Dont even think of making new investment decisions at this point of time in mutual funds. Why?

1) Inflation is over 12% and climbing. There are talks of inflation coming under control in a couple fo quarters and it may certainly get easier if crude oil falls below $100 . But with reports about possibilities hurricane Gustav becoming a level 5 storm and hitting oil companies in mexico, this may not happen in the next couple of months. So we may be a little off about estimates about getting inflation under control.

2) Interest rates have increased, GDP has fallen and one may think this would be an ideal time to invest. But alas, interest rates will increase once again in October in all probability, growth will be hit once again. And the stock markets are going to fall further.

3) Currently the Nifty EPS is about 18.4 and Nifty growth is hardly 10%. In fact the growth in Q2 is going to be even worse than the growth in Q1.

4) The Global economic condition is worsening. Originally it was fear about US recession now Japan and UK, in fact a major portion of Europe is on the brink of recession. It is not at all clear how long and how deep is the current crisis is going to be.

So what is a good time to invest in mutual funds ?

1) Inflation under control.
2) GDP growth on target.
3) No major world economies, especially those directly affecting Indian markets facing recession fears.
4) Watch for IIP (Index of Industrial Production) data which is released every month. A consistent increase in IIP data would be a good indication of a healthy economy. Note however IIP must be compared with the same month last year rather than the previous month.

Related Posts :

• Liquid Funds
  

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Here are some important things to keep in mind while selecting a mutual fund.

1. Make sure you are clear on why you are investing in a mutual fund. There are roughly two main reasons. (i) Investment + for tax saving for claiming deduction under section 80C and (ii) Purely investing purpose.
   
   
2. Choosing between Growth and Dividend options : Nearly each mutual fund comes in two options : Growth and Dividend. In the growth option you get back your entire money after you sell or redeem all units of the mutual fund. In the dividend option, you keep getting periodic (usually yearly) dividend on your investment. i.e. the mutual fund periodically pays out a sum depending on its performance in that year. Dividend option is good for those who are looking for yearly income. Dividends are currently tax free. Choosing between growth and dividend options is purely a matter of ones own personal requirements.
   
   
3. How much risk to take ? You have to decide how much risk you want to take on this investment. Lets talk about three categories of risk : low risk, medium risk and high risk. I would advice the following type of people to stick with low risk options. (i) People who are new to stock market and have no or little experience in dealing with shares / stocks. This is because any risk you take without having an above average understanding of the stock market will NOT be a calculated risk. (ii) People for whom this investment is going to be a significant portion of the total investments and savings they currently have. Please bear in mind that "taking high risk amounts to higher returns" is a myth or a fallacy. Risk itself means your investment can shrink.
   
   
4. Selecting for Tax deduction purpose : Not all mutual funds are eligible for deductions under 80C. How to identify tax saving mutual funds ? Any such mutual funds usually clearly mention this. Also such mutual funds have a lock in period of 3 years.
   
   
5. Choosing a Low risk option : In order to minimise risk it is important that the mutual fund you pick has a well-diversified portfolio. Which means, if you look at the portfolio of the mutual fund, then it must not have a major percentage of its investment in a single stock. How does one find out about the portfolio of a mutual fund ? Here is one possible way (i) Go to Moneycontrol.com (ii) In the search options click on "NAV" and type the name or part of the name of the mutual fund in the search box and search. (iii) A list of matching names will appear on the screen. Click on the mutual fund you are looking for. On the page that will appear, scroll down and you will see "Portfolio Analysis". There will be a list of companies and next to each of them you will see the percentage of the total amount that the mutual fund has invested in that particular company. Make sure that the topmost company on that list does not have more than 7% to 8%. It is also important to have diversification sector wise. After looking at the portfolio look at past performance of that mutual fund (again for example on moneycontrol.com).
   
   A mutual fund which has satisfactory past performance and a well diversified portfolio is a good low risk investment option.
   
   Choosing a systematic investment plan or an SIP is a good idea in order to minimise risk. In order to further minimise risk you may choose to split your investment or SIP into two to three different mutual funds meeting the criterion.
   
   
6. For those with high risk appetite : For this you have to have a judgement about which sector is going to do well in the near future. For example if you think that construction and real estate are going to go up in the near future, then you can choose a high risk option by selecting a mutual fund which has a large percentage of its investment in real estate and construction companies. You will have to do some searching and researching for this though. Also bear in mind, if your guess is wrong a significant portion of your investment can be wiped out. Merely choosing a mutual fund based on past performance and whose portfolio is not so well diversified (for example one of the taurus mutual funds had around 33% of its investment in JaiPrakash Associates Ltd. - this is way above our 7-8% criterion for diversification) would also qualify as a high risk, although I am not sure that is a good idea.

Related posts :

• Introduction to Mutual Funds
• My own experience with Systematic Investment Plan (SIP)
• Liquid Funds : What, Why, How, etc.
  

