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Process to Claim Income Tax Refund? | ICICI Direct

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Process to Claim Income Tax Refund? | ICICI Direct

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The simplest way to claim your income tax refund is by filing a correct income tax return before the due date. Refer this article now at ICICI Direct

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Introduction:

You have been a law-abiding citizen and dutifully paid your income tax. But what do you do when you realize that the tax you have paid is higher than what was due? Is there a way to claim income tax return? Is the money adjusted against the following year's tax, or does the Income tax department pay back the money in the same year itself?

The answer is YES. You are eligible for an Income tax refund when the advance tax, self-assessment tax or the TDS amount deducted is higher than your total tax liability. And the refund is processed in the same year, except in cases where the refund amount is Rs.100 or less. In that case, it is adjusted in the following year.

ITR Refund- Three Simple Steps

If you are wondering if this process is tedious and cumbersome, be rest assured that the Income tax department has made the process of claiming your ITR refund simple and easy to handle.

You can follow the simple process listed below to file for your

Step 1: Log on to the Income Tax filing portal, https://www.incometax.gov.in/iec/foportal/

The new portal was launched in June this year, and the Income tax department has provided pre-filled forms to ease the process. Different taxpayers can access the site in various regional languages.

As per the Income Tax Act, every individual who wishes to claim the refund has to file their ITR by 31 st July each year. This year the deadline has been extended to 30 th September 2021.

You can log in using your PAN card or Aadhar card details.
Additional Read: About the new website?
Step 2: You will need to enter your income details, income from salary, income from interest and other details for the portal to calculate the refund due to you. You are also required to provide pre-validated bank details of the account for the refund. As per an earlier announcement by the Income tax department to disburse the claims electronically into the pre-validated bank accounts, this step is now a crucial one.

The refund amount is computed based on the details entered by you on the site, but please note that this may not be the final amount that will be refunded. The Income tax department will compute the final amount you get after checking and verifying the genuineness of your income tax claim amount.

Step 3: You will receive intimation from the Income tax department under Section 143 A, and the possible responses could be:

1. You have paid the correct tax amount, and no further tax is due from you

2. Your calculation does not match the tax computation of the Income tax department, and you are liable to pay more tax (tax demand) against your filing and that your refund request is partially/wholly rejected

3. Your calculation matches the Income tax department's computation, and there is indeed a refund due to you for the assessment year

Communication: In the case of e-filed returns, when there is a refund due to you, you will receive written communication by way of an email sent to your registered email address. That email will also mention the amount that is the refund for your ITR claim the year and the refund return reference number, which can be used to track your refund status.

Step 4: Tracking the status of your refund is also very simple. You need to log into the Income tax filing portal and check under 'Refunds' under the 'My Account' tab.
Additional Read: DO NOTE: In case the Income tax department wants to explore more in your case or scrutinize the matter further, they will send you a notice under some other section, and you will not receive communication under Section 143 A as mentioned above How to Check Income Tax Refund Status Online
Conclusion

It is now convenient and hassle-free to claim income tax return and can be done with utmost ease on the Income Tax e-filing portal. The entire process can be done electronically, including the money transfer. All it takes is sharing your genuine income details with the Income Tax department, and they will take care of the rest.

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.

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what is the process to claim income tax refund? - icicidirect

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What is the Process to Claim Income Tax Refund? - ICICIdirect

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You have been a law-abiding citizen and dutifully paid your income tax. But what do you do when you realize that the tax you have paid is higher than what was due? Is there a way to claim income tax return?

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How to File Your Income Tax Return in India | ICICI Direct

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How to File Your Income Tax Return in India | ICICI Direct

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Income Tax Returns are a form used to declare the net tax liability, claiming of tax deductions, and report the gross taxable income. Refer to this article to know more about filing income tax returns at ICICI Direct

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Introduction

One of America's founding fathers famously said that in this world, nothing could be said to be certain, except death and taxes. In India, too, except for agriculture income, you pay taxes on all other income beyond a particular limit. You have to pay your taxes to the government depending on income level and the applicable tax slabs. The Income Tax department offers the facility of electronically filing your Income Tax Return (ITR) to simplify this process for you.

Filing your ITR

The prerequisite for filing an ITR is to register yourself on the IT portal, i.e. www.incometax.gov.in. It is a basic OTP-based registration process that requires your details like name, residential address, mobile number, PAN, etc. It also includes a self-verification feature, after which you can get yourself a password-protected account. The process of filing IT returns can be clubbed into the following seven significant steps.

Selection of the IT form applicable to you

The first step in ITR filing is ascertaining the ITR form applicable to you for filing your return. Once that is done, you can choose to file your returns in the following modes.

Online:

Only ITR 1 and ITR 4 can be filed online. In this mode, you can simply fill in your necessary details on the IT portal itself and proceed with the rest of your ITR filing process.

Offline:

All IT forms can be filed in offline mode. This mode requires you to generate an XML file and upload it on the IT portal.

ITR Utility download from the IT portal

Follow these steps if you have opted for the offline route.

1. Go to the IT portal

2. Click on 'Downloads' located on the menu bar

3. Select the applicable assessment year (AY)

4. Download your preferred utility software - Microsoft Excel or Java, or JSON. IT department has discontinued Excel and Java utility from AY 2020-21.

Submission of your Details

In the offline route, you have to submit your income details in the form downloaded. Based on the calculations of the utility software, you can assess if you have to pay taxes or collect a tax refund. You also have to fill in IT challan details in this form. You can fill in the same set of more information on the portal itself and check your tax liability in the online route.

Validation of your Information

Once you jot details on the form, you must validate your information submitted to ensure no miss-out and all the mandatory components are entered. This step is applicable for online as well as offline modes.

Conversion of your file to XML Format

In the offline mode, the next step is converting your file to XML format by clicking on the 'Generate XML' option.

Upload of the XML file on the IT Portal

Upload this XML file onto the logged-in IT portal by first clicking on the 'e-File' option and then the 'Income Tax Return' option. The 'Submission mode' has to be stated as 'Upload XML' here. Then upload your XML file and submit it. Irrespective of whether you have opted for offline or online mode, in this step, you have to also submit required details here such as PAN, Assessment year, etc.

ITR Verification

The final step to the ITR filing process, for both - the offline and the online mode, is verifying the ITR. You can do that physically or electronically within 120 days of e-filing the ITR. If you fail to verify it within this period, your tax filing will be invalid as per the IT laws. The ITR verification can be done online or offline. The offline route requires you to send a copy of your ITR through the post. Multiple online ways need generating an e-verification code (EVC) through Aadhar OTP, Bank Account, Demat Account, and Net-Banking.

Conclusion

The ITR filing process may seem too complex to comprehend for someone who is not well-versed with taxation in general. However, this is untrue. Technology has simplified the ITR filing and verification process to a great extent, such that you need to be no tax genius to figure it out yourself. But, if you still stumble somewhere, you can always lean on a subject matter expert for guidelines and quickly complete your ITR filing process.
Additional Read: How to File Your Child's First Income Tax Additional Read: Understanding the Basics of Income Tax for Beginners Additional Read: Income Tax Rebate? What is Income Tax Rebate? Additional Read: What are the Benefits of Filing Income Tax Return on Time? Additional Read: What is Form 16? Basics Part A & Part B of Form 16
Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.

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how to file your income tax return? - icicidirect

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How to File Your Income Tax Return? - ICICIdirect

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One of America's founding fathers famously said that in this world, nothing could be said to be certain, except death and taxes. In India, too, except for agriculture income, you pay taxes on all other income beyond a particular limit. You have to pay your taxes to the government depending on income level and the applicable tax slabs.

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How To Claim Income Tax Benefit On Loans in India | ICICI Direct

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How To Claim Income Tax Benefit On Loans in India | ICICI Direct

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The advantage of taking out loans is that they help you get closer to accomplishing your objectives, save money on taxes, & qualify for certain tax benefits. Refer to this article at ICICI Direct

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INTRODUCTION:

There are general misconceptions about loans. They are considered draconian, and elders in the family would often advise against them. In our society, if someone is borrowing for any purpose, that reflects a financial strain. However, there are many advantages in the form of tax-saving benefits. They can ease the burden of the repayment. Before getting to how you can claim the tax benefit on your loan, you need to understand the type of loans that exist and the tax benefits they offer.

Broadly, there are four types of loan which can be classified as under:

TYPES OF LOANS AND THEIR TAX BENEFIT:

HOUSING LOAN:

It is a dream for every individual to buy a house. The government launched the "Housing for All by 2022" campaign under the Pradhan Mantri Awas Yojna (PMAY). You are entitled to deductions under various provisions of the Income Tax Act, such as Section 80EE and Section 80EEA.

EDUCATION LOAN:

At some point, every individual's dream is to fund their own higher education in the best of schools or colleges. There are tax benefits to an education loan that you can claim in the form of tax deductions under Section 80E.

PERSONAL LOAN:

Your tax benefit depends on the end-use of the money you borrow through this type of loan. You can use it for business expansion or refurbishment of your home. Depending on that, you can get the tax benefits and reliefs under Section 24 of the Income Tax Act.

