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Intraday TradingIntraday TradingIntraday trading refers to the action of any gindividual who opens and closes a position inIndex Futures or Options in the same dayIndex Futures or Options in the same day.

This can be buying and selling of a CALL Optionor buying Index Futures to capitalize on apotential rise in the index value or by shortingpotential rise in the index value or by shortingIndex Futures and covering the short tocapitalize on a potential drop in the Index valuecapitalize on a potential drop in the Index valueor buying a PUT Option and selling the same.

What is a Stock Market IndexWhat is a Stock Market IndexA stock market index is a measure of the relative

l f f t k i i l tvalue of a group of stocks in numerical termsIt is computed from the prices of sector specific

l d k ( ll h d )selected stocks (typically a weighted average).As the stocks within an index change value, thegindex value changes. An index is important tomeasure the performance of investments against arele ant market inderelevant market index.It is a tool used by investors and financial managers

d ib h k d hto describe the market, and to compare the returnon specific investments.

Futures and OptionsFutures and OptionsFutures : A futures contract is an agreementb t t ti t b ll t tbetween two parties to buy or sell an asset at acertain time in the future at a certain price. All thefutures contracts are settled in cashfutures contracts are settled in cash.Options : An Option is a contract which gives theright but not an obligation to buy or sell theright, but not an obligation, to buy or sell theunderlying at a stated date and at a stated price.While a buyer of an option pays the premium andy p p y pbuys the right to exercise his option, the writer ofan option is the one who receives the option

i d h f bli d ll/b hpremium and therefore obliged to sell/buy theasset if the buyer exercises it on him.

Calls and Puts optionsCalls and Puts optionsCalls give the buyer the right but not theobligation to buy a given quantity of theunderlying asset, at a given price on or before agiven future date.Puts give the buyer the right but not thePuts give the buyer the right, but not theobligation to sell a given quantity of underlyingasset at a given price on or before a given futureasset at a given price on or before a given futuredate.All the options contracts are settled in cash.

How do I start tradingHow do I start tradingFutures / Options contracts in both index as well ast k b b ht d ld th h thstocks can be bought and sold through the

registered trading members / brokers of a stockexchangeexchange.You are required to open an account with one ofthe trading members and complete the related legalthe trading members and complete the related legalformalities.The trading member ill allot to o an niq eThe trading member will allot to you an uniqueclient identification number. To begin trading, youmust deposit cash and / or other collaterals withmust deposit cash and / or other collaterals withyour trading member as may be stipulated by him.

Futures and Options contracts expirep p

It is the last day on which the contracts expire.y p

Futures and Options contracts expire on the lastfThursday of the expiry month.

If the last Thursday is a trading holiday theIf the last Thursday is a trading holiday, thecontracts expire on the previous trading day.

Futures and Options contracts have a maximumof 3 month trading cycle the near month theof 3-month trading cycle -the near month, thenext month and the far month.

In-the-money options (ITM)In the money options (ITM)An in-the-money option is an option that wouldlead to positive cash flow to the holder if it wereexercised immediately.

A Call option is said to be in-the-money when thecurrent price stands at a level higher than the strikecu e t p ce sta ds at a e e g e t a t e st eprice. If the Spot price is much higher than thestrike price, a Call is said to be deep in-the-moneyp , p yoption.

In the case of a Put the put is in the money if theIn the case of a Put, the put is in-the-money if theSpot price is below the strike price.

At-the-money-option (ATM)At the money option (ATM)An at-the money option is an optionAn at the money option is an optionthat would lead to zero cash flow if itwere exercised immediately.

An option on the index is said to be at-the-money when the current price

l th t ik iequals the strike price.

Out-of-the-money-option (OTM)Out of the money option (OTM)An out-of- the-money Option is an option that

ld l d t ti h fl if itwould lead to negative cash flow if it wereexercised immediately.A Call option is out-of-the-money when thecurrent price stands at a level which is less thanth t ik ithe strike price.If the current price is much lower than the strikeprice the call is said to be deep out-of-the money.In case of a Put, the Put is said to be out-of-,money if current price is above the strike price.

Margins payable and Contract settlementg p y

Margins are computed and collected on-line, realti tf li b i t th li t l ltime on a portfolio basis at the client level.Trading members / Brokers collect the marginupfront from the clientupfront from the client.All the Futures and Options contracts are

l d i h d il b i d hsettled in cash on a daily basis and at theexpiry or exercise of the respective contracts

th bas the case may be.All out of the money and at the money optiony y pcontracts of the near month maturity expireworthless on the expiration date.p

Intradaygraphs.comAnalyse and Predict the Index

Electron Systems

NIFTY KPGraph

S&P CNX NIFTY - 16-05-2014 KPGraph on 16-05-2014

The rise and fall of the Index is what KP Graphs allows you to Analyse and Predict.

Major World Indices can be predicted by you. KP Graphs give you turning points forthe day and improve your trading success.

Other World Indices like NZ50, AORD, N225, TWII, SSEC, HSI, FTSE, GDAXI andDJI are available.

The rise and fall of Indexe se a d a o de• The rise and fall of the Index is what KP Graphs p

allows you to Analyse and Predict.

• Major World Indices can be predicted by you.

• Stock Market analysis based on Moon in transit• Stock Market analysis based on Moon in transit.

• KP Graphs give you turning points for the dayKP Graphs give you turning points for the day and improve your trading success.

• KP Graphs of NZ50, AORD, N225, TWII, SSEC, HSI FTSE GDAXI and DJI can be providedHSI, FTSE, GDAXI and DJI can be provided.

