How to option trading kotak securities

The premium payable is a small amount that is also market driven. This is because the writer of the option assumes the risk that the market price will rise beyond your strike price on or before the expiry date of your contract and he will be obliged to sell you shares at the strike price, although it means making a loss of money. The former gives you the right to buy shares or an index whereas the latter gives you the right to sell them, with no obligation. On the basis of whether you want the option to buy shares or sell them at a specific price in the future, there are two types of options available in the derivatives markets. However, you are reluctant to purchase Reliance in the cash market as it involves too large an investment and you would rather not purchase it in the futures market as futures leave you open to an unlimited risk, in case the market goes against you. In the Indian market, Options cannot be sold or purchased on any and every stock. Depending on what is available in the Options market, you may be able to buy a Call Option of Reliance at a strike price of 970, although the spot price is Rs 950 at present, by paying a premium of Rs 10 per share. Yet you do not want to lose the opportunity to benefit from this rise in price due to the announcement and you are ready to stake a small sum of money to rid yourself of the uncertainty. An Option is ideal for you. These stocks are chosen from amongst the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six months on a rolling basis, amongst other technical criteria.

Reliance consists of 600 shares. If the AGM does not result in any spectacular announcements and the share price remains static at Rs 950 or drifts lower to Rs 930 because market players are disappointed, you could allow the Call Option on Reliance to lapse. Suppose the AGM of RIL is due to be held shortly and you believe that an important announcement will be made at the AGM. SEBI has permitted Options trading on only certain stocks that meet its stringent criteria. How to activate an account? How to convert your MF holdings to Online format? How to Place OTB Order? How to place an order for an IPO? How to Transfer Money into your trading account?

How to Place Super Multiple Limit Order? How to transfer money from bank to Mutual Fund? Welcome to our Demo Center. How to Cancel Margin Trading Facility Order? How to Modify Margin Trading Facility Order? How to invest in a Systematic Investment Plan? How to transfer money from bank to IPO? How to place GTC Orders?

These demos have specially been designed to facilitate you understand all aspects of online trading. How to Place Margin Trading Facility Order? How to modify GTC Orders? PMS INP000000258 and Research Analyst INH000000586. All disputes arising out of or in connection with this Offer are subject to the exclusive jurisdiction of courts in the city of Mumbai only. Derivatives, now may be a Shubh time!

In case of any dispute the decision of the management of Kotak Securities Ltd. Kotak Securities reserves the right to modify the terms and conditions or withdraw the offer at any point of time, which will be communicated to the clients through email or website. Research SMS facility: SMS Alerts at Rs. Lakh is compulsory for this offer. CIN: U99999MH1994PLC134051, Telephone No. Technical Research, you receive them just at Rs. Flat brokerage of Rs. For annual subscription, you get further benefits that make it much economical. Derivatives are a sophisticated investment device. This offer is not applicable to Non Resident Individuals.

Investments in securities are subject to market risk; please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. While for trading in Cash segment, we will accept margin in the form of cash, securities and any other acceptable form of margin. The investor is required to take into consideration all the risk factors before actually trading in derivative contracts. Cash Margin of Rs. While for trades in Cash segment and Futures, our standard pricing will be applied which is first 20 calls will be free and Rs. Trade facility will be charged at Rs. This scheme is independent and is not to be merged with any other offer or schemes. All you need to do is bring a minimum cash margin of Rs. STT, GST and other charges will be charged as per the rates mentioned in the link below. Refer Account Opening Form for charges on other services. While Option contracts offer immense trading possibilities since these products can be used in tandem with stock futures or equity shares for the construction of various derivative strategies. Here are some commonly used strategies that deal with options alone.

If in case the stock price moves higher, all you lose is just the premium amount that was paid. As the option nears expiration, its time value starts decreasing toward zero. The behavior of the underlying stock considerably affects the value of an option. For instance, when you are planning to buy some property you might have placed a nonrefundable deposit to hold it for a short time while you evaluate other options. Trading in options lets you benefit from a change in the price of the share without having to pay the full price of the share. In other words the strike price is the specified price at which the holder of a stock option may purchase the stock. The selling of a put option while being short for an equivalent amount in the underlying security. The concept of options can be explained with this example. In the second price situation, the price is more in the spot market, so you will not sell at a lower price by exercising the Put.

