Online Finance Solution and Tips for all

Category: Trading

  • Why is investing in US market stocks your best bet?

    Why is investing in US market stocks your best bet?

    Introduction to the stock market:

    The US stock market is the world’s leading global financial market. When diversifying one’s portfolio, the US stock market remains one of the top investment choices. It’s a ground for the most prominent investors in the world, generating daily investor wealth.

    How to buy US stocks from India?

    One can easily invest in the US stock market from India in these two ways:

    # Direct investment in the US stock market

    One can open an overseas trading account with a domestic or foreign broker and directly invest in the US stock market.

    Domestic brokers act as intermediaries and have tie-ups with stock brokers in the US. Another way is opening an overseas trading account directly with a foreign broker in India. The fees for opening an account are required to be understood beforehand.

    # Indirect investment in the US stock market

    Some indirect investment modes include mutual funds, Exchange Traded Funds (ETFs), and New-Age Apps. Numerous mutual funds exclusively focus on US stocks. Like domestic investments, one can take an indirect position in US stocks without really investing in them directly.

    Benefits of investing in the US stocks

    # More stability

    The US stock market is more stable, and long-term investments are less volatile than in India. Stock prices in the US fluctuate less, and the money growth tends to remain more steady.

    # The dollar value

    The US dollar is one of the prominent and strongest currencies worldwide and rarely fluctuates in value. Investing in US dollars is an excellent way to create long-term financial stability.

    # Excellent returns

    The US stock market consists of some of the biggest companies in the world. Over the years, top global IT companies have produced greater returns. Thus, one can own Apple, Tesla, Microsoft, etc for long term wealth.

    # Exposure to new markets

    Some of the leading companies are based in the US, and to become a part of such a company’s growth, one will have to invest in US stocks.

    # Mark index of the US

    To ensure good returns in the US stock market, one can check out the US market indices and combine the benefits of the top companies.

    Conclusion:

    The US stock market exposes a wider market with a significant return increase and reduced risk. Soon, you can use the Fi.Money app to start investing in US Stocks. Fi simplifies the world of US stocks with an intuitive user interface. In addition to in-app explainers, novice investors can use Curated Collections (like All-Time Favourites). A wide range of international options are available to seasoned investors who can dive deeper and apply many filters (like Stock Price).  Stay tuned to the Fi Money app for more!

  • What if you’re a complete novice when it comes to currency or Forex trading?

    What if you’re a complete novice when it comes to currency or Forex trading?

    The foreign exchange market is a market in which currencies are exchanged for one another. Do you want to learn how to profitably trade currency pairs in order to maximise your profits? This forex tutorial has been created just for you!

    In the English language, the term Forex is an acronym for Foreign Exchange (or Foreign Exchange Trading). In French, this is the phrase that is used to describe to the market where money deals are carried out. To convert the currency of their home country into the currency of their destination country, travellers might resort to the forex market while on the road. This is especially true if they are travelling abroad.

    The market is now experiencing significant volatility. It is true that the value of currencies fluctuates on a regular basis. This allows for the possibility of making money off of volatility in the currency market in order to acquire foreign currency. It is believed that the current currency system was established and implemented as a consequence of the Bretton Woods agreement, which was signed in 1971 and came into effect in 1972. There are a great number of traders that make substantial earnings in this market. Something that will persuade other people to join you in your endeavor will be required. For Currency Trading this happens to be perfect.

    Foreign Exchange Trading: The Fundamentals of the Market

    Forex trading is the exchange of one currency for another currency, such as the Swiss franc CHF for the euro EUR, in order to make a profit on the deal. A variety of various currencies are available on the market at any one time. The rate at which a currency pair is transformed into another currency is referred to as the exchange rate. As an example, the conversion rate for the CHF / EUR pair is 1.50 cents per euro at the time of writing. This shows that one CHF is worth the same as one EUR 50 in terms of money. If you choose to exchange euros for dollars rather than dollars for euros. In this case, one euro will be exchanged for one-fifth of a Swiss franc, or 0.666 CHF, for every other euro.