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Here is a picture describing the current position and forecast of the storm gustav.

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Here you will find a table comparing intraday brokerage charges and delivery brokerage charges charged by different online brokers in India : Sharekhan, ICICIdirect, Motilal Oswal, Religare, SBICAP Securities, Angel Broking, 5paisa, Indiabulls, UTI Securities, HDFC Securities, Indiainfoline, Reliance Money. I constantly try to update this table and try to keep it upto date, so if you have any more information, please leave a comment. It is also important that you read the remarks below the table to get a complete picture.

Online Broker	Brokerage for Delivery	Brokerage for Intraday trading	MMC*
SBICAP Securities brokerage charges	0.50%	0.10%	NIL
Sharekhan brokerage charges	0.03% - 0.50%	0.03% - 0.10%	NIL
Motilal Oswal brokerage charges	0.30% - 0.50%	0.03% - 0.15%
5 paisa brokerage charges	0.25% - 0.85%	0.07%
Angel Broking brokerage charges	0.50%	0.02% - 0.03%
ICICI direct brokerage charges	0.75%	0.15%
Indiabulls brokerage charges	0.25% - 0.50%	0.05% - 0.10%
HDFC Securities brokerage charges	0.50%	0.15%
UTI Securities brokerage charges	0.80%	0.15%
Religare brokerage charges	0.20% - 0.30%	0.02% - 0.03%
Reliance Money brokerage charges	0.01%	0.01%	card system
Geogit brokerage charges	0.30%	0.03%
Indiainfoline brokerage charges	0.50%	0.10%	-

MMC=Minimum monthly commitment.

• Brokerage is usually negotiable: Several of you trying to choose an online broker and open an online trading account must have been frustrated trying to search for the exact brokerage charges charged by various online brokers. But the fact is the brokerage charged by the same broker varies and in several cases is negotiable. For example if you go and tell a brokerage house that you are going to deposit 2 lakh rupees and try to convince them you are going to trade heavily, they might consider reducing your brokerage. That is why in the above table you will find only a range for the brokerage charges in some cases. But that should be enough to get an idea.

• Effective brokerage with taxes is more: In addition to the above brokerage charges you will have to pay STT (Securities Transaction Tax) at the rate or 0.02% of the total transaction amount. You will also be charged 12.5% Service Tax on the brokerage amount (and not on the transaction amount). For example, if your brokerage is 0.50% for delivery and you do a delivery transaction of Rs.100/- then the total brokerage you pay is
  0.50 (brokerage) + 0.02 (stt) + 0.063 (service tax) = 0.58 .
  Thus your effective brokerage (including all taxes) will be 0.58%. Similarly for brokerage on intraday transactions.

• One may also like to compare brokerages charged by the online brokers mentioned above for trading in futures and options. I have traded options on SBICAP securities and have been charged Rs.100/- flat brokerage fee for every options trade. I will probably find out and also add a comparison table for brokerage charges for trading derivatives (futures and options) later, if i see enough people google searching for the same. For futures, some online brokers charge different brokerage for different legs of the trade, i.e. different for buy and sell trade.
  

• Except SBICAP Securities, I do not have any other trading account. So my information is gathered from indirect sources. In case there are any inacurracies please let me know by posting a comment.
  

Dmat Accounts, Online Trading Accounts in India Compare Brokerage Charges in India Dmat Account : Think Beyond Savings Account Compare Demat Accounts How to buy shares using demat account? How to Open a Demat Account? How to choose the best Demat Account? How to transfer shares between Demat Accounts? Demat + Trading Account CitiBank Demat Account Charges HDFC Demat Account Charges SBI Demat Account Charges Sharekhan Demat Account Charges

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I would like to illlustrate with my own personal experience how systematic investment plan helped me. In November 2007 I wanted to make an investment in mutual funds for tax saving purpose and also because that was the time when stocks were very popular because of the crazy bull run. Now I would have had two choices, either invest, let say 1.2 lacs lumpsome in the stock market. or invest 10K every month (which means choose SIP). I chose the systematic investment plan. And I am very glad about that decision. Because the markets have fallen about 40% since then. Had i put all my money in stock market in that month itself, my losses would have been comparable to 40%. But now, although I am still in the negative terrain, my losses are less than half of what they would have been. because i kept putting money every month. I also put money when nifty touched 3700, the current bottom and that part of the investment is currently in the profitable region and hence my losses have been reduced.

You may think that it would have then be better to 'time the market' and put the money when nifty was around 3700. There are two problems with this. First i recall a friends experience where he did try to time the market and put money after the january drop, when nifty dropped from 5600 to around 4800 or something like that. But when he invested, the market kept droppping further. Even say I would have put the money with nifty @ 3700, how do i know nifty wont drop further ? Infact in all probability i think it is going to make a new bottom in the coming year. Who knows?

