- Stock Market
- Bonds
- Mutual Funds
- Exhange Traded Fund
- Commodity Market
- Fixed Income
- Fixed Depoiste
- Recurring Deposite
Its similar way of giving loan to a company for particular time period
Short term bonds issued by the Treasury that mature in less than a year
Its a system that enables companies to sell partial ownership in themselves to people in exchange for cash
Its an basket of multiple stock where the invested amount is distributed in all stock present in ETF as per thier weightage
Instead of investing all money at one place, invest in multiple places, to achieve diversification it can be achieved from few ways:
- RealState, Stock, Index Fund, FixedDeposite
- Invest in Stock distribute the invested amount in multiple sector
- Invest in Stock as well as in internation Stock (Invest in Internation Sotck can be done by investing ADR or opening account in the country firm)
Size of the market is same, no of share get reduce to trade It happen in few ways
- Large companines buy smaller one
- Some of them going to public
- No of share is decreasing over the period of time (Ex: Buyback)
- Difficult to find good stock
Valuation is the analytical process of determining the current (or projected) worth of an asset or a company.
Valuation = ExpectedDivedend/(RequriredRateOfReturn-GrowthRate)
stock_name='Microsoft'
last_year_dividend=1.84
#In Billion
last_year_total_revenues_2017 = 96.57
current_year_total_revenues_2018 = 110.36
growth_rate = (current_year_total_revenues_2018-last_year_total_revenues_2017)/last_year_total_revenues_2017*100
expected_divdend = (growth_rate/100+1)*last_year_dividend
#18% assumption for current year
required_rate_of_return = 18
valuation=expected_divdend/((required_rate_of_return-growth_rate)/100)
print(valuation)56.522407170294606
Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its common stock. The resulting number serves as an indicator of a company's profitability. It is common for a company to report EPS that is adjusted for extraordinary items and potential share dilution.
EPS=(netIncome-annualDividend)/shares
- Common Stocks
It allow individual to enjoy the profits of the issuing company in form of dividends paid to the shareholders. Ownership voiting rights dividends
- Preference Share
A preference share enables a shareholder with a right to obtain regular dividends from a company Preference share over the common shares during payment o dividends or during liquidation of the company
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Deal with issuance of new securities
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Shares can be bought directly from the issuing company
- If company sells its share to individuals investors for the first time it is referred as IPO
Employee can acquire stock of the company as a part of the compensation or rewards program
Shares are have already bought and sold, it operate by the exchanges to insure safety and trade.
- Market News +ve or -ve
- Price Momentum in international market
- Price change in similar stocks
- Earnings of Company
Any event that brings material change to a company and affect its stakefolder
Increase no of share in market without impacting total outstanding shares, Price is adjusted such as MarketCap before and after Stock Split is same.
#Stock Split 2:1
no_of_share=100
price=50
before_market_cap=no_of_share*price
split_for_share=1
split_given_share=2
after_no_of_share=no_of_share/split_for_share*split_given_share
after_price=price/split_given_share
after_market_cap=after_no_of_share*after_price
print("before_market_cap = ", before_market_cap)
print("after_market_cap = ", after_market_cap)before_market_cap = 5000
after_market_cap = 5000.0
No of total outstanding value get decrease where price per share get increase without impacting the market cap
#Reverse Stock Split 2:1
no_of_share=100
price=50
before_market_cap=no_of_share*price
split_for_share=1
split_given_share=2
after_no_of_share=no_of_share/split_given_share*split_for_share
after_price=price*split_given_share
after_market_cap=after_no_of_share*after_price
print("before_market_cap = ", before_market_cap)
print("after_market_cap = ", after_market_cap)before_market_cap = 5000
after_market_cap = 5000.0
Company offers to buy back its shares at a premium. It possible it happen to increase value of share by decreasing the supply or eliminate threats by operators.
Issue fresh shares to distibute profits to shareholders called bonus issue effect the price. To encourage retails participation by increasing their equity base. No of share increase where price will not impact, give advantage for tax exemption
# Bonus of 2:1 (2 share for every 1 share)
no_of_share=100
price=50
before_market_cap=no_of_share*price
split_for_share=1
split_given_share=2
after_no_of_share=no_of_share+(no_of_share/split_for_share*split_given_share)
after_price=price
after_market_cap=after_no_of_share*after_price
print("before_market_cap = ", before_market_cap)
print("after_market_cap = ", after_market_cap)before_market_cap = 5000
after_market_cap = 15000.0
It is distribution of profits by the issuer to its shareholders. Percentage of dividend is define from the face value of the share Price of share is fall down once dividend is paid. Price is depend on multiple factor its possible it will not refelect in numbers.
