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  1. Asked: In:

    What are the Reasons for Non-Allotment of Shares in an IPO?

    Kishore Contributor

    Factors Contributing to Non-allotment of IPO Shares: The following are some of the reasons behind non-allotment of shares in an IPO 1. Invalid Information in IPO Application Form: The application form must be thoroughly read before filling it. The information that you furnish must be correct and ifRead more

    Factors Contributing to Non-allotment of IPO Shares:

    The following are some of the reasons behind non-allotment of shares in an IPO

    1. Invalid Information in IPO Application Form:

    The application form must be thoroughly read before filling it. The information that you furnish must be correct and if wrong, your application shall be rejected immediately.

    The IPOs applications are designed and presented as per the rules and regulations set by SEBI. The registrar of the application needs to follow the SEBI guidelines properly.

    2. Bidding Price:

    If you have filed an application at the IPO having confronted oversubscription, then the bid price defines the winning moment.

    When your opted issuer’s IPO gets over subscripted then the issuer decides the final price. It is based on the bid investor offer.

    You will fail to obtain an allotment when your bid price happens to be lower than the issue price.

    Investors Bids Reduce Chance of Allotment:

    As long as the number of shares and the applicants are in the same ratio and not overly scripted allotment is easy.

    When the issuer’s IPO gets over scripted then the company does involve in the process of picking the application randomly. It is even known as the lottery.

    Tips to Improve Probable Chances to Win Bidding

    Follow these simple steps to maximize the chances of Allotment of shares

    Fill in IPO Application Details Properly

    You will need to fill in your application correctly. Remember, if you make wrong entries then you are most likely to get your application rejected.

    Skip Big Applications for IPO Bidding

    It is a myth to say that big applications are more valued by the issuer at the IPOs. You may prefer a big application but end up in trouble, there is no guarantee in obtaining an IPO.

    In fact, SEBI has established a rule that states to provide the same importance whether it is big or normal application.

    Cut-off Price is Suggestive for IPO Application:

    In case of book building IPO, the issuer decides on the issue price after closing of the IPO submission date.

    In such cases, if you have applied for the upper cut-off price then the probability of winning the bid is higher.

    Apply through Multiple Demat Accounts

    If you feel that the issuer has good market credentials then an over subscription is most likely to happen.

    To strike a bid, if you attempt through multiple demat accounts then the chance of bid approval is higher.

    Apply for IPO ahead in time:

    It is quite usual that you procrastinate and the delay in submission of IPO applications can deliver wrong information. So completing the application and submission well ahead in time can save your energy and avoid stress.

    Advantage in Holding Shares in Parent Company:

    You can apply in the shareholders category and since you may find little competition here. Thereby increasing the chances of obtaining the share allotment.

    Study thoroughly Company’s Prospectus:

    The company’s prospectus explains in brief the important aspects of its performance, strengths, and risks. These details provide you a source of information before making final decisions on applying for IPO.

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  2. Asked: In:

    Which Algo Software is Best for Trading?

    Kishore Contributor

    List of Top 5 Algo Trading Software Apps With umpteen benefits an algo trading software provides, you must never be hesitant to know about the features led by the market players of Algo Trading. Here are the list of top 5 best trading software apps that can  provide you with high returns on your invRead more

    List of Top 5 Algo Trading Software Apps

    With umpteen benefits an algo trading software provides, you must never be hesitant to know about the features led by the market players of Algo Trading.

    Here are the list of top 5 best trading software apps that can  provide you with high returns on your investments. They are

    1. Zerodha Streak,
    2. Zerodha Algoz,
    3. Algotrader,
    4. Robotrade, and
    5. Rototrader.

    1. Zerodha Streak App:

    Are you wondering about a good algorithm platform? Then in India, Zerodha Streak is the best, as per the stock market analysts.

    1. It is highly recommendable for investors so if you want to make high profits then make an immediate entry into Zerodha Streak.
    2. You can benefit from its features like it possesses good technical insight, and holds precise back testing tools. At the same time, you must conduct proper validation and it would enable you to handle the risks effortlessly.
    3. In algorithm trading, a computer utilizes a preset instructions and executes trades and speeds of operations tend to show making of money quicker than manual trading.