    When you trade forex, you are acquiring one currency with the intention of selling it later at a higher price when the value of the currency increases. Thus, the realized profits equal the difference between the asset’s acquisition price and its sale price. If the price of the currency market does not fluctuate in your favor, you will suffer a loss on your investment, as explained above.

    Learn the basics of internet trading

    It is possible to trade on the foreign currency market at any time of day or night seven days a week. Making advantage of this feature will allow you to learn how to trade online at your own speed. The ability to make forex investments is made possible by a profusion of internet-based businesses. They are referred to as brokers in the industry. Choose a currency pair to operate with before beginning your trading session. Then you make an effort to predict how the price of this one will evolve at the end of a certain time period that has been previously specified. Your task will be to determine how much money you will put on the line with your choice of wager.

    Your earnings will be credited to your account if you have correctly anticipated the result of the trading session at the completion of the session. When it comes to speculative mistakes, on the other hand, you will lose your whole investment in the process. As you’ve found, this is a market with a high level of risk. When it comes to minimizing losses, traders may frequently rely on a range of tools provided by their brokers. The stop loss order, for example, allows you to define a maximum loss level that must not be exceeded in the event that the market swings against you during a trading session.

    However, there are various ways accessible to you to assist you in increasing your revenue, such as the use of leverage. Investments made with money that you do not have are made possible via the latter method. It is more accurately stated as a loan from the broker to make a financial investment. The fact that you are utilizing this strategy, however, should be noticed since it increases the possibility of losing even more money in the long term.

    Conclusion

    Demo accounts, which are given by the majority of brokers, are a good way for new traders to get some practice in. Individuals are able to practice and progress as a result of these without having to be concerned about losing their financial resources.

  • Smartest Choices You Can Take in Online Trading

    Smartest Choices You Can Take in Online Trading

    Learning to Trading tips requires patience. Fortunately, there are many courses and tools that can help investors in this process. Selling covered call options to generate income is a great way to take your first steps in the options market before moving to buying call or put options.

    We will examine these two basic strategies that are suitable for first-time investors who are on their first option. Use the online options to easily explore, analyze and visualize these strategies before trading. To be successful, it is imperative to understand the potential risks and returns of an operation before executing it.

    Covered call writing

    The writing of covered call options is a basic strategy that does not add any additional risk, while generating income through the writing of call options on shares held in the portfolio. It can be used in almost any market situation and does not have to be used with bullish or bearish forecasts. Start by selecting short-term options (3-7 weeks) with strike prices that have a low probability of being in the market at maturity (delta of 20 to 30). In addition, the writing of covered call options does not require an active daily monitoring of the position before the end of the week is imminent. Watch the recording of our webinar to learn more about this strategy and best practices for generating income through covered call options (“Generating Income using Covered Calls”).

    Purchase of options to buy or sell

    In the event of a strongly bullish or bearish forecast for a stock or exchange-traded fund (ETF), the purchase of call or put options is a basic strategy for speculate according to these forecasts while incurring a limited risk. It can be used when the price of the underlying shatters a floor or a ceiling or, conversely, when it does not succeed and turns around, always depending on whether the investor’s forecasts are bullish or bearish. Buying call options based on bullish forecasts or buying put options following bearish forecasts is a simple way to get started. Choose options with a maturity of approximately 1 or 2 months and a strike price slightly in the price (delta 60). Be sure to clear your position before maturity, once you’re bullish or bearish forecast for the stock or the ETF’s share is confirmed or contradicted. A very common mistake is to keep a buy or sell option too long. Watch the recording of our webinar on trading your first option (“Trading Your First Option”) for advice.

    There are many other things to learn about option trading. Having the right tools will make learning easier and intuitive. Resources such as the Stock Exchange’s Stock Option Reference Manual and Online options are very useful for beginners. Print the infographic document of this ticket for your first option operation.

    Getting Started Guide to Option Trading

    If you are used to trading stocks, you need to have a pretty good understanding of the workings of buying and selling stocks. Undertaking option trading is relatively simple. Here are some essentials before embarking on this new adventure.