Thus in conclusion, if you want to reduce the risk you better choose SIP over lumpsome investment in mutual funds. Another advantage is that for most people it is easier to arrange or save money on a monthly basis rather than doing a bulk saving.


Related posts :

• Introduction to Mutual Funds
• Tips for selecting a mutual fund
• This is not a good time to invest in mutual funds
• Liquid Funds : What, Why, How, etc.
  

Read more ...

Crude Oil is now touching $120. The reason spotted is that the Hurricane heading towards Mexico might cause a lot of damage to the oil companies located there.
But I remember the crude oil shedding some dollars a few days ago when the reason cited was that the Hurricane might not cause significant damage. Now what happened?

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Some miscellaneous information not covered by other posts in this blog on SBICAP Securities.

1) Account Opening Charges : Nil.- (*please read comments)
2) Charting : No
3) After market order (AMO) : Yes
4) Exposure for Intraday : 5 times the available cash.
5) Password system : You use two passwords , one login password and one trading password to login to SBICAP Securities. The Login password needs to be changed every 14 days. You are however not required to change the trading password.

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This is how SBICAP Seucirites internet trading platform looks like. This picture is taken after market hours. During market hours the quotes / tickers are live and as in any other trading platform they are blue or red in colour accordingly as the ticker increases or decreases in value.

Some highlights of my experience with Internet Trading Platform of SBICAP Securities :
1. Overall I am happy with the experience. But if you are a heavy volume active Intraday trader, i am not sure you will be as satisfied.
2. Have had problems with this platform working on linux. I can watch quotes but the screen hangs while placing orders. With windows it works perfect. However I have been able to modify orders on linux machines. Strangely not been able to cancel orders there. But then to cancel an order i just modify the status of the order from "DAY" to "IOC". An IOC order means Immediate or Cancel order.


Recently SBICAP Securities have also launched one more trading platform called as "LITE" which is mainly meant for dialup users or users who do not care about live streaming quotes. You can still get quotes of stocks but you have to click on 'refresh'. You can place all buy / seel orders for equities as well as F&O as you can for the normal internet trading platform. For me, LITE has been useful because i am unable to place orders with the normal internet trading platform on linux machines in my office. The snapshot (taken after market hours) of LITE trading platform is shown below.



Some highlits of my experience with LITE.
1. The quote shown in LITE is sometimes not updated, i.e. it shows wrong quote. LITE is definitely not suitable for Intraday traders. For other traders it is good enough.
2. Once I suspect my sell order for a nifty option did not go through even though the price of the option , at least according to the NSE website went higher than my sell price.
3. Other than the experience mentioned in 2., LITE has worked ok. But I recommend watching / keeping an eye on nse website for quotes while using LITE.

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The contents of this post have been moved to

Review of SBICAP Securities

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This is a FREE Indian Income Tax Calculator for the financial year 2008-2009, available for free preview and download. Enter your annual income, deductions and calculate your income tax. The calculator is very easy to use and looks as shown below. You can download the Income Tax calculator in excel spreadsheet format by clicking on

Download Latest Income Tax Calculator - India - 2008/2009 - Excel spreadsheet

The above calculator takes into consideration the 3% education cess and 10% surcharge on taxable income exceeding 10lacs. Click here for details on income tax slabs for the financial year Apr 2008 to Mar 2009.

If you do not want to download anything, and are interested in a no download, or online Income Tax calculator, you may find one on the Indian Income Tax department website. To access that calculator click here. For this India Income Tax calculator, no download is necessary.

Related posts:

• Income Tax made easy
  
• How to pay your income tax online?
• Indian Income Tax Act - Tax Deductions, Tax Exemptions, Section 80C,80D,80DD,80E, etc.

Income Tax Slabs India - Financial Year 2008/2009 and 2009/2010. The IT slabs for 2009/2010 are the same as the slabs in 2008/2009. Income Tax Calculator - 2008/2009 (also good for A.Y. 2009/2010 since the tax slabs are unchanged for 2009/2010). This Income Tax Calculator is in Excel Spreadsheet format. India Income Tax deductions - Various Income Tax deductions under section 80C, section 80D, section 80DD, section 80G, section 80GG, section 80E, section 24, etc. and their max. tax exemption limits allowed under the Indian Income Tax Act discussed in this post. All Indian IT deductions in one single post. Tax deduction under Section 80C: The most common income tax deduction for Indians discussed in detail. Use this for your personal tax planning and save upto Rs. 33,000 Income Tax. How to pay your Indian Income Tax online? How to check your Income Tax Refund Status online?

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Here is a simple EMI calculator. Enter the amount of loan, loan tenure (in months), interest rate. And get the value of EMI or monthly installment. The excel calculator looks like this and can be downloaded from this link.