    2. Zerodha Algoz:

    Zerodha Algoz is a wonderful app designed and launched in 2013 where millions have subscribed to it and the  current, the updated features provide a great friendly insight.

    1. It is user friendly software that generates charting to deduce profitable strategy. You can obtain display charts depending on the predefined time frames, such as 1-minute, 5-minute, 1-hour, and you can have access to charts up-to 3 years to examine the intra-trading activities.
    2. You will be exposed to huge historical data that can be utilized for backtesting with generation next tools, in addition, you have the provision to back test, write, partly, or automate the

    Merits:

    1. You can experience perfect strategy through technical analysis tools. You can back test by the analysis of various trading styles.
    2. You can utilise the partial or total automation of trading methods that are employed.
    3. You will receive complete technical support through their Customer care department.

    Demerits:

    1. You will need to have a knowledge of coding skills, you can apply for free editions but you will find a limitation as the trades are partially automated.
    2. You ( trader) can automate the process but you will require a dealer’s terminal service. It is not considered to be user friendly.

      3. Algotrader

    1. Currently, Algo trader, a swiss company is widely spread among Indian stock market traders and now it runs the updated 4.0 edition.
    2. You can find the merits and demerits of Algo traders when put to use, and here are some of the merits listed below.

    Merits:

    1. Algo Traders deploys a quick Esper Engine that can create 5 million events per second with greater accuracy and precision.
    2. The company has installed big data processing capabilities that can even handle high frequency trading and it is recognized by the institutional deals as it profits them.
    3. The software is simple to install and provides an easy self learning kit through manual/online training.
    4. The company makes use of modern technology, affordable, and uses most contemporary and reliable software.

    Demerits:

    1. Conducting a huge number of events per second and high market volatility can cause high losses.
    2. The operational system of the software may need manual intervention though it is an automated system. It doesn’t employ chart analysis and the intra trading patterns may widen the bid-ask spread.
    3. When the software does higher market integration, the technical malfunctions, an outcome, are bound to incur the losses.

    4. Robotrade Algo Trading App:

    Investors are fast relying on Robotrade, one of the most sophisticated and automated trading systems. The product is featured with real-time data, it also automates the investor’s stop loss. You can handle manually or conduct automatic trading. The order of execution will be sub-1 second, and it provides features that enable you in  testing your strategies and the software utilises AI  robotics. It provides an access to charting when executed, can provide a profitable strategy and also issues good technical insights. You can make use of multiple charts and templates simultaneously. The Robotrade supports National Stock Exchange, Bombay Stock Exchange, MCX, and F&O

    Merits:

    1. You can derive real-time information, and you can also opt for either manual trading or automated trading.
    2. The Robotrade software provides a success rate of 95 percent and it will fulfil a swift order.

    Demerit:

    1. The product doesn’t support mediocre client service.

    5. Robotrader:

    1. Robotrader is a free algo trading software and provides services to traders, technical analysts, and investors. They do cover the business needs of small, medium and high profile clients and hence, led to gain popularity in a short time.
    2. The Robotrader is equipped with many fascinating features that have made it highly attractive. The software can handle many scripts at a time, if a trader finds it unimpressive with the analysis, you can close the traders manually. You can opt for multiple stop loss options, and you can have better analysis through the technical insights with supportive charting software. You can be involved in reverse trading as well. You can opt for numerous orders and it is made possible through buy/sell index signals.
    3. You( trader) can set daily profit/loss limits, adopt quant trading methods, and the software provides multi-user plug in, and most importantly you can have direct access to cloud technology hence you need not download the analytics.

    Merits:

    1. You are provided with the feature that allows you to participate in free reverse trading. You are allowed to set upper limits for daily risks and also your desired profit percentages.
    2. The software features drag-and-drop strategy combinations by avoiding scripting. You shall be supported with trader friendly alternatives as well.