    Open an option account with your broker

    The option account can be a registered account or a margin account. There are some differences in the use of these two types of accounts. For example, when trading options in a registered account, it is possible (1) to buy and sell call and put options or (2) to write covered call options. Other option strategies are not permitted because of Canada Revenue Agency regulations. On the other hand, in a margin option account, all option strategies imaginable can be implemented.

    Browsing an option string is equivalent to viewing an action’s rating

    A chain of options is like a list of all the strike prices and maturities of the options available for trading. An example of a chain of options is presented below. Options may have weekly maturities or long maturities. The options are divided into two groups, namely call options and put options. A call option gives the holder the right to purchase a share at a specified exercise price. Conversely, a put option grants the holder the right to sell a share at a set strike price. The strike price is simply the guaranteed price at which the holder of an option can buy (call option) or sell (put option) the underlying stock.

    Last Words

    Opening Purchase means the purchase of an option to take a new position. In the stock universe, this is a purchase order.Closing Sale means the sale of an option to close an existing position. In the stock universe, it is a sell order. Opening Sale means the sale of an option that you do not hold. In the stock universe, it is a short sale. Close Purchase means the redemption of an option that you previously sold to close the position. In the equities universe, this is a hedge purchase.

  • ELSS Vs Gold Mutual Fund: Start investing and save taxes

    ELSS Vs Gold Mutual Fund: Start investing and save taxes

    Taxes are an essential aspect of the growth of any country. It helps the government build the infrastructure and the technology for a quality living experience.

    As a responsible citizen, it is your duty to ensure that you pay the right amount of tax.

    But there are certain situations in which you deserve a tax break. The government understands that and gives you enough options for you to apply for a tax break. If you are looking for investment options with a tax break, ELSS and gold mutual funds are two options that you could consider. Let us learn more about them.

    What are ELSS mutual funds?

    ELSS funds are a type of mutual fund that invests primarily in equities. It can be called a type of equity mutual fund, but the main difference here is the tax-saver part. They come under the section 80C of the income tax act, and hence, you can save up to Rs.1.5 lakh towards your contribution to the fund,

    Another difference here is the lock-in period. While other equity funds need not have a lock-in period, ELSS comes with a lock-in period of three years. But at the same time, ELSS’s lock-in period is among the lowest among other section 80C instruments.

    But ELSS’s tax benefits don’t end there. Since ELSS has a lock-in period, you can only withdraw the fund after at least three years. This means your returns will be considered long-term capital gains. Here, returns up to Rs.1 lakh are tax-exempt, and the rest is taxed at a flat 10%. This is much more affordable compared to short-term capital gains of a flat 20%.

    Hence, ELSS becomes an ideal option to get the advantage of the growth of the stock markets while savings some taxes as well.

    What are Gold mutual funds?

    Gold funds are mutual funds that invest in different forms of gold. Such a fund will invest in gold by investing in gold ETFs and other reserves of gold. Here, a gold mutual fund will aim at creating wealth by making use of the growth of gold as a commodity. It gives you the ability to reap benefits similar to that of purchasing physical gold, but without the hassle of charges that could come with it. Additionally, in the case of gold funds, experienced fund managers could ensure you get the best out of your investment.

    Taxation on gold mutual funds

    Most gold mutual funds are taxedsimilar to how physical gold is taxed.

    If you are selling gold in your individual capacity, you are subject to pay a tax rate of 20% plus a 4% cess on long-term capital gains. Your capital gains are considered long-term when you sell the gold after three years of purchasing.

    Short-term gains are included in your income and taxed accordingly.

    If your fund holds ETFs in your portfolio, then one ETF unit is considered to be one gram of gold and taxed accordingly.

    But even though they are taxed similarly, investing in gold bonds has some advantages over holding gold physically.

    The main advantage here is that it eliminates storage issues. Physically strong gold may prove to be dangerous even sometimes. But virtual gold will sit safely in your portfolio.

    Also, you don’t need to have a demat account to invest in gold funds, making it a bit easier as well.