What is meant by the terms Option Premium, strike price and spot price? Buying a stock option is quite similar. The difficulty in predicting the behavior of a volatile stock permits the option seller to command a higher price for the additional risk. What is meant by Covered Call, Covered Put, In the Money, Out Of the Money, At the Money? The owner of a put option has the right to sell. It is calculated by subtracting the options strike price from the spot price. While buying time value, an options purchaser assumes that the option will increase in value before it expires. What is meant by settlement price?

For example if XYZ is trading at Rs 58 and the June 55 call is trading at Rs 4, to calculate the intrinsic value subtract Rs 55 from 58, leaving you with Rs 3 of intrinsic value. In addition, the value of an option decreases as its expiration date approaches. If you decide not to use the option to buy the stock, and you are not obligated to, your only cost is the option premium. Only then will you be able to narrow down on an options trading method. However, this type of contract gives the holder the right, but not the obligation to trade stock at a specific price before a specific date. Theoretical value is the objective value of an option.

This contract allows Rajesh to sell 100 shares of Infosys at Rs 3000 per share at any time between the current date and the end of May. The last price paid for a contract on any trading day. So here your best option would be to take a Put option on the stock. It is a measurement of the stocks movement as implied by how the market is currently valuing options. Put Option is called the Option Premium. If you buy an option rather than a stock, you invest less money upfront. An option is part of a class of securities called derivatives. What are the different types of Options? Similarly, you have probably heard about Bollywood buying an option on a novel.

That is an example of a type of option. What are Index Futures? Thus, its value is also highly dependent on the amount of time left before the option expires. Options are inherently risky investment vehicles and are suitable only for experienced and knowledgeable investors who are prepared to closely monitor market conditions and are financially prepared to assume potentially substantial losses. February and hence expect that there will be price corrections in the future. As the term suggests, historical volatility is a measurement of the stocks movement based on its past behavior. What a particular option contract is worth to a buyer or seller is measured by how likely it is to meet their expectations. How does one determine the price of an option? The put option gains in value as the value of the underlying instrument decreases.

Generally Call options increase in value as the value of the underlying instrument increases. Spot Price is the current price at which a particular commodity can be bought or sold at a specified time and place. This makes the price of all options tilt toward their theoretical value over time. As mentioned before, there are two types of options, calls and puts. Settlement prices are used to determine open trade equity, margin calls and invoice prices for deliveries. In both cases, with the house and the script, somebody put down some money for the right to buy a product at a specific price before a specific date. As Stated above, Futures are derivatives where two parties agree to transact a set of financial instruments or physical commodities for future delivery at a particular price. The remaining Rs 1 is known as extrinsic or time value.

An options price is composed of its intrinsic value and time value. As an owner of a call option you can always exercise your right to the stock and receive any dividend it might pay. An option, being a wasted asset; wastes a little as each day lapses. Thus its value is calculated in accordance to the amount of days left in its life. You can take a covered call if you take a long position in an asset combined with a short position in a call option on the same underlying asset. Before you begin options trading it is critical to have a clear idea of what you hope to accomplish. Often, the options price increases as the volatility of the stock increases. If the value of your stocks goes down, you can exercise your put option and sell it at the price level decided upon earlier. By contrast, the put option gives the holder the right to sell shares of the underlying stock at the strike price on or before the expiry date.

The volatility of the underlying stock is one of the key factors in determining the value of an option. You will have to allow the Put option to expire unexercised. By contrast, implied volatility is calculated using option prices. The buyer of a put has purchased a right to sell. Time value is the amount over intrinsic value that a buyer pays for the option. Thus, the phrase is an adjective used to describe an option with an intrinsic value.

They provide you with limited control over the shares of a stock with substantially less capital than would be required to buy the shares outright. Investors have different opinions about how a particular stock will behave in the future and hence may disagree about the value of any given option. Options are contracts that give the holder the right to buy or sell a fixed amount of a certain stock at a specified price within a specified time. Let us first understand the concept of options. The Advance Fee plan helps you take advantage of your consistent trading, and earn back your brokerage charges. It is the amount that brokerage houses charge to help you carry out a transaction on the stock markets. Click here to find answers.

This is the very reason why Kotak Securities has transparency in the brokerage charges and multiple brokerage plans you can choose from. It is as an ideal plan for new traders. India, but also enjoy the benefit of competitive brokerage rates that Kotak Securities has to offer. So, you can actually trade in index and stock contracts in just the same way as you would trade in shares. When closing a futures index contract on expiry, the closing value of the index on the expiry date is the price at which the contract is settled. Without margins, you cannot buy or sell in the futures market. Post purchase, MTM margin covers the daily differences in closing prices.

