Thanks Nishant..but this is not i am lokking for. as per ur statement it depend upon the demand and supply and as well as the trade..if let say the demand for rupee is increasing..this means it would appreciate..now my query how the calculation are being done?if yesterday it was 50Rs /USD and now it is 48Rs/USD..How this is calculated..
harsimran_sahni SaysThanks Nishant..but this is not i am lokking for. as per ur statement it depend upon the demand and supply and as well as the trade..if let say the demand for rupee is increasing..this means it would appreciate..now my query how the calculation are being done?if yesterday it was 50Rs /USD and now it is 48Rs/USD..How this is calculated..
Do you know how the stock price changes?.. Have you heard of Bid and Ask price.. And what is called spread..
Same thing happens in case of currency trading..
Refer this article and follow the links to know more about stock price change.. You can relate the same with currency trading..
Bid Ask and Trading Stocks
harsimran_sahni SaysThanks Nishant..but this is not i am lokking for. as per ur statement it depend upon the demand and supply and as well as the trade..if let say the demand for rupee is increasing..this means it would appreciate..now my query how the calculation are being done?if yesterday it was 50Rs /USD and now it is 48Rs/USD..How this is calculated..
Forex trading is OTC {over the counter} which is by far the biggest OTC market in the world. Currency fluctuations depend on several factors, and traded price ensures that there is no arbitrage possible. Example - you will not be able make money by buying US Dollars in Dubai and selling them in India.
As you must be knowing, central banks {RBI, Federal reserve} control the money flow in the system, which is one significant factor that control currency movements. Example - Fed buys government securities in the US and pumps billions of dollars in US system. The investors in the US who now have more liquid money with them, they start looking at opportunities to deploy the money to earn smart returns. India is a emerging economy and when foreign money flows in India, demand of Indian currency increases, which drives value of INR compared to USD.
USD is a benchmark, various currencies are measured per US dollar. Hope that answers your question.
Cheers,
mohsin_infy Saysmy thinking was that tech mahindra is already stable at 350 smthing and satyam as now there is no more setbacks to it (hopefully) along with that fifa world cup contract in satyams hand will rise obviously even if i am not getting to much i am not going to loose.
mohsin_infy Saysand thanks to all of you who gave their suggestions :)
mohsin_infy Saysone more question yar , how to check the P/E ratio, I mean from where can I check the P/E ratio on net
May be what u said is right, but I think that other stocks may prove out to more profitable than satyam right now.
My vote : no in favour of buying satyam.
and if you want to know more about any specific stock then go to
Indian stock markets: Mutual funds, Sensex, Nifty
you can enter any script code and know all the information about it.
Forex trading is OTC {over the counter} which is by far the biggest OTC market in the world. Currency fluctuations depend on several factors, and traded price ensures that there is no arbitrage possible. Example - you will not be able make money by buying US Dollars in Dubai and selling them in India.
As you must be knowing, central banks {RBI, Federal reserve} control the money flow in the system, which is one significant factor that control currency movements. Example - Fed buys government securities in the US and pumps billions of dollars in US system. The investors in the US who now have more liquid money with them, they start looking at opportunities to deploy the money to earn smart returns. India is a emerging economy and when foreign money flows in India, demand of Indian currency increases, which drives value of INR compared to USD.
USD is a benchmark, various currencies are measured per US dollar. Hope that answers your question.
Cheers,
Buddy but still people do arbitrages. can u please elaborate this point, how u can avoid arbitrage. IS there any centralised value concept, I mean globally that value will be same?
And i must say u have very wide knowledge, have u done MBA?
please suggest some books for intermediate level.
Buddy but still people do arbitrages. can u please elaborate this point, how u can avoid arbitrage. IS there any centralised value concept, I mean globally that value will be same?
And i must say u have very wide knowledge, have u done MBA?
please suggest some books for intermediate level.
Aribitrage opportunities are like black holes in the universe, they keep coming and vanishing...all the markets tend to fill up those holes in the system. In mature markets it is very difficult to find arbitrage. Various broking houses and Investment banks have arbitrage trading desk, where they evaluate if any opportunity arrives to their hands. There is a thin line of difference between trading strategy and arbitrage. For forex markets, these opportunities are not visible to investors, and if anything appears, it is instantly eaten by the dealers {dealers are big investment banks - Merrill Lynch, Wachovia are biggies}.
I am not a MBA, I graduated from IIT Bombay in 2006.
Arbitrage can and sometimes does exist in forex markets, though only for a couple of seconds. As mentioned by Vivek, dealers quickly close the gap. This is done b computer trading systems that have been programmed to do so. So an arbitrage opportunity closes in a couple of seconds as computers across the globe seek to profit from it.
But longer term arbitrage strategies are possible. Infact they are trading strategies based on breakdowns or discontinuities in the market. Although interest rate parity holds, an astute trader can go long on a currency with a borrowing (in a futures contract), expecting a fall in interest rates. If this happens, he can refinance his borrowing at the lower rate, while his returns are locked in the contract.