    Demerits:

    1. You shall be provided access to free trading but it is limited in form. You will need to have analytical and programming skills to utilise the software tool effectively.
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  3. Asked: In:

    How can I Buy Shares When it Hits Upper Circuit?

    Kishore Contributor

    Can I buy stock when upper circuit? If your purpose is to buy shares in the stock exchange specifically when the stocks hit the upper circuit then you must follow the stated tips. But, are you aware, what is the circuit limit? It is the crucial element in managing the trading activity when stock priRead more

    Can I buy stock when upper circuit?

    If your purpose is to buy shares in the stock exchange specifically when the stocks hit the upper circuit then you must follow the stated tips.

    But, are you aware, what is the circuit limit? It is the crucial element in managing the trading activity when stock prices go up and down indefinitely.

    Such a sharp rise and fall in stock prices happens only when traders perform excessive trading to make profits exceptionally.

    SEBI and the stock exchange have devised checks and counter checks to keep a track on the stock price movements by setting upper and lower circuit limits.

    Extreme stock price fluctuations occur due to several reasons such as: Sometimes positive news announcements can make specific stocks prices rapidly rise or bad news can make the stocks prices go downward.

    When there is high volatility of stock price, the SEBI uses the upper circuit to regulate such price fluctuations.

    If the index hits the upper circuit then the trading shall come to a halt for a while. The circuit limits for stock indices like Nifty & Sensex will be in order of 10%, 15%, and 20%.

    Note: A similar situation prevails when volatility goes low and the index hits the lower circuit.

    Trading in the Upper Circuit Stocks:

    The answer to your question, yes you can do trading in the Upper Circuit Stocks provided as and when the stock exchange releases the circuit to conduct trading.

    The trading in this region can be proven as profitable and it keeps you in a risk zone.

    You must be keen in market dynamics, conduct technical analysis, and risk management.

    Once the circuit is released you must practice daily monitoring, and analyse the hourly charts. By doing so, you can obtain maximum gains and avoid trappage in the lower circuits.

    You can encounter the buying sessions easily as the circuit levels begin to fall.

    Circuits Keep Regulates the stock market price manipulations:

    More specifically, these circuit limits are set up to regulate price fluctuations in a day such as intraday trading.

    Certain days, traders get euphoric in buying shares then these circuits limit the market fluctuations. It also controls the stock price manipulations caused by the stock traders.

    Stock Exchanges Declare Circuit Limits Daily:

    SEBI keeps a check on the circuit limits day in and day out while the stock exchanges announce the stock filters in their websites daily.

    The moment the stock hits the upper limit, the exchange does apply a circuit limit of 20 percent upon the closing stock price of the previous day.

    Despite the setting of stock filters if the stock continues to maintain volatility then the exchange shall transfer the stock to the T2T segment.

    Then, the deliverables are made compulsory and this info can be obtained on the stock exchange website.

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  4. Asked: In:

    What is the Best Site for Paper Trading in India?

    Kishore Contributor

    Best Paper Trading Websites In India Private websites have chosen to deliver  paper trading experience to their clients in a virtual environment. To provide such experiences, software companies have introduced simulators that give the right kind of feel you would encounter in a paper trading marketRead more

    Best Paper Trading Websites In India

    Private websites have chosen to deliver  paper trading experience to their clients in a virtual environment. To provide such experiences, software companies have introduced simulators that give the right kind of feel you would encounter in a paper trading market environment in India.

    You can learn stock handling skills, tactics that are needed without participating in the real money transactions. When you begin to win in paper trades it is an indication that you have mastered the art of stock trading.

    You too can try paper trading before making an entry into the real time trading environment and gain a wealth of knowledge and skill sets.