It is not necessary to hold on to a futures contract till its expiry date. Your broker will deduct the amount from your margins deposited with him and forward it to the stock exchange. Once you have these requisites, you can buy a futures contract. In practice, most traders exit their contracts before their expiry dates. When you trade in futures contracts, you do not give or take immediate delivery of the assets concerned. If you have left India for a holiday and are not in a position to sell the future till the day of expiry, the exchange will settle your contract at the closing price of the Nifty prevailing on the expiry day. Initial margin amounts fluctuate daily depending on the market value of your open positions. Market margin covers the difference between the cost of the contract and its closing price on the day the contract is purchased. Once you do this, hand over the margin money to the broker, who will then get in touch with the exchange.

Margin payments help traders get an opportunity to participate in the futures market and make profits by paying a small sum of money, instead of the total value of their contracts. Money is the obvious other requirement. You have to pay this amount upfront to the exchange or the clearing house. It helps reduce the risk that the exchange undertakes and helps in maintaining the integrity of the market. If you receive profits, they will be added to the margins that you have deposited. Such an exit depends solely on your judgment of market movements as well as your investment horizons. These are usually prescribed by the exchange as a percentage of the total value of the derivative contracts.

This is the amount you give to the seller for writing contracts. Trading in futures is slightly more complex than trading in straightforward stocks or etfs. However, many traders also choose to settle before the expiry of the contract. The exposure margin is set by the exchange to control volatility and excessive speculation in the futures markets. However, there are also downsides to futures trading. If you made a loss of money, the amount will be deducted from the margins. Buying and selling futures contract is essentially the same as buying or selling a number of units of a stock from the cash market, but without taking immediate delivery.

The main payoff for traders and investors in derivatives trading is margin payments. If on the last Thursday of July, ABC Ltd. However, this requirement is slightly different for the derivatives market. Index futures contracts are settled in cash. This can again be done on expiry of the contract or before the expiry date. The factors that decide the amount of initial margin are the average volatility of the stock in concern over a specified period of time and the interest cost. This particular contract expires on July 27, being the last Thursday of the contract series. Example: You have purchased a single futures contract of ABC Ltd.

There are different kinds of margins. Initial margin is defined as a percentage of your open position and is set for different positions by the exchange or clearing house. This amount is adjusted with the margins you have maintained in your account. This will also be settled by the exchange by comparing the index levels when you bought and when you exit the contract. This is called settling of the contract. You can do so by either selling your contract, or purchasing an opposing contract that nullifies the agreement. However, it does not come for free. Depending on the profit or loss of money, your margin account will be credited or debited. Here again, your profits will be returned to you or losses will be collected from you, after adjusting them for the margins that you have deposited once you square off your position.

It is levied on the value of the contract that you buy or sell. This will be added to your account. As a buyer, your pay a premium margin, while you receive one as a seller. If on the date of expiry, the index closes higher than when you bought your contracts, you make a profit and vice versa. The low upfront payments and highly leveraged nature of futures trading can tempt traders to be reckless which could lead to losses. The exchange, in turn, will forward it to the seller, who has made that profit. From stock market to Options trading to Mutual funds, each of our modules systematically explain investment related Terms and concepts that form the basis of winning investment Strategies.

So select the modules of your choice and give Your portfolio the edge of knowledge. This margin amount will vary from stock to stock. Margin trading facility helps you to trade in stocks by borrowing money from your stock broker. Normally investors buy and sell stocks with their own money. No Minimum Margin required to activate Margin Trading facility. We will fund the rest of the transaction so that you are able to purchase this share. Customer can carry the position just by maintaining minimum margin. The margin trading facility is made available to you once you accept the Margin Trading Facility disclaimer with us. Select Option and accept Disclaimer. Nifty and Sensex updates on your phone.

Kotak Stock Trader and receive stock market updates instantly! How to sell or buy stocks if it is not allowing to open the app itself. But not in use. Very bad experience after new updated version v4. Kotak have to think for faster app. Kotak stock trader app. Not able to open the app. Apologies for the inconvenience caused to you. Kotak Stock Trader app users can connect to Live TV 24 x 7 facilitated by Bloomberg TV. Network is working fine. Kotak Securities Limited August 20, 2017 Hi, thank you for your valuable feedback.