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Daiichi Sankyo has given an open offer for buying over one third of Ranbaxy shares @Rs.737 per share in the open market. The offer letter can be downloaded here.

You can find details about the open offer on the sebi website. I have very often have had problems loading the SEBI website. Also check this blog.

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This is a super quick introduction to mutual funds.

Mutual funds are institutions which collect money from people and invest them in the stock market. There are also mutual funds investing in gold or other things but let me write everything in the context of mutual funds investing in stock markets and the concepts will be the same for other mutual funds.

FAQ

Q) Why should one invest in a mutual fund ?
A) There are two main reasons. The first reason is that investment in mutual funds have the potential to earn more returns than standard investments like fixed deposits in a bank. For example when the Indian economy was doing good from 2003 to 2007, mutual funds have given an average returns of over 30% per anum. This is much more than any bank would have given. However, this performance cannot always guaranteed and hence it is best not to put all your money in the stock market but also keep some in the safe fixed deposits which are not subject to market risks. The second reason is tax benefit. Certain mutual funds in India qualify for tax exemption under section 80 C. However note that not all mutual funds are eligible for such a deduction. A mutual fund usually mentions if its investments qualify for deductions under 80C. It is important to remember that currently all mutual funds which qualify for deductions under 80C have a lock-in period of three years. That is if you invest your money today, you wont be able to liquidate your investment only after three years.

Q) What is NAV ?
A) NAV is an acronym for Net Asset Value. The total assets , (i.e. money or cash and current value of investments) of the mutual fund is divided into small imaginary units. The price of one such unit is called Net asset value or NAV. For example when you invest say Rs. 10,000 in a mutual fund whose price of one unit, or NAV is Rs. 100, you actually buy 100 units of that mutual fund. When the mutual fund makes profit, the price of each of its units goes up. Thus suppose it makes 50% profit, then the number of units you hold will still remain to be 100, but the NAV, or price of each unit will increase from 100 to 150. Note that mutual funds also deal with fractional parts of the units.

Q) What is SIP ?
A) SIP is an acronym for Systematic Investment Plan. This is an investment plan where you invest a fixed amount of money every month instead of investing a lumpsome amount. The obvious advantage of an SIP is that you do not have to have a lumpsome amount to invest and can plan to keep aside a fixed portion of your salary every month. But the main advantage of investing in an SIP is that it is less risky than investing a lumpsome amount. Lets take an example. Suppose you want to invest rupees 50,000. Currently the market index is at , say 4000. If you invest all money today, and if the market goes down, then you will end up making a loss. You would have done better by investing when the market goes down. On the other hand, if you invest a fixed amount periodically, you will invest a portion today, and also a portion when the market goes down. Thus you will 'average out' the market risk to some extent. Thus SIP is a way of minimizing risk. It may not necessarily be a way of maximising returns, however. For people who do not have a thorough understanding of the market and the economy , SIP is highly recommended.

Q) What is Entry Load ?
A) When you invest in a mutual fund, the mutual fund charges you a fee as soon as you invest. Currently the typical value is around 2.25% of your initial investment. This fee is called as an entry load.

Q) What is Exit Load ?
A) Exit Load is a fee which some mutual funds charge when you liquidate your investment. Typically tax-saving mutual funds do not charge exit loads. So if you are investing partly for tax saving reasons, look for a mutual fund which does not charge an exit load.

Q) What is an Open ended mutual fund or an open ended scheme ?
A) Mutual Funds in which you can liquidate your investments, i.e. sell your units any time you wish are called open ended mutual funds. As mentioned above, mutual funds which qualify for tax-saving purpose are not open ended. Moreover Open ended mutual funds often charge an exit load if you sell your units before a specified time (for example they have a typical exit load of 2.25% if you exit before 6 months).

Q) What is a Closed ended mutual fund or a closed ended scheme ?
A) These are mutual funds which have a lock-in period, typically 3 years for tax saving mutual funds. If you invest today in a closed ended mutual fund, you will not be able to sell your units and get your money back before the expiry of the lock-in period.

Q) How to exit or stop an SIP ?
A) Suppose you start an SIP in a mutual fund which has a lock in period of 3 years and after a couple of months you want to stop investing. Ofcourse since the lock-in period is 3 years you wont be able to liquidate the investment that you have already made before the end of 3rd year. But you can stop your SIP, i.e. stop putting more money provided (in some cases after you have completed 6 months) by simply giving a one month notice to the respective mutual fund office.


Related posts :

• My own experience with Systematic Investment Plan (SIP)
• Tips for selecting a mutual fund
• This is not a good time to invest in mutual funds
• ETFs in India - All those "BeES" on NSE
• Liquid Funds : What, Why, How, etc.
• GOLD ETF - Invest in gold without buying gold
• 
  
  

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When I just learned about basics of analysing a company , back a few months ago, i thought that tata steel at 650 was a screaming buy ! just look at a company which is trading at around 3.25 P/E currently and which has managed to triple its net profit in 2007-2008. ! agreed, the economies are going down and tata steel is burdened with debt after corus aquisition and all that. but 3.25 P/E, how worse can it get?