    Both ETFs and gold mutual funds are good investment options. One thing that can help you choose between the two is understanding your goals and risk appetite. That information may help you plan your investments accordingly and help you with a decision in this scenario.

  • A Thorough Guide To Forex Trading

    A Thorough Guide To Forex Trading

    The forex market opens a global door that lets you transact and trade in international currencies. Although foreign exchange renders a profitable venture, forex trading for beginners can be regarded as overwhelming due to the widespread reach of the market.

    Forex Trading

    The act of dealing in currencies based on their price fluctuations, with an intent to make profits, is known as Fx or Forex trading. Several currency exchanges within the forex market are undertaken for practical reasons other than wealth creation. Further, traders also get the chance to predict and capitalize on the foreign currencies, depending on the price movements in the global market.

    Key Steps To Forex Trading

    1. CFD Trading Account 

    You can start by creating a CFD trading or spread betting account. Further, you can also run trials with a demo account and trade on forex pairs price fluctuations through a live account.

    1. Administer Research 

    To settle for the right forex pair, you need to execute research. Gear your trades with extensive market knowledge. Be updated with the trending news that affects the forex market.

    1. Time To Take A Decision 

    Once you have analyzed the global market, the next step is confirming your buy/sell decision. It’s the perfect time to ascertain which currency you’d like to take as a base, speculations on its future movements, and whether you’d give in to a buy or sell position.

    1. Don’t Skip On Strategizing 

    Picking a viable strategy that lowers risk and boosts profits can bring you a desired stance in the forex market. Moreover, setting up a strategy before initiating a trade can prep you for potential wins. Contrarily, moving ahead without any strategies or plans can make your journey directionless.

    1. Do the Deed- “Trade” 

    If you’ve managed to get through all the initial steps and are convinced of the currency you want to trade in, you can finally open your forex trading position. Next, ensure the entry and exit positions for your trade. Finally, take critical factors such as tools for risk management, like stop-losses or take-profits, into retrospection.

    1. Take The Time To Reflect

    Even if you make significant profits off your trade, your job isn’t done there. It is pivotal that you observe all the aspects that contributed to your profits/losses, whether the outcome is in line with your predictions, and if not, then why? It can help identify strategies that have worked for you. Ultimately, you can do more of what has driven the desirable results for you.

    Understanding Forex Trading

    Trading in the forex market implies investing in the resistance of one currency in exchange for another. For instance, if a trader goes long or buys GBP/USD, they anticipate that the pound will appreciate in value compared to the US dollar rate. On the other hand, if a trader goes short or sells AUD/EUR, they expect the Australian dollar to fall against the Euro.

    As we comprehend forex trading for beginners, it becomes essential that we walk through the forex trading basics. Let’s get a glimpse of some significant concepts;

    The Forex Market

    Foreign Exchange, or the Forex market, is a platform that enables individuals, firms, governments, banks, and financial institutions to deal in currencies. It sees an active average trading volume of approximately $5 trillion or more daily as the most dynamic market. Further, when forex traders participate in the Fx market, they classify currency pairs as minor, major, and emerging currency pairs.

    Amongst all the global currencies, the US dollar adds up to almost 60% of all the central bank’s forex reserves, making it a renowned currency. It justifies why the US dollar is seen more frequently in most currency pairs and captures about 75% of the forex trades. However, if you’re a beginner, it’s wiser to trade in significant currencies since they deliver high liquidity and are generally less volatile.

    Trading Forex With Leverage

    You explore leveraged trades as you start dealing in forex through your CFD trading or spread betting account. With your CFD account, you are required to set aside a part of your investment as a margin to open a position. It’s referred to as trading on margin. But, your market exposure would still depend on the amount invested in the absolute position. A trader must know that trading with leverage can maximize both your profits and losses.

    Expert-Improvised Forex Trading Tips

    1. Acknowledge Both Currency Markets

    If you invest or trade in a currency pair, you must gain an acknowledgment of the performance of both the currency markets. So lookout for the primary factors that impact the chosen markets as they will play a decisive role.