VEHICLE LOAN:

You can benefit from this type of loan if you are self-employed and wish to purchase a car for business. The interest towards repayment of this loan can be shown as business expenses, and you can claim deductions in respect of it as per Section 80C Income Tax Act. The government in Union Budget 2019 introduced Section 80EEB wherein you, as an individual tax-payer, can claim deductions regarding this loan availed towards the purchase of an electric vehicle.

HOW TO CLAIM TAX BENEFIT ON LOAN:

Depending upon the type of loan you have availed, you can claim income tax benefits and save up towards repayment of your loan. All you need to know is the applicable provisions and the eligibility criteria while claiming tax benefit on a loan when you are filing your tax returns. You have to fill in the loan details and claim deductions in your taxable income. The following provisions applicable against the kinds of loan are:

SECTION 24: This provision allows a tax deduction for all home purchasers on the home loan interest with a limit of Rs. 2 lakhs.

SECTION 80EE, 80EEA: The benefit of tax deduction under these provisions can be claimed in the case of a housing loan, especially for a first time home purchaser. These provisions will give you additional tax benefits and can be claimed only once the limit under Section 24 is exhausted. However, Section 80EE and 80EE cannot be declared simultaneously, and you can claim only one of the two if you are a first-time home purchaser.

SECTION 80C:Under this provision, you can claim maximum tax deduction within the limit of Rs. 1.5 lakhs towards the home loan principal and if investments are made by you made in different forms.

SECTION 80E:Under this provision, you can claim tax benefit on the interest paid on the education loan, and there is no limit fixed on the amount you can claim.

CONCLUSION:

The benefit to availing of loans is that they bring you a step closer towards achieving your goals and help you save tax and get certain tax reliefs. Loans help you get tax exemptions and encourage you on your spending. However, while seeking tax benefits on any loan, you have to be prudent about the type of loan and the criteria you fall under to enjoy the benefits of tax saving.

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. Please note, loans related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents are solely for informational and educational purpose.

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how to claim income tax benefit on loans - icicidirect

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How To Claim Income Tax Benefit On Loans - ICICIdirect

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There are general misconceptions about loans. They are considered draconian, and elders in the family would often advise against them. In our society, if someone is borrowing for any purpose, that reflects a financial strain. However, there are many advantages in the form of tax-saving benefits. They can ease the burden of the repayment.

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How To Revise Your Income Tax Return | ICICI Direct

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How To Revise Your Income Tax Return | ICICI Direct

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A mistake made when filing an ITR can be corrected by filing a revised ITR. Refer to this article to know more about revising your Income Tax Return at ICICI Direct

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Introduction

You can make mistakes. As humans, we all tend to make errors or forget details even when we intend to be truly attentive, careful, and meticulous. That may happen while filing your Income Tax Return or ITR too. Like most mistakes, you can rectify them too. In case of an error, you can revise your ITR and file it again.

Understanding the Concept of Revised Income Tax Return

Many errors can happen while filing an ITR. You may claim a wrong deduction or state an incorrect bank account or forget to claim a particular deduction or miss out on stating a specific source of income. Whatever be the error, you can fix it as per the current Income Tax laws. Taxpayers have been given the provision under Section 139(5) to rectify mistakes committed by filing a revised ITR. As per this section,

If you discover an error or wrong statement in your ITR, you can refile your ITR with the correct information before the relevant assessment year ends.

You will need to mention the details of the original ITR while filing the revised ITR.

You can file a revised ITR as many times as required. There is no prescribed limit for it.

You can revise your ITR irrespective of when you have filed it - before the deadline's expiry or after the deadline's expiry.

You cannot file a revised ITR if the assessing officer completes the scrutiny assessment of your ITR under section 143(3) of the IT Act.

Also Read: Income Tax Definition & Overview

How to file a revised ITR?

The process of filing a revised ITR is similar to the original ITR filing process. It includes filing the return and verifying it. The steps to file a revised return are listed below,

1. Login to the IT portal, i.e. www.incometaxindiaefiling.gov.in.

2. Click on 'e-File' and then on 'Income Tax Return'

3. On the landing page, your PAN will be mentioned. Next, click on 'Assessment Year' and on your ITR form number. Your 'Filing Type' will be mentioned here as 'Original/Revised Return'.

4. Click on 'Submission Mode' and select 'Prepare and Submit Online' from its dropdown menu.

5. Under the 'General Information' option, click on 'Return Filing Section'. Here select 'Revised Return under Section 139(5)' from the dropdown options.

6. In the 'Return Filing Type' field, select 'Revised'.

7. Submit the mandatory details such as the 15 digits 'Acknowledgement Receipt Number' and the original ITR's 'Date of Filing'. Once you have plugged in the relevant information, you can submit the Revised Return form.

8. Once your revised ITR is filed, you must get it verified within 120 days for your filing to be valid as per the tax laws.

Conclusion:

It's alright to make mistakes as long as we rectify them and not repeat them. To avert a crisis, always keep your acknowledgement receipt of your original ITR handy for future reference. And in case you ever require an ITR revision, ensure maintaining sufficient documentation for supporting your revision, as it may be needed for audit purposes by tax authorities later.

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. Investments in securities market are subject to market risks, read all the related documents carefully before investing. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.

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You can make mistakes. As humans, we all tend to make errors or forget details even when we intend to be truly attentive, careful, and meticulous. That may happen while filing your Income Tax Return or ITR too. Like most mistakes, you can rectify them too.

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Best Tax Saving options beyond Section 80C | ICICI Direct

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Best Tax Saving options beyond Section 80C | ICICI Direct

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Section 80C is one of the most widely used tax-saving strategies. Investment possibilities are available under Section 80C for those looking to lower their tax obligations. Refer now to ICICI Direct to know more

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Any prudent taxpayer would want to ascertain avenues to optimize taxes and enhance their disposable income. The most popular avenue is the crowded limit of INR 1,50,000 under Section 80C of the Income Tax Act, 1961 (for life insurance premiums, PPF, five-year term deposits, etc.). If you have invested in NPS as well you can claim an additional INR 50,000, bringing the total available deduction to INR 200,000.

However, "Yeh Dil Always Mange More". Can I not get more tax saving options? Yes, there are other benefits to our rescue. Let us evaluate them: -

A Few more Tax Saving Options
Section 80D
The insured can get deduction of INR 25,000 on health insurance for self, spouse and children. Furthermore, you can claim for an additional amount up to INR 25,000 or INR 50,000 for your parents who are less than 60 years or senior citizens respectively. In case both the policy holder and his parents are above 60 years, the maximum allowed deduction is up to INR 1,00,000
Section 80DD
This savings is primarily for families of handicapped. It is applicable to individuals and Hindu Undivided Families (HUF's) on the amount spent on rehabilitation of handicapped dependent relatives. The deduction will be on:

-Medical expenses including nursing, training and rehabilitation of dependent handicapped relative.

- Amount paid to a specified scheme towards caretaking of dependent handicapped relative.

The specific limits are:

- Rs.75,000 for 40%-80% disability

- Rs.1,25,000 for severe disability (80% or more)

A disability certificate from the concerned medical authority will be required for claiming this deduction.

Additional Read: 7 best tax saving options available for you
Section 80DDB
A resident individual or a HUF can claim a deduction of INR 40,000 for expenses towards treatment of certain specific ailments for his dependents. In case of a senior citizen, a deduction can be claimed up to INR 100,000. Medical expenses claimed from an insurance policy or from an employer are reduced before the application of deductions. Prescription from a medical specialist is necessary.
Section 80E
You can also save tax on interest payment on higher education loans for self, spouse, children. The deduction can be claimed till either:

- 8 years from the year of beginning of loan repayment or

- Until the entire interest is paid off, whichever is earlier
Interest Component on Home Loans
Interest payments on a home loan can be reduced from your income. If the house is self-occupied, a maximum of INR 200,000 can be claimed as a deduction, provided the construction is completed within five years of the loan tenure. If you choose to let out the purchased property on rent, then the entire interest amount can be deducted from the 'Income from house property.'

For people buying a home for the first time, up to INR 50,000 is allowed on the home loan interest if the property value and loan is less than the prescribed limit and sanctioned in FY 2016-17.

First-time homebuyers can claim additional interest benefits amounting to INR 150,000 above Section 24(b) on home loan EMI's, provided the property value is less than INR 45 Lakh and the loan should be sanctioned during FY 19-20. This effectively makes way for up to INR 3.5 Lakh tax-saving other than Section 80C, including the benefit of Rs. 2 lakh under section 24(b).