I am definitely looking for an opportunity to make some long term investment here. But no decision on that before october end. Gotta watch results for the quarter ending september/october , of India and all over. Several blogs have been screaming about july being worst as far as housing is concerned for the US. I have also been watching arcelor mittal for the past month or slightly more thinking that price movements of the largest steel producer in the world will reflect the fate of the global steel industry in general. It has been dropping more or less consistently. when i started looking at it it was trading at around 10.5 p/e. Now it is trading at around 7.9 P/E.

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Last traded price of Nifty : 4327
Last traded price of Nifty Aug28 future : 4337 ( +10 premium )

Three most active calls.

ifty Call	OI	Change in OI	Price
4400 CE	29 lacs	-63 K	21.40
4300 CE	18 lacs	-329 K	70.10
4500 CE	37 lacs	-175 K	6.00

Three most active puts.

Nifty Put	OI	Change in OI	Price
4300 PE	29 lacs	-193 K	34.75
4400 PE	26 lacs	+ 10 K	81.60
4200 PE	24 lacs	-134 K	12.20

Not much to say by merely watching change in open interest here. But during the market hours, roughly at around 1 pm, i had noticed a huge , something like +455 K change in OI of 4300 PE and 4400 PE. Well, the nifty shed around 40 points after that. This vindicates my stand change in OI is also good for short term, or intraday predictions. I'll keep posting such observations (or even observations contradictory to this claim :) ) as i keep noticing them.

I dont know how to take clues from put calls in the last few days of F & O expiry. Maybe one should also peep into what is happening with the next month options to get a better picture in the last week of F&O expiry. Also since there is no significant change in OI i will spare myself the trouble of calculating implied volatility.

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Ever since crude dropped straight from $147 to $113, the demand seems to be dropping and the dollar strenghtening. Inspite of this crude oil is still around $115, thanks to georgian crisis. I would have imagined the georgian crisis to be over after truce calls. But now georgia is out of the picture and US is in. now the tensions are between two equals or at least comparable players. Who knows how long will crude wait at 115 for the next downward move ?

Remember, currently the crude oil has completely ignored possibilities of attack on Iran. The likeliness of this event seems to have definitely reduced with the current political instability in Israel. But nowhere have we seen an actual peaceful solution coming up through dialogues. Iran has been defiant and probably will remain so. Around december, if i remember correctly, Iran is to aquire anti aircraft weapons (from Russia ?) and if at all Israel is planning for an attack, they will definitely watch this date. Another warning from Israel to Iran and the crude will shoot up by god knows how much !. So maybe the first question to ask is, despite demand destruction, will the crude oil drop below $100 in the coming month or two ?

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This is a free Home Loan EMI calculator. Enter the amount of your home loan, interest rate, tenure (in years) and the calculator will calculate the EMI ( monthly installment ) for you. The excel calculator looks as shown below and can be downloaded here.

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This is a FREE and a simple calculator for calculating EMI (equated monthly installment) on your car loan. Enter the cost of your car, amount of downpayment (i.e. amount paid immediately while purchasing, the balance amount is your loan), interest rate and calculate EMI. Simple. The excel calculator looks as shown below and can be downloaded here.

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I've an online trading account with sbicap securities which is linked to my SBI Demat account. Here are details of my experience with them till today.

Brokerage :
1) Brokerage of 0.5% for deliver and 0.1% for intraday.
2) Brokerage for Options: 2.5% of Options premium or Rs. 100/-, whichever is higher.
3) Brokerage for Futures: 0.03% for square off (i.e. intraday) and 0.05% for carry forward.

Positives :
1) Good connection, never had problems of server failure.
2) I am located in Mumbai. Good customer service. I have always found someone to answer my complaints.
3) Can apply for IPO online. IPO and derviatives trading has been recently added. So shows they are trying hard to improve their services. Their customer service through email has also shown noticeable improvement.
4) Trading in both BSE and NSE possible.

Negatives :
1) Have had problems with stop loss order not working.
2) Whenver I have traded in options, they have miscalculated my profit and then later corrected it the next day. This problem can and should be solved soon.
3) Cannot apply for all mutual funds online. I think they have recently added the facility of applying for reliance mutual funds, but i have myself never used that. Anyway other mutual funds are yet to be available online. (update: The list of Mutual Funds available for buying through SBICAP Securities is growing. Read my post on Buying Mutual Funds through SBICAP Securities)


SBICAP Securities Online Trading Platform :

This is how SBICAP Seucirites internet trading platform looks like. This picture is taken after market hours. During market hours the quotes / tickers are live and as in any other trading platform they are blue or red in colour accordingly as the ticker increases or decreases in value.