    Paper Trading in India:

    • Stock market websites provide data collected from various stock exchanges and put on their platform to practice paper trading.
    • Most of the websites adopt user friendly designs that provide copy trade options allowing you to make a copy of those trades.
    • These websites help you in harnessing the market abilities and some of the additional features they hold is the guideline on stocks, videos, conduct competitions and award prizes.
    • Some websites support the paper trading practitioners by exposing them to industry -specific certifications.
    • The website does provide you with virtual money to the order of INR 10 lakhs to practice paper trade just to learn skill sets and analytics.
    • When you sign in an account and register for the paper trading you can experience the actual stock market trading practically.

    List of the Best Paper Trading Websites in India:

    You can find a list of the paper trading websites and platforms in India, if you visualize trading websites you will find specifics issues.

    Each website will have something special to deliver therefore you must search for the best trading websites and I am sure that your research for the best paper trading in India will be complete.

    The best paper trading websites and platforms are Trading view, Neostox, Money Bhai, Chatmantra, Sensibull, etc.

    Just detailing out the key issues of these paper trading platforms for you

    1. Trading view is equipped with advanced charting and analytic tools.
    2. Neostox, a virtual platform will provide you sufficient space to conduct paper trade stocks, futures, and options with real time data without collecting the brokerage charges.
    3. MoneyBhai is a free paper trade simulator that provides you a virtual cash of INR 1 crore for practicing trade.
    4. Chartmantra is a trading platform that enhances knowledge on brokerage, taxes, and margins.
    5. Sensibull, is another paper trading platform that encourages options trading that comprise strategies, analytics, and alerts.
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  5. Asked: In:

    What is Margin Shortfall Penalty?

    Kishore Contributor

    What are Margins and Margin Shortfall Penalty? You need not panic if you receive a margin shortfall penalty from the stock exchange. It is a simple fine that is levied by SEBI on those traders failing to maintain sufficient margins for all positions in trade options. Essentially, you will be leviedRead more

    What are Margins and Margin Shortfall Penalty?

    You need not panic if you receive a margin shortfall penalty from the stock exchange. It is a simple fine that is levied by SEBI on those traders failing to maintain sufficient margins for all positions in trade options.

    Essentially, you will be levied to pay a penalty whenever there is a margin shortfall. Such a margin shortfall may occur due to an increase in margins by exchanges, or stapled with market losses or on the removal of spread or hedge position.

    You as an investor must follow the regulated SEBI rules such as the updated SPAN, and Exposures. You must maintain stock physical delivery margins when you are allocated with derivatives all the time.

    Otherwise , you may fall prey to two types of margin shortfall penalties and they are EOD & Peak Margin Shortfall.

    The penalty is applied on your margin shortfalls by the stock exchanges and usually, it will be a percentage of the shortfall amount.

    Another additional amount on the penalty known to be GST (18%) shall be applicable, and likely to be deducted from the trading account.

    Reasons that Bind to Margin Shortfall

    When you take an option position there may be an increase in margin and this can be due to three specific reasons.

    1. If the stock market leads to marked losses this will also bring about a shortfall of margins.
    2. You may square off one leg from the spread or hedge position and thereby the unhedged leg’s margin will increase as a result of it.
    3. Exchange may increase SPAN during the intraday.

    Balancing the Margin Shortfall:

    1. During your intraday trading, the exchange snaps the trading performance and picks the highest peak margin and any shortfall observed shall be levied according to the stock exchange framework.
    2. After the closure of the day’s trading, you are expected to maintain sufficient EOD margin SPAN + ELM for open positions.
    3. Your current day’s margin is compared with the exchange margin. If both the margins do not match to be equal then you (client) are liable to pay EOD margin shortfall penalty.

    Percentage of the Margin Penalty:

    The penalty structure shall be applied when you encounter situations such as : short reporting by you (client) or absence of clearing members per instance or peak margin.

    If the margin held by you (client) is less than 1 lakh or less than 10 percent of the applicable margin then the penalty will be 0.5 percent. Likewise, margin > 1 lakh or > 10 percent of the applicable margin, the penalty will be 1.0 percent.

    If the margin shortfall is more than 3 consecutive days then the penalty will be 5 percent and if the margin shortfall continues for more than 5 days in a month then penalty will be 5 percent each day.

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