Concept Consultants

Options are different from forward and futures contracts. An option gives the holder of the option the right to do something. The holder does not have to exercise this right. Unlike, in a forward or futures contract, the two parties have committed themselves to doing something. Whereas it costs nothing (except margin requirements) to enter into a futures contract, but the purchase of an option requires an up-front payment called premium.

For the buyer of the Options the loss is limited to the amount of premium he has paid to buy the options. Where as the in futures contracts the holders of the contract is exposed to unlimited loss or profit.

Buyer of an option: The buyer of an option is the one who by paying the option premium buys the right but not the obligation to exercise his option on the seller/writer.

Writer of an option: The writer of a call/put option is the one who receives the option premium and is thereby obliged to sell/buy the asset if the buyer exercises on him.

Call option: A call option gives the holder the right but not the obligation to buy an asset by a certain date for a certain price.

Call options can be used if one has the bullish view underlying

Put option: A put option gives the holder the right but not the obligation to sell an asset by a certain date for a certain price.

Put options can be used if one has the Bearish view on the underlying

Option price/premium: Option price is the price which the option buyer pays to the option seller. It is also referred to as the option premium.

Derivatives, Indian Market News, news calls, FNO, Options, puts

In it’s periodic reviews of contract size/value of derivative contracts based on prescribed minimum value of INR 200,000 as per SEBI circular no. SEBI/DNPD/CIR-20/2004/02/23 dated February 23, 2004.   It is proposed to carry out revision of market lots for derivatives contract as given below:

List of underlying in which market lot is being revised downwards

FNO Lot Size Revised Downwards

List of underlying in which market lot is being revised upwards:

 To avoid operational complexities, in case 2 above, only the far month contract i.e. March 2009 expiry contracts will be revised for market lots. Contracts with maturity of January 2009 and February 2009 would continue to have the existing market lots. All subsequent contracts (i.e., March 2009 expiry and beyond) will have revised market lots.

Derivatives, news Derivatives, FNO, New Lot size

In order to increase the capital inflows in Indian markets today SEBI chairman Mr. C. B. Bhave has announced changes in P-notes policy. SEBI today scraped a rule which allowed P-notes could only account for upto 40% of the value of assets foreign fund, he also said entire framework for FII participation needs to be reviewed.

As per Oct 2007 decision FII’s were expected to bring down total p-notes issuance to 40% of their total assets before march 2009. However Mr. Bhave himself told the reporters that FII issuance of P-notes has already come down substantially and thus today’s decision may not make any immediate difference to FII position.

Derivatives, Fundamental Analysis, Indian Market News, Stock Tips, news FII, P-notes, SEBI

Today Indian central bank, The RBI reduced CRR by 50 basis points to ease liquidity in the market. This measure was undertaken as an ad-hoc measure on a temporary basis. RBI has indicated that it will adopt a proactive policy and continue taking such ad-hoc measure from time to time depending on market conditions. The indian banks were facing tight liquidity crunch and this could have led to a major liquidity crisis hence all banks have welcomed this move and called for another 50 basis point drop. HDFC Bank chairman Mr. Deepak Parekh while welcoming this move said that this action was long overdue and infact should have been taken on last friday itself.

The RBI will hold a meeting at the end of this month where further actions are expected, this move is only expected to have an effect on overnight call rates and lending deposit rates will not be affected.

The above said action will come into effect from 11 Oct 2008 and will result in a liquidity release of 20,000 crores. Watch out for Banking stocks in tomorrow’s trading session.

Derivatives, Indian Market News, Stock Tips, Technical Analysis, news CRR, RBI, Reserve Bank

State-owned Bharat Heavy Electricals Ltd (BHEL) on Monday announced it has bagged an order worth Rs 200 crore for a hydro-electric power project in Vietnam.The contract, which marks the equipment manufacturer’s entry into the Vietnamese market, was awarded by State-owned Nam Chien Hydropower, BHEL said in a press release.

The project is located in Muong La, 350 kilometres north of Hanoi and is slated to be completed by end-2010.

“This success opens a huge market potential for BHEL not only in the hydro segment but also in the thermal and gas based power plants segments in Vietnam, which will witness huge capacity additions in the future,” the statement said.

Under the contract, BHEL would be responsible for the design, engineering, manufacture, supply and supervision of installation as well as commissioning of electro-mechanical equipment.

Major equipment to be supplied for the project include hydro turbines, generators, transformers, controls, monitoring and protection system and switchgear. The project is being funded by a line-of-credit from the Government of India to Vietnam.