However, no prior property should be registered under an applicant's name while availing benefits under Section 80 EE and 80 EEA.
Section 80G
This deduction is related to the donations paid in support of various social causes. The donations are eligible for tax deduction of up to 50% or 100% of the donated amount depending on the charitable institution. The list includes Prime Minister's National Relief Fund, National Children's Fund etc. No donation above two thousand rupees should be made in cash mode to be eligible.
Rent Deductions
Salaried employees who receive house rent allowance (HRA) as a part of salary and make rent payments can claim exemption to reduce their taxable salary. The total exemption available is the minimum of the following:

- Actual annual HRA disbursed

- 40% of basic salary for non-metro city or 50% of basic salary if the rented property is in Metro city

- Actual rent paid less than 10% of basic salary

If your company does not include the HRA component in your salary, you can claim the deduction which is lesser of:

- INR 5,000 per month

- 25% of the total annual income

- Annual rent - 10% of the annual income
Section 80 GGC
An individual can claim deduction on contributions made to a political party or electoral trust via any mode other than cash. There is no upper cap on the claim amount, but the overall deduction amount cannot exceed the gross income.
Section 80TTA
Up to INR 10,000 can be claimed on interest earned from a savings account maintained with a bank, co-operative society, or post office. Interest income from FDs, RDs or corporate bonds is not eligible.
Section 80 TTB
A deduction up to INR 50,000 can be claimed by a senior citizen on interest income from saving accounts or deposits.
Section 80U
Resident individuals who suffer from physical disabilities including blindness or mental health can claim deduction of up to INR 75,000 and those with severe disabilities can claim up to INR 125,000.
Other exemptions from salary income
Besides the all too popular HRA exemption, you can also avail tax exemption on Leave Travel Allowance, meal coupons, conveyance allowance, medical allowance, etc.

Additional Read: Understanding the Basics of Income Tax for Beginners

Conclusion:

There are several tax saving options that you can utilize basis relevance to you. Even if you exhaust the popular 80C deduction, you can still look at these other benefits.

Disclaimer - ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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tax saving options beyond section 80c - icicidirect

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Tax Saving options beyond Section 80C - ICICIdirect

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Any prudent taxpayer would want to ascertain avenues to optimize taxes and enhance their disposable income. The most popular avenue is the crowded limit of INR 1,50,000 under Section 80C of the Income Tax Act, 1961 (for life insurance premiums, PPF, five-year term deposits, etc.).

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What Are Direct and Indirect Taxes in India | ICICI Direct

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What Are Direct and Indirect Taxes in India | ICICI Direct

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Indirect taxes can be passed on to any person or organisation, whereas direct taxes cannot be passed on to another individual. Refer this article now to know more about Direct and Indirect Taxes at ICICI Direct

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Introduction:

At some point, every earning individual might have been frustrated with paying taxes or confused about how much of their income is going towards it. However, an earning individual paying tax (known as income tax) is not the only type of tax the individual has to pay. In their lifetime, they might not even be aware of the hidden taxes paid by them here and there. If you resonate with this, it is not too late to learn about the instances where you get charged for tax and the types of tax levied by the government - mainly direct and indirect tax.

What is a direct tax?

You pay Direct tax to the government. It is a type of tax that is non-transferable - which means that if you are under the liability to pay a particular sum towards tax, you cannot transfer this liability to another person. There are various categories of direct tax:

1. Income tax

Income tax is a tax many are familiar with. It is tax payable by a salaried or self-employed individual to the government. The percentage of tax owed depends on the income group the person falls under and as per the designated tax slabs fixed by the income tax department and the government.

2. Corporate tax

Corporate tax is tax paid by corporations and businesses located in India or whose income is generated from India from the profits and revenue they earn in a year.

3. Capital gains tax

Individuals pay capital gains taxes on specific investments or assets. It is split into long-term capital gains tax (LTCG) and short-term capital gains tax (STCG).

What is an indirect tax?

Indirect tax is tax paid by the end consumer to purchase or use specific goods and services. It is imposed by the central and state governments and is often hidden or included in the total price of goods and services. One entity can shift the burden of paying tax to another in indirect tax. For instance, if a shopkeeper sells a product, it is liable to pay tax to the government. But the shopkeeper generally shifts this liability on to the customer as it is the person consuming the product. Indirect tax can be tricky unless you learn how to identify the types:

1. GST

The government introduced the Goods and Services Tax (GST) in 2017. Before GST, indirect taxes were all over the place. GST clubbed several indirect tax types like excise duty, sales tax, value-added tax, and more. GST applies to almost all products and services used.

2. Stamp duty

Stamp duty is a tax charged on property sales in India and its documentation.

3. Entertainment tax

Entertainment tax is a tax charged for access to products or services related to the purpose of entertainment. These include movie theatres, parks, arcades, and the like.

What are the differences between direct and indirect tax?

Direct tax is non-transferable.

Indirect tax is transferable - usually to the end consumer.

Direct tax ensures equity as individual taxpayers pay according to their income.

Indirect tax ensures equality as tax rates are pre-decided and have to be paid by anyone who purchases the product or uses the service regardless of their earning capacity.

Direct tax involves paperwork before collection.

The indirect tax requires no paperwork and is easier to be collected.

There is more awareness about direct tax due to the designated tax slabs/ brackets.

There is less awareness about indirect tax charges as they get hidden in the total cost.

Conclusion:

Paying your taxes due to the government is a duty, and knowing how much you are liable to pay can make the process easier. Direct and indirect taxes benefit the government at first glance, but they also benefit society and maintain equality and equity wherever possible.

Disclaimer - ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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what is direct and indirect tax - icicidirect

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What is Direct and Indirect Tax - ICICIdirect

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At some point, every earning individual might have been frustrated with paying taxes or confused about how much of their income is going towards it. However, an earning individual paying tax (known as income tax) is not the only type of tax the individual has to pay.

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Know the Steps to Calculate Individual Tax Liability | ICICI Direct

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Know the Steps to Calculate Individual Tax Liability | ICICI Direct

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Your taxable income minus your tax deductions equal your gross tax liability. Refer to this article to know the Steps to Calculate Individual Tax Liability

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Tax payable is dependent on parameters like nature of income, sources, age of the taxpayer, eligible exemptions/investments.

The Income Tax Act, 1961 is a comprehensive statute that governs taxation in India. Levy of tax depends on the residential status of a taxpayer during every tax year (April - March). Indian residents must pay tax on the global income in India i.e. income earned in India and abroad. Non-residents must pay taxes only on the Indian income.

Step 1: Calculate your gross income

There are five heads of income:

Step 2: Arrive at your net taxable income

Certain tax deductions reduce your taxable income by investing/saving. Some illustrative examples are: -

Step 3: Arriving at your net taxable income and calculating your gross tax liability

By subtracting, all the eligible deductions from the gross taxable income, you get the net taxable income on which tax is payable basis your tax slab which are: -

New tax regime:

Alternatively, an individual may opt to compute tax in new tax regime. A new tax regime is beneficial for those people who do not want to use various deductions and exemptions like HRA, Standard deduction, LTA etc. An individual can choose any of the tax regimes each year as per the benefits and change it each year. The new tax regime has a lower tax rate but fewer deductions, while the old one has a higher tax rate, but more deductions are allowed.

a) For resident individual aged sixty or above but less than eighty, basic exemption limit is Rs. 300,000.

b) For resident individual aged eighty or above, basic exemption limit is Rs. 500,000.

c) Rebate from tax of up to Rs. 12,500 or 100 per cent of the tax whichever is less is available for resident individual whose total income does not exceed Rs. 500,000.

d) Tax rates will further increase by applicable Surcharge (subject to marginal relief) and Health and Education Cess ('Cess') as outlined below:
Exceptions to the Tax slab:
All income is not taxed on slab basis. Capital gains is an exception and are taxed depending on the asset you own and how long you've had it. The holding period determines if an asset is long term or short and also differs for different assets.

Step 4: Arrive at your net tax liability

If your taxable income is more than Rs.5 lakhs, add the health and education cess of 4% to your tax to see the final amount payable. High income earners will pay surcharge as under: -

*Subject to marginal relief. Surcharge is computed on tax plus cess.

Step 5: Deduct pre-paid taxes

Deduct pre-paid taxes e.g., TDS, TCS, advance tax paid for the year etc. The resulting tax payable will be rounded off and must be paid as self-assessment tax before submitting the return of income.

Example: Suppose a person earns a salary of Rs. 12 lacs and invests Rs. 1.5 lacs towards tax-saving mutual funds. We can calculate the tax liability of that person as below:

Note: The above tax liability has been calculated assuming that the individual is below the age of 60 years.
Key Learnings:

In India, tax rates are progressive and higher-income attracts higher taxes.

One can reduce their tax liability by doing permitted investments or spending as per various sections like 80 C, 80 D, etc.

If you are eligible to pay tax, ensure you pay them and file timely returns to avoid any interest/penalties and other consequences.

Note:

Please be informed that we have considered the tax rates applicable for the financial year 2021-22, but the rates and clauses may change over time. The details mentioned in this chapter is for educational purpose only. We would advise you to consult a tax advisor before making any transaction.
Disclaimer:
ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. Please note, filing of tax related services are not Exchange traded products and hence, all disputes with respect to this activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Information mentioned herein is based on the prevailing tax laws and tax laws are subject to change from time to time. Investors accessing this information do hereby agree to consult with a qualified tax advisor prior to taking any investment/ tax related decisions. Please verify the veracity of all information on your own before considering it as final tax computation. The contents herein mentioned are solely for informational and educational purpose.

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5 steps to calculate individual tax liability - icicidirect

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5 Steps to Calculate Individual Tax Liability - ICICIdirect

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Tax payable is dependent on parameters like nature of income, sources, age of the taxpayer, eligible exemptions/investments. The Income Tax Act, 1961 is a comprehensive statute that governs taxation in India. Levy of tax depends on the residential status of a taxpayer during every tax year (April - March).