Dividend(%) = DividendAmount/FaceValue*100
Price = priceBeforeDividend - DividendAmount
Company offeres new shares to existing shareholders. Offers of shares or convertible securities made to existing shareholder on a record date, It offer in particular ratio with reference to share held on record date
Right to buy shares in a company in the future on agreed terms.
A predator makes a bid for your share
Debt holders have the option to convert it shares
Company may pay back capital to share and/or stake holders
100 of trade in day, earn profit by effective use of spread (difference in bid and ask trade)
Identify high vloume stocks, Leverage by momentum gain/loss
Analyze charts and graph, invest based on pattern
Invest based on fundamental analysis by study balance sheet, income, Splits, acquisition based on undervalue or over valued share
Share for days earn profits by changing in price effect by sentiment, corporate action etc
Take position and close the position on same day
Stock sold and bought at market price
Trader mention limit of buy/sell the stocks, It also use to manage the risk sell >= sellLimit buy <= buyLimit
Buy and sell stock in same day, If order are not execute it will not carry over to next day
Order buy or sell at specific limit order, Order is unexecuted till the limit price come in range as per the limit specified
Order remain unexecuted till the date specified by the trader
It either execute all or non order. It an open order until full quantity satisfied
It either execute (complete or partially) or get cancelled upon being placed
Buy or sell a stock that must be executed immediately else it get cancelled.
slowly advancing funds or capital in stages rather than injecting a large lump sum right off the bat.
Invested over long period of time for long-term, Its a safest option based on multiple resarch. It also gives an advantage of time and tax exemption
Trader follow the market based on charts to decide when to buy and sell. Sell stokcs when market are high and buy when it low
Invest in Underpriced and penny stock, calculate expected price and determine under or over valued
- Modestly priced
- Mature Firms
- More Stable
- Indutries that aren't rapidly growing
- Exapmle: Railroad, Utility, Industrial equipments makers, Energy providers
Invest in growth potential. Perform fundamental anlaysis to predict who well stock do in future based on below factors
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Fast Growing
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Lower profit
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Relatively expensive
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Price drop to some specific condition
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Example: IT, etc
It follow both Growth and Value, Undervalued with growth potential
Trader focus on Highly Dividend instead of capital gain.
Operating against the current market moment.
Invest after Fundamental and Technical Analysis. Good for those can hold for long term
- C = Current Quaterly Earing per year (compare last 3 quater)
- A = Growth in annual earning (27% annual and 15%ROI)
- N = new product, services, leadership, pricing condition introduce
- S = Supply and demand
- L = Knowing Leader and laggers based on sector
- I = Instidutional support (more support will good)
- M = Market direction (bullish and bearish)
It best strategy it insure protection of capital. Holding risk stocks by holding certain stokcs. Hedger takes short position to offset the long positions
10 best performing stocks in the year with Lowest P/E raios, Highest dividend yields and potential for high growth are slected
10 worst performing socks in the year , Stocks are sure to rebound
It riskiest strategy trader borrowing money from broker.
Invest Fixed amount in share, If price down investor buy more share, average price per share goes down. If price raise new share give good benefit.
Trader decide to invest based on market mood if market is bull invest more, if its bear invest less
Trader take long-position on undervalued and short-position on overvalued. It help to diversified and commonly use in hedge.
Trader make benifit when market go up and when market go down
Trader make profit by the event happen in stocks (dividend, corporate action)
Contract between two partied to exchange a stock at a "strike" price by a predetmined date.
Buyer of the call has right but no obligation to buy the stock at strike price by the future date, while the seller of the call, has the obligation to sell the stock to the buyer at the strike price if the buyer exercises the option.
Buyer of the put has right but no obligation to sell the stock at strike price by the future date, while the seller of the put, has the obligation to buy the stock to the buyer at the strike price if the buyer exercises the option.
Trading -> Clearing -> Settlement