Intradaygraphs.com• Displays your sentiment with various Levels.

Pl h b i f l i b d KP• Planets are the basis of analysis based on KP.• Krishnamurti Paddhati of Astrology is KP.gy• Planet in a house occupies a Zodiac Sign.• It is then part of a Star in the Zodiac Sign• It is then part of a Star in the Zodiac Sign.• It occupies a Sub part of the Star.• The next division of the Sub part is sub-sub.• Further divisions lead to finer analysis.Further divisions lead to finer analysis.

Trading InstrumentsThe rise and fall of the Index is what KP Graphs allows you to predict. The products to useare Index Futures, Call Options and Put Options.

Futures are high risk products resulting in unlimited loss or gains, you can buy them if youanalyse the rise of Index else sell if index is to fall. You need to square off on a daily basis.

Options have a limited loss to the extent of the premium whereas gains are unlimitedOptions have a limited loss to the extent of the premium whereas gains are unlimited.

Call option is to be used if you have analysed that the index will be rising for the next fewdays or till a major changeover of level occurs. If the index is to rise then you are going longusing a Call option. The variation in call values are not linear with the index futures.

Put option is to be used if you have analysed that the index will be falling for the next fewdays or till a major changeover of level occurs If the index is to fall then you are going shortdays or till a major changeover of level occurs. If the index is to fall then you are going shortusing a Put option. The variation in Put values are not linear with the index futures.

Calls and Puts values derate overnight due to Time-Value loss. It is generally preferred tobuy a Call or a Put for the current value of the index and generally termed as in-the-moneyas their response to the index is faster than others.

Brokerage is a consideration along with taxes which are the fixed costs that need to beBrokerage is a consideration along with taxes which are the fixed costs that need to befactored for the minimum points the Call, Put or Index futures has to rise to make money.

Trading PhilosophyPhilosophy : The approach to money making has to have some semblance of discipline anda systematic plan to first make money equal to the amount you would have to invest inbuying a Call or Put or Index Futures The next step would be to make twice the amountbuying a Call or Put or Index Futures. The next step would be to make twice the amountthen thrice and so on.

After you have made 5 times the amount required to buy a Call or Put only then you shouldy q y y yincrease the number of Call or Puts to 2 and continue with this for some time till you gainconfidence and not be over confident to spoil all the accrued gains.

h d b f d f h b d b h llThe amount required to buy 1 contract of index future has to be earned by using the Calland Put options. The actual earnings has to be 3 times the amount required to buy 1contract.

Please note that when a Call is bought it is to be covered by selling a Call for the same strikeprice, same is true for a Put. You should never Sell a Call or Put by itself as it amounts to Callwriting or Put writing as you have not become an expert in the same.g g y p

Please do remember that our objective is to earn and keep on earning due to the index. Allother issues are not in the scope of our discussion due to lack of expertise in the saidsubject of Call or Put writing.

Trading Example for IntradayImagine that you are going Long or Short on index futures based on our KP Graphs,obviously you can only do this only after learning to read them in depth.

The investment for Nifty index futures currently is Rs 50,000 plus for one contract of 75. Ifyou are able to precisely select an entry or exit point and choose to exit after you gain 20points within one L4 period this will give you gains of Rs 1500.00. Incidentally if there are 2L4 levels in our KP Graphs then you could have 2 trades. We will ignore the other L4 leveland consider that you have earned Rs 1500.00 in a day on an investment of Rs 50,000.00plus, here we will ignore the brokerage and taxes for simplicity.

If you continue to trade for 22 more days then you will have made Rs 33,000.00 which is Rs17000.00 less than your initial input. You should continue to do this for the next 5 monthsand evaluate the success rate of making money by reading our KP Graphs.g y y g p

Let us not forget that so far we have calculated on the basis of only one trade of buy/sell orsell/buy. In all probability you would try and do more such trades in other L4 periods of thet di d L t l t f t th t ld h d i t k d l ttrading day. Let us also not forget that you could have made a mistake and lost somemoney. Trading discipline is a must else on a wrong day everything can go wrong.

Recap :pTo recap, first recover your initial input in a slow manner by trading in only one contractthen continue this for 5 to 6 months.

What NextIf your inputs have multiplied 3 to 4 times then you can consider adding one more contractfor which you should have already earned, continue 2 contracts for another 5 to 6 months.

Once you have reached a point of carelessness stop and think again about your needs first,try to reach those milestones on a regular basis and always keep your greed on the back-burner where it rightfully should stay all the time.

Daytrading can be a possible occupation after retirement as the market is 5 days a weekwith 2 holidays in a week to attend to your other needs.

You need to ascertain your financial needs, first for cost of living then other obligations andcreating a reserve fund for backup in case of emergency or if you wish to take a month longholiday. The other need could be for loan repayment or the EMI to be paid against capitalintensive investment or need for a home.

Caution :Please stay away from Call and Put Options as they seem to be attractive due to lessPlease stay away from Call and Put Options as they seem to be attractive due to lessinvestment compared to index futures but only index futures can give you directlyproportional returns.

In case you happen to use them the time required to earn sufficient amounts will be longand you will need enough patience.

Who can use this serviceDay Traders, Investors

Salaried IndividualsSalaried Individuals ProfessionalsSelf EmployedHouse wives

Retired IndividualsStudentsStudents

If you are above 18 years of age you can use this service for enhancing your income, provided you are able to

trade during market hours without ignoring your main occupation.

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