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Know 5 Tax-saving Personal Finance Ideas for 2022 | ICICI Direct

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Know 5 Tax-saving Personal Finance Ideas for 2022 | ICICI Direct

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Here are some tax-saving investment suggestions for 2022 that can lower your tax bill and aid in intelligent financial planning. Read this article to learn about Tax-saving Personal Finance Ideas.

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As a taxpayer, you need to file your Income Tax Return (ITR) every year. An ITR contains the details of your annual income and the income tax you have to pay to the Government. The Government of India allows certain tax rebates and exemptions under various sections of the Income Tax Act 1961.

The objective behind this is to encourage people to invest more. There are many other ways as well through which you can significantly reduce your tax outgo.

Some Practical Tax-saving Personal Finance Ideas for 2022:

1. Invest in tax-saving instruments

As mentioned above, the Government of India allows certain tax deductions on the amounts invested in certain instruments under Section 80C of the Income Tax Act. It says that investments made in these instruments are available for tax deductions up to a maximum of Rs. 1.5 lakh.

Some of the best tax-saving avenues for investment in 2022 include:

Public Provident Fund (PPF)

Employees' Provident Fund (EPF)

Equity Linked Savings Scheme (ELSS)

National Pension System (NPS)

Sukanya Samriddhi Yojana (SSY)

Senior Citizen Savings Scheme (SCSS)

Fixed Deposits (FDs) of 5 years or more

By investing in these tax-saving instruments, you can not only save taxes but also create wealth for your long-term financial goals.

2. Opt for the appropriate tax regime

Currently, there are two tax regimes available to Indian citizens. You have the option to opt for either of them while filing your ITR. However, choosing the appropriate tax regime is crucial to ensure maximum tax savings.

While the new tax regime offers lower tax rates, it does not allow tax deductions. So, if you want to avail of tax deductions under section 80C of the Income Tax Act, you need to opt for the old regime. Otherwise, you can opt for the new tax regime to lower your income tax outgo.

You can take the help of an online income tax calculator to know whether it would be beneficial for you to opt for the old tax regime or the new one.

Additional Read: 7 best tax saving options available for you

3. Buy health insurance for yourself and your loved ones

You can even save tax by buying health insurance policies for yourself and your family. As per Section 80D of the Income Tax Act, a deduction of up to Rs. 25,000 is available for the taxpayers for paying health insurance premiums for themselves, their spouses and dependent children.

Additionally, if a taxpayer is a senior citizen, they can avail a tax deduction of up to Rs. 50,000 under this section. Also, you can save additionally up to Rs. 50,000 if you pay for your parents' health insurance.

4. Don't forget to avail of tax benefits on home loan

Suppose you avail of a home loan from any recognized bank or non-banking financial institution. In that case, you can claim deductions from your taxable income against your loan's interest and a principal component. Under this rule, the maximum deduction allowed is Rs. 2 lakhs under section 24 against the home loan interest and Rs. 1.5 lakhs under section 80C of the Income Tax Act against the home loan principal.

5. File your income tax return within specified timelines

You must file your ITR before 31 st July every year or the date communicated by the income tax department. Failing to file your ITR within the due date can attract needless penalties from the income tax department.

It helps to file your ITR on time as it is also essential for various other purposes, such as availing of housing loans, applying for immigration documents, conducting high-value transactions, etc.

Additional Read: ELSS vs PPF: Which is the better tax saving option?

The final words

Many taxpayers make frantic investments in tax-saving instruments during the end of the financial year to save taxes. However, this defeats the primary purpose of allowing such deductions to encourage people to invest for their future.

That is why the best time to make tax-saving investments is during the beginning of every calendar year or financial year. You can also invest regularly in various tax-saving avenues to save taxes and create wealth. However, you need to make sure that you understand all tax-saving investment options correctly and invest only in the right ones.

Disclaimer - ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. I-Sec acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and I-Sec is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein mentioned are solely for informational and educational purpose.

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5 tax-saving personal finance ideas for 2022 - icicidirect

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5 Tax-saving Personal Finance Ideas for 2022 - ICICIdirect

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As a taxpayer, you need to file your Income Tax Return (ITR) every year. An ITR contains the details of your annual income and the income tax you have to pay to the Government. The Government of India allows certain tax rebates and exemptions under various sections of the Income Tax Act 1961.

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Equity Capital Gains Taxation & Tax Loss Harvesting in Stock Markets in India | ICICI Direct

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Equity Capital Gains Taxation & Tax Loss Harvesting in Stock Markets in India | ICICI Direct

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In tax-loss harvesting, you sell your stocks/fund units at a loss to reduce your tax liability on capital gains. Know more about Equity Capital Gains Taxation & Tax Loss Harvesting in Stock Markets at ICICI Direct

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What do you mean by capital gains and what is the meaning of long term and short term capital gain?

Capital gains means, any gain arising on the sale of capital assets such as real estate, equity or equity oriented products. Here we will discuss about the long term capital gain arising on sale of equity and equity oriented funds. Now, investment in shares or equity oriented mutual funds can be done for a short term or long term. Short term means investing for a period of upto 12 months and long term means investing for a period of more than 12 months.

Suppose if you bought a share on Jan 1, 2017 at Rs 100 and sold on Dec 1, 2017 at Rs.130. This Rs. 30 gain will be short term capital gain. Now if suppose you sell the shares on Jan 15, 2018, then this will be treated as long term capital gain.

What are short term and long term capital gain tax?

Short Term Capital Gain Tax- Any profit or gain arising from stock investment is less than 12 months termed as short-term Capital gains. Short term capital gain tax is taxed at flat rate of 15%.

Long term Capital Gain Tax- Any profit or gain arising from stock investment is considered long term capital gains, if the holding period is more than 1year. Long term capital gains up to Rs 10000 from investment in a financial year is exempted from tax. Any gain above RS 100000 is taxed at 10%. Until FY 2017-18, a LTCG tax on sale of stocks was zero. In the Union budget of FY2018-19, a grandfather clause was introduced. According to this clause, all the stocks sold after February 1, 2018 the acquisition cost for the computation of capital gains would be considered as higher than the actual purchase price or the highest price quoted on stock exchange as on January 2018

Can you explain by example?
Short term capital gain tax
Mr A bought 100 shares of Larsen & Toubro ltd at Rs 950 per share on 8 th June2020 and sold the same 100 shares of Larsen & Toubro at Rs 1500 per share on 15 th February 2021 within 1year (less than 12 months).

LARSEN AND TUBRO (INE018A01030), HOLDING PERIOD = 8 MONTHS 6 DAYS
Gain on Larsen & Toubro is Rs. 55,000/-.
Short term capital gain tax = 55000 X15% = 8250.
Long term capital gain tax
Mr P bought 200 shares of Titan Ltd. At Rs 820 per share on 27 th November 2017 and sold the same 200 shares of Titan at Rs 1700 per share on 1 st July 2021

TITAN (INE280A01028), HOLDING PERIOD= 3 YEARS 8 MONTHS

Long Term Capital Gain = 176000 (Up to Rs 100000 is not taxed as per the provision)

Long term capital Gain Tax= (176000-100000) = 76000 X 10% = 7600

How are losses treated & can it set off against future profit?

Any Unadjusted losses can be carried forward up to 8 years. However, if there is any capital loss, then file it before due date to carry forward the loss and then set off from the capital gains arising in future. Short term capital loss can be carried forward up to 8 years and can be set off against short term capital gain and long-term capital gain before taxation. Long term capital loss can be carried forward for up to 8 years and can be set off against long term capital gains only before taxation.

What are taxation on equity intraday transactions?

Intraday-day trading (speculative business income)- If the shares are bought and sold regularly in a short duration then this is not considered to be under capital gains but under speculative business income as per income tax section 43(5). The gain from this type of income is taxed under business income and is taxed as per the assesses tax slab rate.

How is dividend income taxed and filled?

As per Finance Act 2020 shareholders will have to pay the tax on dividend income as per their tax slabs at and additional TDS would be charged at 10% if the dividend from any company received exceeds Rs 5000.

You need to visit Income Tax website to file your tax.

What are types of ITR forms and where to file Equity Income Tax?

ITR-3 for Individuals and HUFs having income from profits and gains of business or Profession

ITR-4 for Individuals, HUFs and Firms (other than LLP) who are eligible to opt for "Presumptive taxation scheme"

Where can client see profit and loss statement in ICICI direct?
LOGIN TO ICICIDIRECT ACCOUNT > PROFOLIO> Capital Gain (Equity section)> View Caital Gain
Choose the right period and then click on view details and there on download at the top right to get the file in .als or .csv format, and Save the same to get the file.

What is concept of Grandfathering? Can you explain with an example that how long term capital gains will be calculated on sale of shares? What will be the cost of acquisition?

Long term Capital Gain= Sale value - Cost of acquisition

Sale value means the consideration received on the sale of equity share.

The concept of Grandfathering means that any gain calculated upto 31 st Jan 2018 i.e. taking the highest price of the stock as on Jan 31, 2018, will not be chargeable to tax. This price as on Jan 31, 2018 is the fair market value as on Jan 31, 2018.

Gains on stock after Jan 31, 2018, will be chargeable to tax of 10% provided the shares are sold on or after April 1, 2018. Please note, If the shares are sold on or upto March 31, 2018, any long term capital gain will be exempt from tax.