Not sure about this. Could be wrong. Just thought of sharing.
thanks vivek...
Guys i always had the doubt regarding Forex movements and IT companies performance.
It is a General principle that a lower local currency(v/S dollar) is favourable for Exporters .( As costs in Rupee are less and as things are priced cheap when converted to Dollar).However i never understood IT and Pharma Companies...When Rupee value appreciated and was in 36-38 level people were saying that Revenues got affected by the Rupee Appreciation.Now again they do say the same with Re depreciation.
Can anyone Explain on what Business model are they working...
Guys i always had the doubt regarding Forex movements and IT companies performance.
It is a General principle that a lower local currency(v/S dollar) is favourable for Exporters .( As costs in Rupee are less and as things are priced cheap when converted to Dollar).However i never understood IT and Pharma Companies...When Rupee value appreciated and was in 36-38 level people were saying that Revenues got affected by the Rupee Appreciation.Now again they do say the same with Re depreciation.
Can anyone Explain on what Business model are they working...
This was because of the misappropriation of hedge funds, thats why transition of IT companies from appreciation to depriciation phase was not smooth. (correct me if i am wrong).
@Vivek: i have very typical query,
Is the value of dollar against any currency proportional, I mean if u consider dollar vs yen , rupee vs yen, and rupee vs dollar, then will we get same return in the two cases mentioned below.
Rupee- dollar- yen
rupee - yen.
or if there is any difference, can we use this difference to make profits? will it also be called arbitrage ?
Guys i always had the doubt regarding Forex movements and IT companies performance.
It is a General principle that a lower local currency(v/S dollar) is favourable for Exporters .( As costs in Rupee are less and as things are priced cheap when converted to Dollar).However i never understood IT and Pharma Companies...When Rupee value appreciated and was in 36-38 level people were saying that Revenues got affected by the Rupee Appreciation.Now again they do say the same with Re depreciation.
Can anyone Explain on what Business model are they working...
Companies incur loss and profit when they are operating in different currencies, and for the same reason they have line item which reads - Loss/Profit from Forex. Pharma companies usually expense in USD, EUR and recognize revenues in INR {Example Ranbaxy}. Ranbaxy has R&D; Facilities in the US and Europe, every healthcare/pharma company has significant R&D; expense, which includes horrendous compensation to scientists they deploy for exploring medicines.
Just to give you an idea of how much they expense on research - recently US President announced investing 3% of US GDP on research after Swine Flu outbreak. Pharma companies get trillion dollar contracts for such epidemics. Anyways, for a company recognizing revenue in INR and expensing in USD, will get hurt when INR is depreciating compared to USD. They usually hedge capital upfront to reduce the loss as much as they can.
This was because of the misappropriation of hedge funds, thats why transition of IT companies from appreciation to depriciation phase was not smooth. (correct me if i am wrong).
@Vivek: i have very typical query,
Is the value of dollar against any currency proportional, I mean if u consider dollar vs yen , rupee vs yen, and rupee vs dollar, then will we get same return in the two cases mentioned below.
Rupee- dollar- yen
rupee - yen.
or if there is any difference, can we use this difference to make profits? will it also be called arbitrage ?
It is not that easy, you can try out multiple permutations and combinations, but it will be difficult to arrange even 1 bps arbitrage while selling/buying contracts in different currencies. It will surely be an arbitrage if such combination exists, but I doubt it, and even if it does exists, dealers would have eaten that before anyone could think of it. The algorithm are robust and there no margin of error - although humans made machines, but nowadays these machines generate trading strategy and make money for traders.
Friends
I am having shares of Tata motors(bought @ Rs.266.10), Tata Steel(bought @ 263.50) reliance commn(Rs.228.75) and Adlab films(rs.244.80).All these shares had shown an appreciation of 30 to 38% in post election results rally .Is it wise to book the profits now?.
Nidhin
Friends
I am having shares of Tata motors(bought @ Rs.266.10), Tata Steel(bought @ 263.50) reliance commn(Rs.228.75) and Adlab films(rs.244.80).All these shares had shown an appreciation of 30 to 38% in post election results rally .Is it wise to book the profits now?.
Nidhin
If u are a short term player//its advisable to book profit..atleast partly..otherwise from long term prospective..hold these stocks
Friends
I am having shares of Tata motors(bought @ Rs.266.10), Tata Steel(bought @ 263.50) reliance commn(Rs.228.75) and Adlab films(rs.244.80).All these shares had shown an appreciation of 30 to 38% in post election results rally .Is it wise to book the profits now?.