Some highlights of my experience with Internet Trading Platform of SBICAP Securities :
1. Overall I am happy with the experience. But if you are a heavy volume active Intraday trader, i am not sure you will be as satisfied.
2. Have had problems with this platform working on linux. I can watch quotes but the screen hangs while placing orders. With windows it works perfect. However I have been able to modify orders on linux machines. Strangely not been able to cancel orders there. But then to cancel an order i just modify the status of the order from "DAY" to "IOC". An IOC order means Immediate or Cancel order.

Recently SBICAP Securities have also launched one more trading platform called as "LITE" which is mainly meant for dialup users or users who do not care about live streaming quotes. You can still get quotes of stocks but you have to click on 'refresh'. You can place all buy / seel orders for equities as well as F&O as you can for the normal internet trading platform. For me, LITE has been useful because i am unable to place orders with the normal internet trading platform on linux machines in my office. The snapshot (taken after market hours) of LITE trading platform is shown below.


Some highlits of my experience with LITE.
1. The quote shown in LITE is sometimes not updated, i.e. it shows wrong quote. LITE is definitely not suitable for Intraday traders. For other traders it is good enough.
2. Once I suspect my sell order for a nifty option did not go through even though the price of the option , at least according to the NSE website went higher than my sell price.
3. Other than the experience mentioned in 2., LITE has worked ok. But I recommend watching / keeping an eye on nse website for quotes while using LITE.


Experience with customer care service of SBICAP Securities :

Here is some practical information which is not so easily available even on the webpage of SBICAP Seucirites at the time of writing this.

Customer Care number for any questions / issues related to Ebroking : 022-30273342
Currently their website mentions customer care numbers here and they will transfer you to Ebroking account once you tell them your situation. (if your situation is related to ebroking ofcourse :) ). Instead you can directly call them on the above number (try even if you are not located in Mumbai) and there wont be any transfering.

Even if you are located somewhere else and call their brach, in order to avoid delay, you can quickly ask them to transfer you to Ebroking section immediately to save time and energy.

Customer Care Email Address : helpdesk@sbicapsec.com
Currently their website mentions two email addresses : sslcare@sbicapsec.com and complaints.ssl@sbicaps.com . Dont use these email addresses. Use helpdesk@sbicapsec.com

Experience with online customer care : helpdesk@sbicapsec.com

1. I had sent them an email complaining no one responds to my complaints sent by email. I recieved a call from them within one day (the lady tried to call me thrice, with two failed attempts). I felt good. Then she gave me the above ebroking number for any further issues i might have.

2. I had sent an email complaining that they charge 10% brokerage for options. Noone responded. By the way i was wrong. they do not charge 10% but a flat fee of Rs.100 per option trade, which just happened to be 10% in that particular trade. (update: the customer service of SBICAP seems to be improving. A few days ago i sent them an email asking brokerage for futures and options, i got a response within 2 hours!)

Experience with customer care ( phone ) : 022-30273342

1. Prompt and immediate resetting of password when i called them.
2. Immediate explaination of something i did not understand in their online trading system. I did not know what AMO meant. By the way it means After market order (orders you can place after market hours).
3. Immediate help offered to sell praj shares i had bought when i was unable to access a computer.
4. One slightly less satisfactory experience. I had called them to ask what is the difference between buying shares in 'margin account' and 'Intraday account'. The lady told me dont use margin account for cash market , use it only for F&0. She patiently talked to me, but failed to convince me why is Trading in Margin account shown as an option for the cash market if I am not supposed to use it. Anyway, the positive thing is the lady did talk to me for a while patiently.

Overall : full points for the customer care phone number. My issue was more or less always resolved.

Related posts :

• Comparison Table of Brokerage Charges in India
• SBICAP Securities : Miscellaneous details
• How to open a demat account ? (you can see a picture of my sbi demat account in this post)
  

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the market is still open but i have exited.
made a loss of about 1%. The banks did go down and no points for guessing that. Maybe they will go down further. But unfortunatley the signals i have decided to take as indicators for buy/sell, the change in open interest of options, were not favorable. To be honest they were not favorable even when i took a position, but my lack of discpline has caused me this loss.

I had shorted hdfcbank, icicibank and sbi.

Fortunately did not use a lot of leaverage, only 1.5. Otherwise high leverage or trading in options would have wiped out my yesterdays 11% gain.

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HDFC bank listed on Nasdaq has taken a hit. Has gone down more than 5%. There it is trading at a P/E of 29.5 and on NSE its trading at a P/E of 32.5. ICICI has also gone down 8%. wow thats a lot ! Its trading there at 19.87 P/E while on NSE its over 22.2 P/E. There is no doubt that banks are going to take a hit today. (Please read my disclaimer). So no buying calls or going long. that would be too risky. Oil is also more or less at the same level as yesterday.