Now, there are scenarios to determine the cost of acquisition.

Scenario 1: First check if the Sale value is higher than the fair value as on Jan 31, 2018. If yes, then the higher of fair market value as on Jan 31, 2018 and actual cost of acquisition will be treated as the Cost of acquisition.

Let's assume:

Shares acquired- 1st of January, 2017

Actual Acquisition Price =Rs. 100,

Fair market value as on Jan 31, 2018= Rs. 200 (This is the highest trading price as on Jan 31, 2018)

Sale value on 1st of April, 2018 = Rs. 250.

Here, since the sale value as on 1 st April 2018 is higher than the FMV as on 31 st Jan, the cost of acquisition will be higher of 200 and 100, which comes to Rs.200.

In this case, the LTCG will be 250-200= Rs.50

Scenario 2: If the Sale value is lower than the fair value as on Jan 31, 2018. If yes, then cost of acquisition will be the higher of sale value and actual cost of acquisition.

Let's assume:

Shares acquired- 1st of January, 2017

Actual Acquisition Price =Rs. 100

Fair market value as on Jan 31, 2018= Rs. 200

Sale value on 1st of April, 2018 = Rs. 150.

Here, since the sale value as on 1 st April 2018 is lower than the Fair market value as on 31 st Jan, the cost of acquisition will be higher of sale value and actual cost of acquisition i.e. higher of 150 and 100, which is Rs.150 will be considered as the cost of acquisition

In this case, the LTCG will be 150-150= Rs.0
Scenario 3:
Let's take another example in which, sale value is less than the actual cost of acquisition.

Shares acquired- 1st of January, 2017

Actual Acquisition Price =Rs. 100

Fair market value as on Jan 31, 2018= Rs. 200

Sale value on 1st of April, 2018 = Rs. 80.

In this case, the sale value is also lower than the fair market value as on Jan 31, 2018. Hence the cost of acquisition will be higher of actual cost of acquisition and the sale value, i.e. Rs 100 and Rs.80. Hence cost of acquisition will be Rs.100.

So there will be long term capital loss of Rs. 20 (Rs.80 minus Rs.100)
Will cost of acquisition be indexed for calculating Long term capital gains?
No, benefit of indexation of the cost of acquisition will be applicable for calculating long term capital gains tax.
What is Tax Loss Harvesting-
Tax-loss harvesting is the practice of selling a share that is incurring a loss, so that by realizing the loss, you can offset the same against realized gain for the same year and save on taxes. The security has to move out of the demat account by delivery sell transaction and the sold security is replaced by the same or a similar security.
When can client needs to take action for tax loss harvesting?
Client would need to make these transactions before March 31, 2022 to harvest losses for Financial Year 2021-22.
Where client can check unrealized capital gain in ICICIdirect ?
Client can check unrealized capital gain by logging in to ICICIdirect account and visiting the "Equity" section under "Portfolio".

Examples for Tax Loss Harvesting:-
1) Short Term Capital Gain

Assume that you have made a Short Term Capital Gain (STCG) of ₹1,00,000 this year. Client would have a 15% tax liability i.e. ₹15,000 on the same. Also assume that client is currently holding some stocks where client has a unrealized loss of ₹80,000. Client can sell these stocks and set off the loss of ₹80,000 against STCG of ₹1,00,000. Hence, client would only need to pay 15% tax on ₹20,000 which is ₹3,000, thereby saving ₹12,000

Once this Tax harvesting activity is completed, you can again buy the same stock or a similar scrip, maintaining optimal asset allocation and expected returns.

2) Long Term Capital Gain

Assume that client has made a Long Term Capital Gain (LTCG) of ₹3,00,000 this year. You would need to pay 10% tax on the (₹3,00,000 - ₹1,00,000*) = ₹2,00,000 i.e. ₹20,000. Also assume that client is currently holding some stocks where for more than 1 year and you have an unrealized loss of ₹1,50,000. Client can sell these stocks and set of the loss of ₹1,50,000 against LTCG of ₹2,00,000. Hence, client would only need to pay 10% tax on ₹50,000 which is ₹5,000, thereby saving ₹15,000

*First & ₹1,00,000 made in LTCG would be tax free and any gain above that would be taxed at & 10%.

While setting off losses in tax harvesting, you need to keep following points in mind

1. Long term capital losses can be set off only against long term capital gain.

2. Short term capital losses can be set off against short term capital gains or long term capital gains.
Note:
1) The tax liability explained here is a guideline, we suggest you to consult your tax advisor to understand the exact tax liabilities.

2) Please note that the amount given in the above examples are hypothetical and have no relevance to your portfolio. You may calculate the amount of STCG/ LTCG based on your portfolio.

Disclaimer - ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code:-07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Nothing in this advt. constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. You may consult your own tax advisor.

The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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equity capital gains taxation and tax loss harvesting in stock markets - icicidirect

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Equity Capital Gains Taxation and Tax Loss Harvesting in Stock Markets - ICICIdirect

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Capital gains means, any gain arising on the sale of capital assets such as real estate, equity or equity oriented products. Here we will discuss about the long term capital gain arising on sale of equity and equity oriented funds. Now, investment in shares or equity oriented mutual funds can be done for a short term or long term.

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Six New Tax Rules That Are Effective 1st April 2022 in India | ICICI Direct

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Six New Tax Rules That Are Effective 1st April 2022 in India | ICICI Direct

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Check out the six new income tax rules that will impact your finances, effective from 1st April 2022. Refer this article to know more about the new rules.

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Introduction

Every year, there are additions or deletions to taxation rules in India. These are announced in the Budget report that is presented in February. This year, there have been some interesting financial changes that will impact individuals. Some of these are welcome changes, while others may increase your tax burden. Nevertheless, staying on top of the new income tax rules will help you with tax planning and ensure you file your income tax returns correctly.

Here are the top changes to taxation rules that will impact you starting April 1st, 2022:
1. Taxation on Interest Earned on EPF Accounts
The new income tax rules have introduced a taxation component for interest earned on Employee Provident Funds. If an employee contributes Rs. 2,50,000, any interest earned on the excess contribution will be taxable. The taxation threshold has been set at Rs 5,00,000 for individuals who don't receive a contribution from employers, such as government employees. A separate account for the additional interest earned will be created to make taxation easier.
2. Tax on Cryptocurrencies and Virtual Digital Assets
In a move that sort of taxation on cryptocurrencies and virtual digital assets (VDA) in India, the government has announced a flat 30% tax on gains from cryptocurrencies and other VDA. The government has also made it clear that no deductions will be allowed on transactions made for virtual digital assets, and the losses from one VDA cannot be set off against gains from other VDAs.
3. Updated Income Tax Returns Filing Extended
As a taxpayer, you can now file revised or updated income tax returns within two years from the end of the assessment year. This will give you more time to correct any errors or disclose additional income that you did not in the initial filing. However, taxpayers need to pay an additional tax of 25% to 50% on the tax and interest due on the additional income.
4. NPS Deduction for State Government Employees
Suppose you are an employee of any State government. In that case, you will be able to claim a deduction under Section 80CCD(2) for NPS contributions made by your employer up to 14% of your basic salary and dearness allowance. Earlier, this deduction was 10%.
5. Tax Exemption on Covid-related Financial Assistance
If you have received money for Covid treatment from an employer or got money up to Rs. 10,00,000 on the death of a family member due to Covid, this amount will not be considered income, therefore becoming exempt from taxation.
6. Tax Relief for Insurance Bought for Disabled Persons
Under the provisions of Section 80DD, parents or guardians of a disabled person can now claim a tax deduction on a life insurance policy purchased for a disabled person, even if the payout starts while they are alive.

Conclusion

These are some of the significant income tax rules that will impact you from April 1st, 2022. Staying abreast of the latest financial changes can help you improve your tax planning and ensure you don't miss out on any key declarations while filing your income tax returns.

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. Please note, IPO related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. ICICI Securities is also a BRLM to the issue. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing.

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six new tax rules that are effective 1st april 2022 - icicidirect

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Six New Tax Rules That Are Effective 1st April 2022 - ICICIdirect

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Every year, there are additions or deletions to taxation rules in India. These are announced in the Budget report that is presented in February. This year, there have been some interesting financial changes that will impact individuals. Some of these are welcome changes, while others may increase your tax burden.

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Know the Important Documents for Applying Car Loan | ICICI Direct

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Know the Important Documents for Applying Car Loan | ICICI Direct

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Applying for a car loan is more accessible as it requires less documentation than other loans. Refer to this article at ICICI Direct to know the Important Documents that are necessary for applying for Car Loan

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Important Documents for Applying Car Loan - ICICIdirect

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Owning a car may have been a luxury in the past. Still, with the steady economic development of the nation, gradual expansion of the city premises, and increasing demand for mobility, cars have emerged as a necessity. And easy availability of car loans has significantly improved the affordability of owning cars.

