What are stock indices and how are they calculated?
To gauge the movement of all the stocks at any given time is a cumbersome process for an average investor. Hence, representation has been designed which encompasses a basket of similar stocks, to indicate the trend of the market. This representation is termed as a Stock Market Index or simply, Index.
The value of the Index is calculated from the value of that particular basket of stocks. The daily changes in the price of the stocks change the index value and hence represents the changes in the stock market. The two major indices in Indian Stock Market are the S&P BSE SENSEX, represented by a basket of 30 stocks and the NSE Nifty50, represented by a basket of 50 stocks. There are many other Nifty indices like the Nifty Bank, Nifty Midcap50, Nifty Mid100, Nifty Infra, Nifty IT, Nifty Realty etc.
What is a stock split?
A stock split is a corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares. Although the number of shares outstanding increases by a specific multiple, the total value of the shares ...
How is the margin calculated for buying options?
To buy either calls or puts, the margin requirement is only to the extent of the premium. Margin for buying options = Premium * Total Quantity
How is the margin calculated for selling options?
Since the seller of the option is exposed to a greater risk than the buyer, the margin requirement is greater for the seller. The exchange stipulates margin requirements based on the volatility of the underlying asset. Check our Margin Calculator.
What is underlying? What is the difference between an underlying and a derivative contract?
In derivatives trading, an underlying asset is the financial instrument represented by a derivative and is what gives a derivative its value. An underlying asset often takes the form of stocks, bonds, indices, currencies or commodities, but it can be ...
Can I buy and sell Far OTM Options in FYERS?
Yes, We provide you a wider strike price range for options trading and you can Buy/Sell Far Out of The Money (OTM) Options Contracts. Options Buying Index Options – You can Buy OTM Options up to a range of 20% from the LTP. Stock Options – You can ...