Strategy : Short hdfcbank , icicibank.

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The signal that we got from put call out look yesterday is not consistent with the global cues. Perhaps it would be better to not trade today. I will wait and keep an eye on the changes in open interest of options and then decide after half an hour of the market. But definitely won't be aiming for a high profit. If at all i trade today, low stop loss and low profit will be the key. Perhaps trading in the cash market will be best instead of options. Also, it would be riskier to go long. Will post if i trade.

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crude oil has in fact jumped by about a dollar since i wrote the previous post. Here is the reason. I took this BBC news literally and thought the russia georgia conflict was over. The key part of the news is the quotes used in the title :).

I tried to find out how much of oil passes through georgian pipelines. It seems most of what Azerbaijan produces passes through Georgia. This is roughly 500K bbd. This may not appear that much as compared to total oil production of over 80million bbp, but it depends on how long these pipes are shut.

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A head on fight between unequals seldom lasts for long. Now there does not seem to be any obstacle for the crude to correct further. How far will it correct?

As far as crude consumption is concerned, the world can be divided into US and the non-US.
The current correction is due to major demand destruction in the US. There may have been some demand rise in other countries since last year. But the output has also been raised. If i am not wrong, the Saudis are pumping in about one milllion BBD extra than last year. This together with the fact that India China and several other countries have raised petrol prices will take care of the demand rise in non-US. So does that mean that the overall current demand for crude is more or less the same as one year ago? or at least we are approaching there. One year ago, the price of crude was around $75. So will that mean crude will correct to below $80? That would seem a bit too much, at for it to stabilise below $80, because too much of crude correction will again increase demand. I am clueless, however. I have started reading about crude (and in fact the stock market itself) only after Feb 2008. But certainly it looks like crude is heading below $100 before it stabilises. All this is assuming ofcourse Israel is currently incapable of attacking Iran.

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Three most active calls.

Nifty Call	OI	Change in OI	Price	Implied Volatility*
4600 CE	28 lacs	+465 K	109.10	33.4
4700 CE	32 lacs	+361 K	66.70	32.3
4800 CE	28 lacs	+234 K	36.40	31.0

Three most active puts.

Nifty Put	OI	Change in OI	Price	Implied Volatility*
4500 PE	26 lacs	-165 K	96.80	35.2
4600 PE	16 lacs	+50 K	138.15	33.1
4400 PE	34 lacs	+101 K	65.15	36.8

Some major increase in OI in the call options. The average implied volatility is of call options is about 32 while those of put options is about 35, slightly more. Tomorrow, if the market does not open way high, i may do intraday of nifty call 4700.

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bough nifty PE at 84.5 and sold it at 98.5. That was pure Intraday, can't take the risk of holding a put option overnight with falling crude, can't take the risk of holding a call overnight when its raining bad news about bad housing loans and talks of recession.

that was roughly 11% gain on today's investment after deduction of brokerage and taxes. It is possible that nifty will fall further. But i was so hungry for some profit booking that i decided to exit. The good thing about this trade was it was executed as I had planned and imagined yesterday.

But I have made a huge loss before I started this blog. Huge, means roughly around 35 to 40% in two or three days! that is the principal reason why i have started this blog. I hope that writing me force me to look at things more carefully and also help me evolve a strategy of options trading. I will also keep posting about losses i make, and hopefully that will help me correct my strategies. Definitely options trading (especially speculative trading) will require much more discipline. Looking regularly at numbers and data requires more discipline than intelligence or smartness.

From today onwards, i have decided to look at implied volatility, a parameter which I have been ignoring while buying options. More later in my next post on put call outlook.

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I came across this article in economic times which talks about fall in commercial rental rates. May be this is not the first article on drop in real estate prices, but the first that i have come across. Have to start looking for more such news. Especially in cities like Bangalore and Hyderabad.

If real estate prices do start dropping, then Indian Banks will probably start tracing the path that currently US Banks are walking. In the US the first phase of subprime was caused by housing loan defaults by relatively poor people with low credit history. If I would have to imagine subprime in India, i would imagine here the IT people would contribute to the first phase. With Europe/US heading towards recession, the IT industry, employing a large portion of the higher middle class in India will be one of the worst hit. Already they have starting laying off people. Imagine an IT guy/girl with 40-50K salary , and has taken 20Lacs rupees of housing loan is a victim of a mass lay-off. Add to this the effect of high interest rates, high inflation and dropping real estate prices. To me it looks like a perfect recepie for subprime !. As of now maybe this idea of subprime in India sounds too pessimistic. Who can tell? We will have to wait and watch.

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Three most active puts and calls.

