A new Life, A new Career, A new Dream - I am a Trader
- Thread starter Taiki
- Start date
Hi Jagan bro,
Let me summarize the entire post to see if i got all the points right. Please correct me if i am missing something.
STT is applied on both the legs for a trade and is unavoidable. And when we take trading as a business we should consider of reducing our cost to minimum. And there selecting the right instrument comes into picture.
In your case ventura is charging brokerage of 40 rs on the buy side and 40 rs on the sell side.And again service tax on brokerage approximate 5 + 5.
For one trade ie if buy sell 1 Lot of Nifty you are paying 100 rs to the broker alone.
Again STT is for 290000 rs.
Transaction charges - NSE
Sebi charges.
Educational cess.
http://www.traderji.com/beginners-g...an-brokerage-stock-exchange-transactions.html
The STT percentage has been reduced to 0.010 % from 0.017%.
STT is on the sell side only.
But STT is applied on the notional value of the contract ie say Nifty @
5800 - so stt is applied for 2 Lakh and 90,000 rs.
But where as for options it is just - say premium of 5800 call is 80 rs.
It is just for 50 * 80 = 4000 rs only.
A straight saving on the tax front between 290,000 vs 4000 rs.
On expiry date avoid trading expiry options.
2. STT applied over option trades are way too cheaper that FUT. and ITM/Deep ITM option almost gives similar returns as FUT but at a lower STT rate.
Correct.
3. Some stock specific trade can give much more return than NIFTY index.
Nope - Pls stick on to Nifty.Since you are comfortable trading Nifty.
I should'nt have mentioned about the Nifty price band.
Stock options are less liquid.
Options trading is better compared to Futures Trading.
Less risk and more liquid (only Index options).
Less risk means - if your Stop loss is not triggered and Nifty jumps down much lower in a minute or 2 drastically.
Our ITM option will become ATM and hence will have some premium and hence risk is less compared to trading Naked Nifty.
What I meant to say is trading Options are much better than futures trading.
My thoughts
- I completely agree with you on these points. Currently I am with Ventura Securities, where I am also paying more brokerage too along with STT. and I need to switch to some discount broker for reducing the brokerage. In a month I will switch to a discount broker. (RKSV/TradeSmartOnline).
- I have also noticed the movement of deep in the money options and they almost move for the same points as with Nifty index. And that's why I had chosen option in the initial days. But I found is options were being too volatile sometimes. And then i changed to FUT keeping my system and strategy same. But I need to look back and analyse my option trades from last 2 weeks and to check where I went wrong.
- On Nifty vs Stock specific trades, As this is my first step in trading as a career, I had decided to start only with Nifty atleast for first quarter. After first three successful months this will give me confidence to add some stocks(Nifty movers/draggers).
And regarding annual Tax returns, STT I have few other questions too, and i had not thought about this. But let me search more on them first, and let me go through the TJ Taxation section. I will come with my question after that.
Thanks again
Taiki
Let me summarize the entire post to see if i got all the points right. Please correct me if i am missing something.
STT is applied on both the legs for a trade and is unavoidable. And when we take trading as a business we should consider of reducing our cost to minimum. And there selecting the right instrument comes into picture.
In your case ventura is charging brokerage of 40 rs on the buy side and 40 rs on the sell side.And again service tax on brokerage approximate 5 + 5.
For one trade ie if buy sell 1 Lot of Nifty you are paying 100 rs to the broker alone.
Again STT is for 290000 rs.
Transaction charges - NSE
Sebi charges.
Educational cess.
http://www.traderji.com/beginners-g...an-brokerage-stock-exchange-transactions.html
The STT percentage has been reduced to 0.010 % from 0.017%.
STT is on the sell side only.
But STT is applied on the notional value of the contract ie say Nifty @
5800 - so stt is applied for 2 Lakh and 90,000 rs.
But where as for options it is just - say premium of 5800 call is 80 rs.