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Factors to consider while taking bike loan | ICICI Direct

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Factors to consider while taking bike loan | ICICI Direct

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Are you looking for the best bike loan? Here are things to consider while choosing the best bike loan to buy your dream bike. Refer this article to know about the factors to consider while taking bike loan at ICICI Direct

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Introduction

A bike or two-wheeler loan can be a prudent option to finance your dream bike. It may help you own your dream bike without worrying about the cost of the two-wheeler, as it allows you to repay the entire loan amount in equated monthly instalments (EMI) spanning over one or two or three years. But when applying for a bike loan, you need to consider several parameters, based on which you can choose the best-fitted two-wheeler loan for yourself.
Additional Read: Simple Tips to Get Your Two-Wheeler Loan Application
Here are a few things to consider when applying for a bike or two-wheeler loan:

Know your credit score

Credit scores today play a crucial role when applying for any loan. In India, bike or two-wheeler loans are generally unsecured loans. Hence, credit score has become critical in these types of loans as it indicates your creditworthiness. Measured on a scale of 900, 720 and above is a good credit score that can get you a quick and easy loan approval along with the opportunity to negotiate a better deal in terms of the interest rate. However, an unfavourable credit score may attract further scrutiny and higher interest rates and lead to loan rejection.

Check your eligibility

It is due diligence to estimate the eligibility for the loan. There are several free online tools to help you with that. By filling up some simple details such as age, whether salaried or self-employed, monthly income scale, type of residence, and so on, you can have a relative understanding of your eligibility in terms of total loan amount and the monthly EMI amounts. This knowledge can help you choose the best bike loan fitting your requirement. It would also help you avoid over-borrowing.

Understand the type of interest being charged
Additional Read: Can Students Apply for Two Wheeler Loans in India?
Generally, in India, the interest rate in retail loans can be broadly classified into two categories: fixed and floating rates of interest. In the floating rate of interest, the interest rate moves up and down based on other external factors such as the number of repayments done to date, prevailing market rate, and credit score, among others.

In a fixed rate of interest, the borrower and lender agree on a rate of interest when signing the loan documents. The interest rate remains the same through the tenure of the loan.

Know the tenure of your loan

When availing of the best bike loan, you should critically consider the repayment period. Generally, in India, bike or two-wheeler loans have a repayment period of 12 to 60 months. Depending on the loan tenure, the equated monthly instalment (EMI) amounts would vary. A higher repayment period means lower EMI, whereas a shorter repayment period means the opposite. But higher tenure also means you pay a higher interest, and on the contrary, lower tenure means you pay lower interest on the loan.

Have a well-throughout repayment plan

When availing of a bike loan, have a sound repayment plan. Before signing the loan document, discuss your repayment plan with the lender and discuss the different options available at your disposal in the event of any difficulty during the loan period.

Conclusion

Though a bike loan will ensure you finally own your dream bike, you should choose wisely after considering various parameters. Preferably you should opt for bike loans that will provide you with a flexible repayment option along with a grace period.

Disclaimer- ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. ICICI Securities Ltd. acts as a referral agent to ICICI Bank Ltd., ICICI Home Finance Company Limited various other Banks / NBFC for personal finance & housing related services & the loan facility is subjective to fulfilment of eligibility criteria, terms and conditions etc. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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things to consider while taking bike loan - icicidirect

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Things to consider while taking bike loan - ICICIdirect

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A bike or two-wheeler loan can be a prudent option to finance your dream bike. It may help you own your dream bike without worrying about the cost of the two-wheeler, as it allows you to repay the entire loan amount in equated monthly instalments (EMI) spanning over one or two or three years.

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How to Improve Your Finances with Technology | ICICI Direct

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How to Improve Your Finances with Technology | ICICI Direct

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Technology has made it possible to automate a variety of chores, including paying utilities and making investments. Visit now at ICICI Direct to learn how to Improve Finances with Technology.

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How to Use Technology to Improve Your Finances - ICICIdirect

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Technology is an integral part of our life. From booking a cab to ordering food, everything can be done at a mouse click. It has transformed the sector of personal finance giving it edge and a lot of advantages. It made paying bill easy and allowed us to monitor our savings, make investment plans, and apply for loans.

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How to Calculate Your Retirement Corpus Online? | ICICI Direct

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How to Calculate Your Retirement Corpus Online? | ICICI Direct

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So if you haven't yet started your retirement planning, estimate your current expenses. Refer to this article to know on how to calculate Retirement Corpus Online at ICICI Direct

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How to Calculate Your Retirement Corpus? - ICICIdirect

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A key element of financial planning is considering your retirement stage. As soon as you finish your working years, you should outline how you will cope with the time when you do not have a regular income. You will need to create a source of income for yourself.

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Know about Zero Coupon Bond? | ICICI Direct

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Know about Zero Coupon Bond? | ICICI Direct

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A zero-coupon bond is a bond that trades at a discount to its face value and does not pay interest. Refer this article at ICICI Direct to know more about Zero Coupon Bond

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Introduction

Fixed income instruments are attractive investments for those who want stable returns. Bonds are popular fixed income instruments issued by governments and corporations. Zero-coupon bond is a type of bond that governments and companies issue.

Zero-coupon bonds, unlike other bonds, do not give investors a regular interest pay-out. Instead, they are issued at a steep discount to the bond's face value at the time of issuance. That is why they are also called discount bonds. At maturity, the investor receives the entire face value. The difference between the invested amount and the face value is your return as an investor.

Additional Read: Stocks v/s Bonds - A quick guide

Pricing of a Zero Coupon Bond

The formula used to calculate the price of zero-coupon bonds is:

Price = Face Value/ (1+r)^n

Where r is the annual return, and n is the number of years until maturity.

Why invest in a Zero Coupon Bond

1. Returns are predictable

The most significant advantage of a zero-coupon bond is that the returns that you receive on them are known in advance. You buy the bond at a discount on the face value, and you know the maturity amount you will getat redemption. However, yield could vary if you sold the bond in the open market before maturity.

2. There is no reinvestment risk

Reinvestment risk refers to the financial risk of reinvesting pay-out, like periodic interest amount, you get on an investment. There is a possibility that the rate of return may be lower at the time of pay-out and you invest that amount at a lower interest rate. Since zero-coupon bonds do not offer regular returns, reinvestment risk is eliminated.

3. Can help meet financial goals

Since the maturity amount and returns are known, zero-coupon or discount bonds are ideal for short-term to long-term investment goals if you have a low-risk appetite. You can plan for investments goals with these bonds as you know the exact amount you will get on maturity.

4. Easy liquidity

Zero-coupon bonds are traded in the secondary market. If you don't want to hold the bond to maturity, you can sell it before maturity on the stock exchange.
Additional Read: Should you consider investment in a Zero Coupon Bond What are the benefits of investing in Bonds?
If you are looking to make a lump sum investment and want a maturity amount in lump sum too, you could consider investing in a zero-coupon bond. Also, if you want to avoid market ups and downs, zero-coupon bonds are suitable investments to consider because you are assured of a return. They can also be ideal for portfolio diversification. However, if you are looking for regular income from your investment, zero-coupon bonds are not your investment.

Additional Read: Lumpsum vs SIP: Know the advantages

Conclusion

Zero-coupon or discount bonds are fixed-income instruments that give you a lump sum amount on maturity. Investors who have a defined investment goal will find it a valuable product to invest in.

Disclaimer:- ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Composite Corporate Agent License No.CA0113, AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. We act as a Syndicate, Sub -syndicate member for IPO, FPO. Please note that Mutual Fund Investments are subject to market risks, read the scheme related documents carefully before investing for full understanding and detail. . ICICI Securities Ltd. acts as a referral agent to ICICI Bank Ltd., ICICI Home Finance Company Limited and various other banks / NBFC for personal finance, housing related services etc. & the loan facility is subjective to fulfilment of eligibility criteria, terms and conditions etc. NPS is a defined contribution plan and the benefits would depend upon the amounts of contributions invested and the investment growth up to the point of exit from NPS. Insurance is the subject matter of solicitation. ICICI Securities Ltd. does not underwrite the risk or act as an insurer. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.
The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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what is a zero coupon bond? - icicidirect

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What is a Zero Coupon Bond? - ICICIdirect

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Fixed income instruments are attractive investments for those who want stable returns. Bonds are popular fixed income instruments issued by governments and corporations. Zero-coupon bond is a type of bond that governments and companies issue. Zero-coupon bonds, unlike other bonds, do not give investors a regular interest pay-out.

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Impact of interest rate hike on Home Loans in India | ICICI Direct

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Impact of interest rate hike on Home Loans in India | ICICI Direct

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The Reserve Bank of India (RBI) increased the interest rates on housing loans. Retail interest rates will be affected by this. Refer to this article to know more about the Impact of an interest rate hikes on Home Loans in India

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Introduction

Rajeev had taken a home loan of Rs. 50,00,000 last year to finance his dream house. The Equated Monthly Instalment (EMI) on the loan was within his budget at the time of application. However, since last month, his EMI shot up.

This is the plight of many home loan takers in India right now because the Reserve Bank of India has hiked its repo rate for the first time in almost four years. Let us understand what is repo rate and why does it affect your home loan interest rate?

Understanding repo rate

Repo rate is the interest rate at which the RBI lends to commercial banks in the country. It is a tool that the RBI uses to control inflation.

Since the beginning of the year, inflation in India has gone up significantly. In April 2022, India's Consumer Price Index, an indicator of retail inflation, went up to 7.79%. The RBI declared a 40-basis point increase in repo rate to manage inflation. The word on the street is that the RBI will further increase repo rate over the year to control inflation.