Additionally it also gives sector wise break up along with information of specific scripts from your portfolio. You can buy and sell stocks by swiping or tapping on the optimized buy and sell buttons. Kotak Securities Limited March 16, 2017 Hi, thank you for your valuable feedback. Currently not able to login. Users of the KST app can review their derivative contracts and select the best stocks for selling and buying purposes. Also, you can monitor your portfolio on the go! It converts your smartphone into a stock trading platform and helps you monitor your portfolio on the move.

Trading charges are high. Updation of balance takes more than three days. So if you use all of your balance to open any trade and you close it after some time. Requesting you to share your client code to get in touch with you to serve you better. Download and install the Kotak Stock Trader app to get LIVE market updates and create watchlists without having to log in. KEAT Pro X, KST or Website. Currently Unable to process your request. Clicking on the investment portfolio pie gives you detailed information about equity, derivatives, mutual funds.

Many time this happens not able to login. Very pathetic app I have closed the open trade a week ago, it reopen it automatically. One star service and am planning to switch my account if this is not improved immidiately. This problem has started appearing after upgrading this App. Kotak Securities Limited December 27, 2016 Hi, thank you for your valuable feedback. Kotak Stock Trader online trading app allows the customer to configure indices 24X7. Thanks you good bye kotak. Can we please have an mpin for this app or biometric scanner access like we have in the regular banking one I know the password protection and the access code system is for our own good but honestly it gets irritating after some time. KST mobile trading application offers you the latest market updates from Times Of India, Money Control or Economic Times based upon your preferences.

Not able to login during trading hours, app crash abruptly, slow app, high charges are the reasons for this disappointment. Crashes so frequently after updation also. Never ever would i recommend kotak securities. Being a stock trader you guys understand what that means. The KST application caters to the needs of every investor. Most of the time app would crash. You will not be able to open another trade bcoz balance is not certainly updated. Be it a beginner or an expert stock broker, the Kotak Stock Trader app is suitable for all investors.

Kotak Bank and their services but Kotak Securities is a BIG disappointment. Not able to login. For more details, go to Kotak Securities Academy. Based on these shares, derivatives instruments are also traded on the market. This allows you to make more money. This is because the actual value of the contracts would be too large in lakhs and crores. What does Kotak Securities offer? The most common use of derivatives trading is hedging.

You can refer to the Kotak Securities Academy to learn more about derivatives. The Currency Derivatives product is a bundle of opportunities for a number of players. While dealing in the derivatives market, you are essentially betting on the future increase or decline in stock prices. They are called contracts. Their value is tied to the underlying security. An option is also a similar contract, except the parties are not obligated to fulfill the terms of the agreement. Futures are contracts or an agreement between two parties to either buy or sell a fixed quantity of assets at a particular time in the future for a fixed price.

As a result, many stock traders use the segment to enhance their profits. There are many advantages of trading in futures and options. As part of this, you buy in the cash segment and agree to sell in the derivatives market or vice versa. This agreement is sold in the market. Derivative instruments are available for shares, indices, currencies as well as commodities. Hedging is mainly used by importers and exporters in the currency derivatives segment. These contracts are then traded in the market. While trading in the derivatives market, you only pay a margin. To start trading in derivatives, all you need to do is open an online trading account and choose from our wide range of accounts to suit your needs.

These instruments are an agreement to buy or sell the underlying shares in the future. It is a new asset class for diversification of investments for all Resident Indians. Our derivatives seminars educate new entrants in the derivatives market to be better equipped with knowledge and techniques. This is called arbitrage. Thus, you are essentially safeguarding yourself from potential losses. How to start trading? Research Reports: Once you have the knowledge of trading in derivative instruments, our daily derivative reports will provide you with strategies that may yield good returns for you. The minimum value of a contract is Rs 2 lakh.

However, when you make a profit, the percentage of growth is exponentially higher. In the stock market, you can buy and sell shares of companies. The minimum value of a contract is 2 lacs. Derivative is an instrument, such as Futures and Options contracts, which derives their values from an underlying security, or an index. An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date. Once you have the knowledge of trading in derivative instruments, our daily derivative reports will provide you with strategies that may yield good returns for you. To start trading in derivatives, all you need to do is open an online trading account.

No contract value would be less than 2 lacs. Contract is a legal bonding between two or more parties, where the reason for the contract, time period and the amount is specified. Choose from our wide range of accounts to suit your investment needs. You can also refer to the Kotak Securities Academy to learn more about derivatives. Future is a contract to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future.