It is just for 50 * 80 = 4000 rs only.
A straight saving on the tax front between 290,000 vs 4000 rs.
On expiry date avoid trading expiry options.
2. STT applied over option trades are way too cheaper that FUT. and ITM/Deep ITM option almost gives similar returns as FUT but at a lower STT rate.
Correct.
3. Some stock specific trade can give much more return than NIFTY index.
Nope
- Pls stick on to Nifty.Since you are comfortable trading Nifty.I should'nt have mentioned about the Nifty price band.
Stock options are less liquid.
Options trading is better compared to Futures Trading.
Less risk and more liquid (only Index options).
Less risk means - if your Stop loss is not triggered and Nifty jumps down much lower in a minute or 2 drastically.
Our ITM option will become ATM and hence will have some premium and hence risk is less compared to trading Naked Nifty.
What I meant to say is trading Options are much better than futures trading.
My thoughts
- I completely agree with you on these points. Currently I am with Ventura Securities, where I am also paying more brokerage too along with STT. and I need to switch to some discount broker for reducing the brokerage. In a month I will switch to a discount broker. (RKSV/TradeSmartOnline).
- I have also noticed the movement of deep in the money options and they almost move for the same points as with Nifty index. And that's why I had chosen option in the initial days. But I found is options were being too volatile sometimes. And then i changed to FUT keeping my system and strategy same. But I need to look back and analyse my option trades from last 2 weeks and to check where I went wrong.
- On Nifty vs Stock specific trades, As this is my first step in trading as a career, I had decided to start only with Nifty atleast for first quarter. After first three successful months this will give me confidence to add some stocks(Nifty movers/draggers).
And regarding annual Tax returns, STT I have few other questions too, and i had not thought about this. But let me search more on them first, and let me go through the TJ Taxation section. I will come with my question after that.
Thanks again
Taiki
EOD Summary
A good day, Did two trades, got profit in one while exited the other at cost.
Nifty-FUT 10 min chart
As I have mentioned earlier that I had missed the shorting opportunity yesterday around 5810-5815 level, and today I was waiting for the next signal. When Nifty reached 5810, situation was still favouring a down move. So shorted NF at 5806, with a tight stop loss at 5811 (Marked as the yellow downward arrow). The target was 5790, and 5770. I exited the trade at 5790. The reason for exiting is by that time Nifty had already established the sideways range for the day. And a reversal pattern appeared in 10 min chart.
Second trade was the break out trade, but exited the same at cose during the third red candle, after formation of a doji.
Trades
1. Sold NF @5806, Stop loss = 5811, Exited @5790.
2. Bought NF@5816, Stop loss = 5811, Exited @5816.
Net gain = +14 points. (Brokerage is to be cut)
Thoughts & Lessons
- The reason for not entering the short trade yesterday was, I though the red candle to be a last hour sell off. So did not give importance to that as that signal had come around 3-3:30 PM. I was little light also after good profit yesterday. So I let that go. Need to be careful for similar thoughts in future.
A good day, Did two trades, got profit in one while exited the other at cost.
Nifty-FUT 10 min chart
As I have mentioned earlier that I had missed the shorting opportunity yesterday around 5810-5815 level, and today I was waiting for the next signal. When Nifty reached 5810, situation was still favouring a down move. So shorted NF at 5806, with a tight stop loss at 5811 (Marked as the yellow downward arrow). The target was 5790, and 5770. I exited the trade at 5790. The reason for exiting is by that time Nifty had already established the sideways range for the day. And a reversal pattern appeared in 10 min chart.
Second trade was the break out trade, but exited the same at cose during the third red candle, after formation of a doji.
Trades
1. Sold NF @5806, Stop loss = 5811, Exited @5790.
2. Bought NF@5816, Stop loss = 5811, Exited @5816.
Net gain = +14 points. (Brokerage is to be cut)
Thoughts & Lessons
- The reason for not entering the short trade yesterday was, I though the red candle to be a last hour sell off. So did not give importance to that as that signal had come around 3-3:30 PM. I was little light also after good profit yesterday. So I let that go. Need to be careful for similar thoughts in future.