Source: Business Line Dated 05-Aug-2008�

Derivatives, Indian Market News, Market Gossip, news BHEL, BSE, electro mechanical equipment, hydro electric power, Indian Market News, NSE, shares, Stocks, vietnam

Daiichi Sankyo is planning to acquire up to 9.21 crore shares at Rs 737 each through the open offer. The Japanese company had announced earlier that it was buying out 34.81 per cent stake in Ranbaxy held by the Singh family. It will also acquire 9.5 per cent through preferential allotment of equity shares and another 4.5 per cent through share warrants to be issued on a preferential basis. Daiichi Sankyo’s stake in Ranbaxy could go up to 58 per cent after the open offer. The entire deal is valued at $3.4-4.6 billion.

However this would increase the stake of Daiichi by 20% in Ranbaxy. Ranbaxy’s share price went up 2.8 per cent to close at Rs 524 on Monday after the final word from SEBI.

Derivatives, Indian Market News, Market Gossip, news BSE, Daiichi Sankyo, Indian Market, Japan, NSE, Ranbaxy, SEBI, shares and debentures, stockmarket, Stocks

If you have not filed your Income Tax returns then better be quick and complete the formalities by July 31, here are some consequences which might occur if you fail to pay the tax or file your IT Returns:
1) The tax department may impose a penalty of up to Rs 5,000 under section 271F on you for not filing IT Return.
2) If you have unpaid tax of more than Rs 3,000 but less than Rs 1 Lakh, you can be sentenced for a jail term of three months along with the penalty.
3) If the unpaid tax amount is more than Rs 1 Lakh the jail tern can increase to a minimum of six months to a maximum of seven years, over and above the penalty.
4) In case a person does not file returns but submits documents like Form 16A and other TDS certificates after getting a notice, he can be still asked to pay a penalty of Rs 5000.
5) If the person ignores the notice then the penalty will increase to Rs 10,000 for each notice.

However, return filing can be extended to till April 2009, the last date of assessment year for 2007-08 if there is a genuine ground, There are several advantages also like:
1) Income tax law allows carry forward of set off business losses against the income in the subsequent years.
2) If more tax than the due amount is deducted from your income, you will get the refund only after filing the returns.
3) If you file the return by July 31, you will also get the interest on the refund amount for the period between April 1, 2008 and the date of refund but if you file your returns after July 31, 2008, you will not get the interest.

Derivatives, Indian Market News, Stock Tips Filing of IT, Income Tax, IT Returns, Returns, Tax, Tax benefits, Tax returns, TDS

The derivative contracts in the below mentioned securities have crossed 95% of the market-wide position limit and are currently in the ban period. It is hereby informed that all clients/ members shall trade in the derivative contracts of said securities only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action in accordance with the Circular No. NSCC/F&O/C&S/365 dated August 26, 2004.

 Sr.No. Symbol
1 ADLABSFILM
2 BINDALAGRO
3 ESSAROIL
4 IVRPRIME
5 ORCHIDCHEM
6 PARSVNATH
7 RAJESHEXPO

Derivatives ban list, F&O, FNO, Security list

The derivative contracts in the below mentioned securities have crossed 95% of the market-wide position limit and are currently in the ban period. It is hereby informed that all clients/ members shall trade in the derivative contracts of said securities only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action in accordance with the Circular No. NSCC/F&O/C&S/365 dated August 26, 2004.

 Sr.No. Symbol
1 ADLABSFILM
2 BINDALAGRO
3 ESSAROIL
4 GMRINFRA
5 IFCI
6 ISPATIND
7 IVRPRIME
8 JPHYDRO
9 NAGARFERT
10 PARSVNATH
11 RAJESHEXPO
12 RPL
13 SRF

Derivatives, Indian Market News ban list, F&O, Security list

The derivative contracts in the below mentioned securities have crossed 95% of the market-wide position limit and are currently in the ban period. It is hereby informed that all clients/ members shall trade in the derivative contracts of said securities only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action in accordance with the Circular No. NSCC/F&O/C&S/365 dated August 26, 2004.

1 ADLABSFILM
2 ARVINDMILL
3 BINDALAGRO
4 ESSAROIL
5 GMRINFRA
6 IFCI
7 ISPATIND
8 IVRPRIME
9 JPHYDRO
10 NAGARFERT
11 PARSVNATH
12 RNRL
13 RPL
14 SRF

Derivatives, Indian Market News ban list, F&O, FNO, securities list