What happens when repo rate increases?

When the RBI hikes repo rate, borrowing becomes expensive for commercial banks. These banks, in turn, pass on this burden to their customers by increasing the interest rate on products, such as home loans and car loans.

In this situation, not only new loans become dearer, the rates of the existing loan can also go up if you have taken a floating interest rate loan. In India, most home loans are pegged to the one-year MCLR (Marginal Cost of Funds based Lending Rate) or repo rate. MCLR is the minimum rate set by banks at which they can lend to customers. When the repo rate goes up, so does the MCLR. This has a direct impact on your EMIs as the lending rate will increase for both MCLR and repo based loans

Take a look at this table to understand the impact of rising interest rates on your home loan:

How to manage an increase in home loan EMI?

If you are unable to meet the increased EMI requirement on your home loan because of the interest rate hike, here are a few things you can do:

1. You can request your home loan provider to extend the tenure of your loan so that your EMI remains unchanged. With a longer tenure, your total interest outgo will increase because the interest component will rise. However, it will not increase your EMI burden.

2. If you have surplus funds, you can consider prepaying a part of your home loan. This will reduce the total principal amount, thereby reducing your EMI or tenure.

3. You could also consider refinancing your loan at a lower interest rate. If your credit score has improved, there is a possibility that lenders may lend you money at a lower interest rate.
Additional read: 6 Tips to enhance your home loan eligibility
In summary

An increase in RBI repo rates will definitely lead to a hike in home loan interest rates. If you plan to take a new home loan or have an existing home loan at a floating rate of interest, you can expect your EMI to rise. It would be best to plan your finances accordingly to meet the higher EMI requirement.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. AMFI Regn. No.: ARN-0845. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. Please note that Mutual Fund Investments are subject to market risks, read the scheme related documents carefully before investing for full understanding and detail. ICICI Securities Ltd. acts as a referral agent to ICICI Bank Ltd., ICICI Home Finance Company Limited and various other banks / NBFC for personal finance, housing related services etc. & the loan facility is subjective to fulfilment of eligibility criteria, terms and conditions etc. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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impact of interest rate hike on home loans - icicidirect

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Impact of interest rate hike on Home Loans - ICICIdirect

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Rajeev had taken a home loan of Rs. 50,00,000 last year to finance his dream house. The Equated Monthly Instalment (EMI) on the loan was within his budget at the time of application. However, since last month, his EMI shot up.

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Choosing between stock market & fixed deposit investments in India | ICICI Direct

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Choosing between stock market & fixed deposit investments in India | ICICI Direct

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Stocks are market-linked investments that can provide returns that outperform inflation in a developing nation. A fixed-income product known as a fixed deposit ensures returns over a predetermined tenor. Refer this article at ICICI Direct

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Introduction

To lead a life free of financial worries, you need to make right investments that may help you fulfil all your financial goals. From your investment objectives to risk appetite and return expectations, many aspects influence the decision to choose an investment instrument.

People often find themselves in the conundrum of choosing between a fixed deposit and investing in shares in the stock market. First, you need to note that these two investment instruments are radically different. While one is an equity investment involving considerable risk, the other is a fixed income instrument with lower risk and assured return.
Additional read: Equity Trading: Here's everything you must know
The choice between fixed deposit and share market investment depends on your expectations from your investments. Before you take a call to pick the right investment instrument for you, understand the difference between the two:
Additional read: Types Of Stock Trading In The Market
Clearly, there are marked differences between the two products. While equities are high-risk instruments that have the potential to give high returns in the long term, fixed deposits are low-risk investments that provide assured returns.

Should you invest in the stock market or fixed deposits?

Deciding whether you want to invest in shares in the stock market or fixed deposits should involve the following considerations:

1. Investment objective

Start by evaluating your investment objective. If you have a financial goal in the near term, then the stability and security of fixed deposits will help. However, if your goal is to generate wealth in the long term, save for retirement that is 10-20 years away, or build a trust fund for your child, you could consider putting that money in the share market because it will give you higher income returns.

2. Risk appetite

When choosing between equity and fixed deposit investments, you must do an honest analysis of your risk appetite. If you are a low-risk person who wants stable and assured returns, you could consider investing in fixed deposits. If you have a higher risk appetite and are willing to stake some money for the possibility of higher returns, then you could put your money in shares or equity oriented mutual funds.

3. Investment horizon

It may be better to park your money in fixed deposits for short-term investments. Extreme volatility in the stock market may give negative returns in the short term. If you have a long-term investment horizon, shares can help you make better returns. This is because, despite volatility, the stock market usually evens out in the long run.

In summary

The decision to put your money in the stock market or fixed deposits entirely depends on your financial goals, risk appetite, and investment horizon. As a rule of thumb, it would be ideal if you could diversify your money between both instruments to get the best of both worlds for the short term and the long term.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Composite Corporate Agent License No.CA0113, AMFI Regn. No.: ARN-0845. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. Please note that Mutual Fund Investments are subject to market risks, read the scheme related documents carefully before investing for full understanding and detail. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is merely acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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choosing between stock market and fixed deposit investments - icicidirect

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Choosing between stock market and fixed deposit investments - ICICIdirect

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To lead a life free of financial worries, you need to make right investments that may help you fulfil all your financial goals. From your investment objectives to risk appetite and return expectations, many aspects influence the decision to choose an investment instrument.

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Is Investing in Gold Still Profitable in India? | ICICI Direct

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Is Investing in Gold Still Profitable in India? | ICICI Direct

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Gold as an investment offers dual benefits of risk-reduction and wealth creation. Refer to this article at ICICI Direct to know more about Investing in Gold today

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Introduction

Every gold coin has two sides: buying gold can be profitable, but it can also be a losing proposition. The truth is always somewhere in the middle. Gold's profitability and inclusion in your investment portfolio depend on various elements, such as your investment objectives, time horizon, and, ultimately, your investment strategy.

To ask whether a specific asset is a good investment or not is normal and even prudent for an investor. This argument makes sense, especially for gold, which is an inert metal, that doesn't pay interest.

There are many ways through which an investor can invest in gold. Purchasing a physical product, such as gold coins or bricks or even jewellery, Exchange-traded funds (ETFs), and purchasing shares in gold mines and related businesses are some options. You can buy the metal for various reasons, and there are numerous ways to do it.

In recent times, there is also the option to buy gold virtually or invest in sovereign gold bonds issued by the Reserve Bank of India.

The Modern Economy and Gold

Even though gold is no longer used to support the world's currencies, it still has value in today's culture. It remains crucial to the world economy. To prove this claim, one only needs to look at the financial statements of central banks and various financial organisations, including the International Monetary Fund. These organisations manage almost one-fifth of all the gold discovered above ground. In addition, several central banks have increased their current gold holdings, which reflects worries about the long-term health of the global economy.

Different Methods of Owning Gold

One of the most significant variations between considering gold investments today and several generations ago is the sheer number of investment possibilities. Today, you can invest in:

Gold Coins

Gold Bullion or Jewellery

Gold Futures

Gold ETFs

Gold Companies

Gold Mutual Funds

Sovereign Gold Bonds

Reasons To Invest In Gold

Gold has consistently proven to be a powerful inflation hedge. Gold prices are essentially unaffected by inflation, so you won't lose money when inflation occurs, even if the worth of all currencies declines on the international market.

One of the main justifications for making any financial investment is to have a backup plan in case you ever need it, and gold is one of the most liquid hard assets. You only need to sell your gold to the buyer of your choice if you find yourself in an emergency.

Have you ever attempted to make a real estate investment or any other financial investment? If so, you should know that purchasing gold is far simpler than purchasing real estate or other tangible assets. People looking to start investing might feel safe because buying gold carries minimal risk.

Gold has a unique position in Indian households and stands as a symbol of family wealth. For instance, gold jewellery is passed down from one generation to the next as a legacy.

Taxes on Investments in Gold

Let's quickly discuss the taxes that are payable on gold assets under the Income Tax Act. On investments over Rs. 30 lakhs, a wealth tax of 1% of the entire investment is payable. The capital gains tax rate for physical gold and gold ETF is 20%.

An Unfavourable Period to Invest in Gold?

To determine the value of gold, let's compare its performance in S&P 500 during the previous year (as of March 2022). The S&P 500 generated total returns of roughly 10.4% compared to gold's 18.9% during the same period, showing that gold has outperformed the latter over this time frame. Even when compared to Indian indices, such as the Nifty 50 or the Sensex, gold has performed remarkably well.

The time frame that we consider for investment in gold is crucial. Depending on the timescale, longer or shorter, gold or the whole market may outperform, occasionally by a significant margin.

The key takeaway is that gold isn't always a wise investment. The best moment to invest in any asset is when there is a negative graph, and the purchase is not pricey, offering a significant upside potential when it returns to favour.