Nidhin
ADAG stocks {Adlabs and Reliance Communications} and high beta stocks {more risk, more return}, you can sell them and book profits. Tatamotors should make new highs, once NANO plant at gujrat becomes functional, I believe Tata's will raise more capital to fast-track production, this will show positive in their September results. 263 was a good price for tatasteel, and once economy gets better, commodities like steel copper should soar in international market, and so is tatasteel. {Steel companies extract/galvanize steel sheets and sell them in international market}
Given UPA government is talking on various reforms, which includes Pension reforms, Insurance reforms, and they are also talking about banking and broking license. You can start accumulating scrips which have applied for banking and broking license or have potential
Companies incur loss and profit when they are operating in different currencies, and for the same reason they have line item which reads - Loss/Profit from Forex. Pharma companies usually expense in USD, EUR and recognize revenues in INR {Example Ranbaxy}. Ranbaxy has R&D; Facilities in the US and Europe, every healthcare/pharma company has significant R&D; expense, which includes horrendous compensation to scientists they deploy for exploring medicines.
Just to give you an idea of how much they expense on research - recently US President announced investing 3% of US GDP on research after Swine Flu outbreak. Pharma companies get trillion dollar contracts for such epidemics. Anyways, for a company recognizing revenue in INR and expensing in USD, will get hurt when INR is depreciating compared to USD. They usually hedge capital upfront to reduce the loss as much as they can.
It is not that easy, you can try out multiple permutations and combinations, but it will be difficult to arrange even 1 bps arbitrage while selling/buying contracts in different currencies. It will surely be an arbitrage if such combination exists, but I doubt it, and even if it does exists, dealers would have eaten that before anyone could think of it. The algorithm are robust and there no margin of error - although humans made machines, but nowadays these machines generate trading strategy and make money for traders.
Good points but i wanted to know something else before what u replied
If we convert rupee to dollar first and then to yen according the currecy exchange rate
and in second case we convert rupee directly to yen. so will there be any difference,
Actually the intension behind is to know how the currencies valuations are decided with respect to each other.
If we have some common valuation system then the two cases mentioned above should give u equal value,
and one more doubt...is n't there any relation between economy and currency valuation? Japan is quite a large economy as compared to indian economy but still the currency exchange rate is 1 rupee = 2 yen approx.
can u throw some light on this?
Good points but i wanted to know something else before what u replied
If we convert rupee to dollar first and then to yen according the currecy exchange rate
and in second case we convert rupee directly to yen. so will there be any difference,
Actually the intension behind is to know how the currencies valuations are decided with respect to each other.
If we have some common valuation system then the two cases mentioned above should give u equal value,
There will be difference if you derive the procedure using many contracts in between - you will be paying more fees to dealers in OTC transaction. And if you were a dealer yourself you will not be able to derive any profit {arbitrage} while buying or selling forex contracts in multiple currencies.
Forex changes and currency valuations are dependent on country's fiscal and monetary policies, which are decided by the Government and central bank respectively of the country. Example - Key interest rates in a country, cash reserve ratio, liquidity within system, macroeconomic stability are important parameters which derive currency valuations. You can understand this by comparing Germany and Zimbabwe.
and one more doubt...is n't there any relation between economy and currency valuation? Japan is quite a large economy as compared to indian economy but still the currency exchange rate is 1 rupee = 2 yen approx.
can u throw some light on this?
It dosent matter if 100 Yen is equivalent to 1 Rupee, or vice versa, it is a mere transaction. There are various currencies which are expensive than dollar however the economy of those nations are not even close to that of the United States. Yen is the strongest currency in Asia, which is a benchmark for Asian economy. In 1980s when Yen was trading close to 90 Yen to USD, Japnese central bank pumped billions of Yen in open market to reduce demand of Japanese currency and to save big Automakers in Japan {Toyota}. Japan is the biggest exporter of cars and ships to the US.
HELLO,
i m new to this thread........
:
plz tell me where i can get all d basics of market (sensex)???
i m new to this thread........
:plz tell me where i can get all d basics of market (sensex)???
HELLO,
i m new to this thread........
plz tell me where i can get all d basics of market (sensex)???
http://www.nse-india.com/content/ncfm/Contents_revised.pdf
Try reading this document....basic concepts are explained well
Can anyone tell me about stock loss
i am hearing this term frequently on news channels relating to stocks
Can anyone tell me about stock loss
i am hearing this term frequently on news channels relating to stocks
I guess it should be Stop Loss.
This means when one buys/have stocks (say reliance @ 1200 each) and doesn't want to lose more than 50 Rs per share, he can order to sell the same by giving a sell order with Stop loss @ 1150. So in the event of price coming below or equal to 1150 his stocks will be sold automatically.
Traders/Analysts use this term to present resistance i.e. in above example if someone believe that a price of 1150 for reliance will trigger sentimental selling than he/she will also put a stop loss at 1150 which is purely technical/gut feeling and has nothing to do with loss bearing capacity of investor.
Thats why we hear comments like buy Ranbaxy @ 240 with a stop loss of 230, i.e. here the analyst means that though Ranbaxy has a current uptrend potential but the same may not be there if price comes below 230.
Regards,
ANdy