Nifty Option	Open Interest	Chance in OI
4600 CE	2,396,350	20,4850 (+9%)
4700 CE	2,813,450	342,700 (+14%)
4800 CE	2,559,450	390,650 (+18%)
4500 PE	2,763,550	595,100 (+27%)
4400 PE	3,267,850	678,650 (+26%)
4600 PE	1,467,700	609,850 (+71%)

A large number of options added in open interest today, with put options added more than twice of those of call options. Tomorrow we might see nifty going down. Because oil may not immediately fall a lot until Georgia crisis cools down and by looking at those numbers added in PE options, it looks like everyone is expecting bad IIP numbers tomorrow.

In general we may be in for some huge up or down in the remaining part of this month. The long term fundamentals, after bad Q1 results, are trying to pull nifty down and falling crude is trying to push the global stocks and in particular nifty up. Inspite of Georgia crisis, the oil rose by only about a dollar. To me this is an indication that once Georgia crisis are over, ( maybe in a few days or one or two weeks? ) oil will fall further. Imagine a news "oil below $100", thats the reason for the open interest in all those call options, although several of you staring at the fundamentals maybe wondering, what the hell is Nifty doing above 4600 ?

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everyone was expecting a rally today. indeed nifty is currently around 4600 mark. I has bought nifty call 4700 at 89 purely for intraday. But then saw some really large increase in open interest of PE 4400 and PE 4500. Didn't want to take any risk, waited for about half an hour and i quit at 90.5. After deduction of brokerage, that is actually a minor loss.

at current levels of nifty, i am more comfortable buying puts rather than calls. nifty at 4600 in long term is highly unsustainable. bad news about credit crunch has never stopped pouring in.

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Three most active puts and calls.

Nifty Option	Open Interest	Chance in OI
4500 CE	2,866,650	181,000 (+6.74%)
4400 PE	2,589,200	243,800 (+10.39%)
4600 CE	2,191,500	600 (+0.03%)
4500 PE	2,168,450	134,150 (+6.59%)
4700 CE	2,470,750	86,150 (+3.61%)
4300 PE	3,550,600	135,700 (+3.97%)

Nifty August 28 Futures : +20 premium.

The market expectation is positive. However note the negligible change in OI of 4600 CE. Is this an indication that nifty will find it difficult to remain around 4600 and will either drop back or jump once it reaches 4600. We have seen this phenomenon twice in last week. Also, last week the market has been showing strong tendancy to hover around 4500.

This was on Friday. After that the crude has dropped another $4. It will be interesting to see how OI for 4600 CE changes this monday morning. The picture will become even more clearer on Tuesday after release of July IIP. The movement of crude, how much does it drop further and when / if will it rebound, remains a mystery for me. However since demand destruction is cited as the current cause of crude fall, it could fall further before / if it rebounds.

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IIP (Index of Industrial Production) for June 08 will be declared on Tuesday 12 th August. In May, the numbers were pathetic, with IIP increasing only 3.3% as compared to about 10% a year ago. Given current market conditions, encouraging numbers will come as a surprise. So be careful on Tuesday if you are long.

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This is a personal blog. Nothing here is meant to be a tip or investment advice. I assume no responsibility for accuracy or authenticity of any information written here and for any losses incurred due to investments made based on anything written or implied by the contents here. Apply your own brains, do your own research and make your own decisions. Please. It is your money.

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Here is the latest information on the top 3 most active nifty calls and nifty puts.

Broadly speaking, let us put factors which influence movement of the market into two (interdependent) categories
1) facts / news.
2) sentiments.

The second one is more abstract and sometimes harder to understand merely by reading newspapers. In the absence of significant big news the second factor is what controls short term movement of the market.

what could be a quantitative measure of the market sentiment ?

One of the simplest is the Premium or Discount at which the Nifty futures are trading. Too much premium is anticipation of forward movement and a discount is anticipation of a downward movement. However most of the times nifty trades at a premium of around 15 to 25 and in this case this measure is not fine enough. The other problem is that this measure is more an indicator of 'short term' movement of the nifty.

The other indicator is the change in open interest of options. Naturally, if a lot of people believe or fear the market is going to go down in the next few days/weeks, they will buy a lot of put options. So an unsual increase in the open interest of put options may be taken to be an indicator of the fact that the market expects the nifty to move downwards. Similarly a lot of buying of call options will indicate and anticipation of upward movement.

One has to be careful here though ! suppose a majority think the market is going down, not only will there be a lot of 'put buying' there may also be a lot of 'call selling'. So how to differentiate between 'call selling' and 'call buying'? Differentiating this may sound silly because one contract sold is also one contract bought. But this is where implied volatility comes into the picture for our help. If lot of people are trying to 'sell' call options, then the volatility implied by the call options will decrease. They will sell for a lesser price than the situation where lot of people are trying to 'buy' call options.

The put call outlook is all about trying to figure out and understand the market anticipation by looking at change in open interest of put and calls. Qualitatively it is easy. My goal here is to come up with a quantitative strategy.

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