Thank you for the clarification Jagan bhai,
So things to do for me :-
- Switch to a discount broker
- Analyse the option trades for last 2 weeks.
And yes, when i mentioned about Stock specific trades vs Nifty, I meant about stock FUT, i did not write it there. I had tried trading stock option before and was not comfortable with them due to less liquidity.
Thank you again
So things to do for me :-
- Switch to a discount broker
- Analyse the option trades for last 2 weeks.
And yes, when i mentioned about Stock specific trades vs Nifty, I meant about stock FUT, i did not write it there. I had tried trading stock option before and was not comfortable with them due to less liquidity.
Thank you again
EOD Update
A bad day, but got a good lesson. Tried to be more smart. But forgot market is smarter than me. Did only one trade and lost 10 points.
For gap down, and with no overnight short position, my system was signalling me 5740-5760 as a good position to enter short. But I was not sure of if Nifty would bounce to that level. So I was just waiting patiently to get a good entry. But when Nifty bounced a little from 5864, emotion started playing a big role. And I took long position anticipating a double bottom and reversal. As a result, got stopped out and lost 10 points.
Trades
1. Bought NF @5690, Stop loss = 5680, Exit @5680.
Loss of -10 Points
Thoughts and Lessons
- Do not assume/predict the market, If you start doing the same, then you will want to see what your mind wants, but you will surely miss the picture what chart is showing. It is better to go with the flow instead of anticipation.
- Do a trade only after you get proper signal, and evidence. May be in that process you will miss 5/10 points from the low. But the trade will be a high probable trade.
- May be last few day's good trades put me in such situation today, need to be disciplined, and need to throw away all the emotion once the trading hour starts. No matter what was the result of previous day/trade.
So leaving things behind, and taking lessons, waiting for a fresh start tomorrow. And glad to see many of my friends making good profit today on a superb downfall.
Good night
Taiki
A bad day, but got a good lesson. Tried to be more smart. But forgot market is smarter than me. Did only one trade and lost 10 points.
For gap down, and with no overnight short position, my system was signalling me 5740-5760 as a good position to enter short. But I was not sure of if Nifty would bounce to that level. So I was just waiting patiently to get a good entry. But when Nifty bounced a little from 5864, emotion started playing a big role. And I took long position anticipating a double bottom and reversal. As a result, got stopped out and lost 10 points.
Trades
1. Bought NF @5690, Stop loss = 5680, Exit @5680.
Loss of -10 Points
Thoughts and Lessons
- Do not assume/predict the market, If you start doing the same, then you will want to see what your mind wants, but you will surely miss the picture what chart is showing. It is better to go with the flow instead of anticipation.
- Do a trade only after you get proper signal, and evidence. May be in that process you will miss 5/10 points from the low. But the trade will be a high probable trade.
- May be last few day's good trades put me in such situation today, need to be disciplined, and need to throw away all the emotion once the trading hour starts. No matter what was the result of previous day/trade.
So leaving things behind, and taking lessons, waiting for a fresh start tomorrow. And glad to see many of my friends making good profit today on a superb downfall.
Good night
Taiki
TraderRavi; said:
where are u waiting..........ghar ni jana hai kya aaj ..........
NOW has got me mad for the whole evening. Ventura's pointer was too simple and straight forward. Need to learn a lot of things for NOW.
Similar threads
-
-
Glenmark Life Sciences IPO opens today on July 27.- Started by Chittorgarh
- Replies: 0
-
Reg - Obtain Lifetime Free Robo Plugin from me for AMIBROKER for Paper Trade Mode....
- Started by pkgmtnl
- Replies: 3
-
-
Here is Practical Explanation about Next Life, Purpose of Human Life, philosophical/religious facts,
- Started by tarada
- Replies: 47