the amount of money you expose to potential loss on any given trade.
Emotions like fear and greed can cloud your judgment and lead to poor trading decisions.
Markets are constantly changing, so it’s important to review your trading strategy regularly.
Support and resistance levels are key concepts in technical analysis that can help you make better trading decisions.
Technical indicators like moving averages, Relative Strength Index (RSI), and MACD can provide insights into market trends and potential entry and exit points.
The financial markets are influenced by various factors, including economic data, geopolitical events, and market sentiment. Staying informed helps you anticipate potential changes.
Trading for profit requires discipline, knowledge, and the right strategies. By setting clear goals, managing risk, following trends, and staying updated, you can increase your chances of consistent profitability. Remember, no strategy guarantees success, but these ten tried and tested methods can significantly enhance your trading outcomes.
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