    1. Adhere To Your Trading Goals & Plans

    Traders make wiser decisions when they follow their trading goals or plans. It also acts as a deterrent from taking any irrational steps or reacting based on your emotions since your entries and exits are timed as per your strategy. Such a practice can assist in keeping your trades in check and free of any mishaps.

    1. Try, Assess, & Retry 

    Trading isn’t like a one-time thing; it’s a continuous process where you are required to keep on practicing. You plan, invest, analyze, and retry what worked for you. However, as we break down forex trading for beginners, we realize how most novice traders can’t understand the need to analyze each trade. While one might consider it a time-consuming process, it can contribute to improved trades and profits. Furthermore, as a forex trader, you need to study your understanding, mentality, or style when it comes to trading.

    1. Trade Smarter But Wiser

    Ensure that you adopt “cutting losses and maximizing profits” as your crucial trading goal. However, make sure that you aren’t fretting about taking a loss or acting on impulse when you notice small profits. Instead, stick with your strategy and take up risk-management practices for the ideal results.

    1. Select a Suitable Trading Platform

    When you finally make up your mind about your investment, you’ll need a trustworthy broker or trading platform that provides all the services that you’re seeking. Before opening your account with them, you can verify whether they offer customer support, commission rates, spreads, and other services.

    Learning about forex trading for beginners is an elaborate process; while this article runs through the basics, you can also turn to courses that can give you more insight. Contrarily, practicing and keeping yourself open to new learnings will help you master your future forex traders.

     

  • 4 Strategies you can use for investing in crypto

    4 Strategies you can use for investing in crypto

    Provided By Tax Software Company, Sovos

    The term “cryptocurrency” seems to be the latest craze among investors who wish to make money by investing in Bitcoin and other cryptocurrencies. Investors can find expert bits of advice which might help them to understand this dynamic world of uncertainties but would limit their possibility of making money. People perceive cryptocurrencies or specifically Bitcoins as the best possible way of achieving financial success. There is, however, much more to the crypto-world than Bitcoin, which can be learned by opting an effective cryptocurrency course. Here is a list of four strategies that can be used while investing in crypto:

    1. Rupee cost averaging: This strategy is more like the one that allows you to invest every month in mutual funds. In this type of strategy, you start to invest a portion of your investment at regular intervals for buying a fixed amount of cryptocurrency. Investors using such strategies do not consider the price or the fluctuations in their securities but just invest a dedicated amount to keep up with their investment strategy. This way they can plan for the future and save up a good amount of sum in crypto currency. This strategy is adored by most of the investors who choose to invest in crypto currency.
    2. Profit re-investing: If you are investing in cryptocurrency for too long and you have a hold on a particular currency, then according to this strategy you must start investing in other currencies as well. This way you can easily conquer the uncertainties and challenges arising at constant intervals in the market. You just must keep an eye on the situations where the graph shows parabolic curves. This strategy is a perfect fit for people who wish to make a limited number of investments.
    3. Balanced portfolio strategy: In this type of strategy, investors are advised to invest equally in all the currencies. You will be suggested to uniformly distribute your allocated amount for investment into parts and be able to compare them evenly. This strategy is a perfect fit for people who want to build a diversified portfolio and expose themselves to different kinds of cryptocurrencies. It will eventually elevate the chances of your success and get the best price as well.
    4. Unbalanced portfolio strategy: You may use the Unbalanced Portfolio Strategy while investing in cryptocurrency to benefit from the currencies you believe would perform best at that very particular moment. You will dole out a specific currency during investments in this strategy based on how well you believe each currency would compete. According to this strategy, you can invest a major amount of your investment in Bitcoin, a comparatively smaller amount on Monero and the rest of other allocations. Following that, each investment will be divided into specified proportions.

    So, if you are looking for a perfect strategy that could fit into your investment plans while considering the volatile market of cryptocurrencies, then you must consider all the aforementioned strategies before making any investments. You can also sign up for a cryptocurrency course to develop a deeper understanding of this unstable market.