Takeaway

Every investment comprises both benefits and drawbacks. Purchasing shares in a gold mining firm might be a safer option if you don't want to hold physical gold. Purchasing coins, bullion, or jewellery might help you achieve financial success if you think gold might be a good investment against inflation. The futures market may be your best option, but remember that leverage-based holdings come with risk. Finally, if your main goal is to use leverage to profit from rising gold prices, this is the route you should choose.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. We are distributors of Insurance and Mutual funds, Bonds, Corporate Fixed Deposits, NCDs, PMS and AIF products and all disputes with respect to the said activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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is investing in gold still profitable? - icicidirect

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Is Investing in Gold Still Profitable? - ICICIdirect

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Every gold coin has two sides: buying gold can be profitable, but it can also be a losing proposition. The truth is always somewhere in the middle. Gold's profitability and inclusion in your investment portfolio depend on various elements, such as your investment objectives, time horizon, and, ultimately, your investment strategy.

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Know The Top Reasons to Invest in Gold Today | ICICI Direct

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Know The Top Reasons to Invest in Gold Today | ICICI Direct

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Gold is one of the best-known items of value in the world. It goes across cultural boundaries, and throughout history. Refer this article to know the top reasons to invest in Gold today at ICICI Direct

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Introduction

Throughout history, people have invested in gold as a store of value. There are substantial benefits of investing in gold, from an assured increase in value to backup funds. The cultural history of gold investments ranges from celebratory investments to a stable investment portfolio.

Today, there are so many options to invest in gold. Barring physical gold in the form of coins, bars, or jewellery, virtual gold and paper gold are some other options. In India, the RBI issues sovereign gold bonds for those who do not want to hold physical gold.

Additional read: Is Sovereign Gold Bond (SGB) a good investment option

Irrespective of what kind of investment you make, the benefits of investing in gold are numerous. This article will highlight the top eight reasons to invest in gold.

Why Invest in Gold?
1. A Store of Value
One of the obvious answers to why invest in gold is that the precious metal is a store of value. For generations, its value has only increased with time. That's because gold is a scarce metal and has significant social and cultural value. People want more of it. As a result, gold prices are constantly appreciating. If you want an investment instrument that will give you value appreciation in the long term, you should consider including gold in your investment portfolio. It doesn't have to be just physical gold. You could also purchase virtual gold or sovereign gold bonds.
2. Hedge Against Inflation
Over the years, gold has acquired the mettle of being a hedge against inflation. If the cost of living increases, the value of gold rises with it. Over the past 50 years, the price of gold has soared, even when markets have plummeted or the value of the currency has fluctuated. If you want to protect yourself against rising prices, then including gold in your portfolio should be a must.
3. High Liquidity
When you invest in an asset, an important factor to consider is its liquidity. Without adequate liquidity, your investment will not be useful in times of need. Gold is an extremely liquid asset. Whether you want to sell physical gold, or trade virtual gold in exchanges, there will always be enough buyers who want a slice of the pie. In times of emergency, you can bank on your gold investments to bail you out.
4. Portfolio Diversification
The price of gold is inversely related to the price of other market securities. When equity prices fall, or the broad market goes through a slump, gold increases in value. It is considered a safe haven asset. This is because the general society thinks of gold as highly valuable. If you want to build a solid portfolio that is well-diversified and risk-protected, then you should include a proportion of gold in your portfolio.
5. Mortgage Value
Another big benefit of investing in gold is that it has mortgage value. In case you need funds, you don't have to sell your gold investments. Instead, you can pledge them to a lender and take a loan against it. Even virtual gold and sovereign gold bonds can be pledged as collateral to get a loan from a bank.

Additional read: Looking to buy Bonds? Here's how Sovereign Gold Bonds compare with Gold ETF & Physical Gold.
6. Protection Against Uncertainty
Whether there is political uncertainty in your country of residence or geopolitical uncertainty, gold can protect you against wild currency fluctuations. As mentioned before, gold is considered a safe haven asset. When the rest of the assets in the world are in a flurry, you can count on gold for stability and value protection.
7. Central Bank-Approved Investments
Since 2010, central banks across the world have been increasing their gold investments. This is to diversify their assets and maintain a store of value in case their currency faces volatility. If central banks of large countries and institutional investors are turning to gold as a store of value, then it is a sign that individual investors can also bank on gold to meet their financial requirements.
8. Supply Constraints
Anything that has limited supply has more value. The supply of gold has been steadily decreasing since the 2000s. Finding new gold mines has been difficult, and even with the ones found, mining can take between five to ten years. As a result, the value of gold is bound to increase. If you invest in gold, you can reap the benefits of increasing prices.

Takeaway

You are entitled to numerous benefits if you choose to invest in gold. It helps with portfolio diversification, is a store of value, and can protect you against inflation. The question shouldn't be why invest in gold, rather, it should be how to invest in gold. You can invest in physical gold, virtual gold, or the latest tranche of sovereign gold bonds that the RBI is set to issue soon.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. We are distributors of Insurance and Mutual funds, Bonds, Corporate Fixed Deposits, NCDs, PMS and AIF products and all disputes with respect to the said activities would not have access to Exchange investor redressal or Arbitration mechanism . The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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the top reasons to invest in gold today - icicidirect

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The Top Reasons to Invest in Gold Today - ICICIdirect

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Throughout history, people have invested in gold as a store of value. There are substantial benefits of investing in gold, from an assured increase in value to backup funds. The cultural history of gold investments ranges from celebratory investments to a stable investment portfolio. Today, there are so many options to invest in gold.

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What is a Sovereign Gold Bond Scheme? | ICICI Direct

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What is a Sovereign Gold Bond Scheme? | ICICI Direct

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Sovereign Gold Bond Schemes are government securities denominated in grams of gold. Refer this article to know more about Sovereign Gold Bond scheme at ICICI Direct

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Introduction

For Indians, gold has been a valuable investment since time immemorial. There are concrete reasons to invest in gold. From accumulating jewellery to gold bars, Indian households are drawn to the yellow metal for its security, appreciation opportunities, and social value. Given its demand in the country, the Government of India launched a Sovereign Gold Bond (SGB) scheme in 2015. Since then, it has been issuing the bond in tranches for people to subscribe to it.

What are Sovereign Gold Bonds?

A sovereign gold bond is a government-backed bond. It is a way to invest in gold without actually owning gold physically. It is issued as a paperback or a digital gold bond certificate. SGBs are issued in tranches by the Reserve Bank of India on behalf of the government.

SGB investment is priced based on the average closing price of 999 purity of gold, as published by the India Bullion and Jewellers Association Limited for the previous three working days before the subscription period. The bonds are denominated in multiples of 1 gram of gold. SGBs have a maturity period of eight years, although you can sell them on the bonds exchange after five years.

Why Invest in Sovereign Gold Bonds?

SGBs are government-backed instruments that can help you hold gold without the hassles and risk of physical gold. There are many reasons to invest in sovereign gold bonds. Some of the reasons why one should invest in sovereign gold bonds are as follows:

1. Safe investments: Sovereign gold bonds are guaranteed by the government of India, so they are safe investments. Additionally, since you do not have to hold the gold in physical form, you are protected from theft, paying locker charges to store your gold and any other risks that come with holding gold in its physical form.

2. Stable returns: SGBs provide the advantage of returns at maturity plus a regular interest component. The latest tranche of the SGB scheme has been issued at an annual interest rate of 2.5%, to be paid semi-annually. You will also get the current price of gold of the bond's value upon maturity. In most cases, gold bonds are issued by the government at a discount on the average market price of gold.

3. Tax-efficient: Upon maturity of the bond, there are no capital gains charged on the gains. If the bond is redeemed after five years, you get an indexation benefit. Also, the interest received on the bond does not have tax deducted at the source.

4. Low minimum investment: You can invest in as little as one gram of gold under the SGB scheme. This is an affordable way of investing in gold if you want it in your portfolio.

5. Collateral: SGB certificates can also be used as collateral to get loans from banks.
Additional read: Is Sovereign Gold Bond (SGB) a good investment option
Should You Invest in Sovereign Gold Bonds?

In many ways, SGBs are new-age investment instruments for those who want to do away with the disadvantages of holding physical gold. Additionally, they provide regular returns and enjoy a sovereign guarantee. SGBs may be a good investment choice if you want to diversify your portfolio, don't want to hold physical gold, and don't mind waiting eight years until maturity.

While there are many reasons to invest in sovereign gold bonds, if you are accumulating gold for a specific reason, such as your child's marriage or to use gold jewellery at festivals, it is better to opt for physical gold. If you think you may have to sell your SGB within eight years to fulfil any of your needs, you need to consider that SGB secondary market sales will attract tax.

If you are looking at simply investing in gold for diversification benefits and as a hedge against inflation, then, as mentioned, there are numerous benefits to investing in sovereign gold bonds.

Conclusion

Now that you know about sovereign gold bonds and the reasons to invest in sovereign gold bonds, you can purchase the RBI's latest tranche of sovereign gold bonds on ICICIdirect.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. We are distributors of Insurance and Mutual funds, Bonds, Corporate Fixed Deposits, NCDs, PMS and AIF products and all disputes with respect to the said activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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what is a sovereign gold bond? - icicidirect

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What is a Sovereign Gold Bond? - ICICIdirect

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For Indians, gold has been a valuable investment since time immemorial. There are concrete reasons to invest in gold. From accumulating jewellery to gold bars, Indian households are drawn to the yellow metal for its security, appreciation opportunities, and social value.

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Support & Resistance - a trader's “best friend” in India - ICICIdirect

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Support & Resistance - a trader's “best friend” in India - ICICIdirect

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Support and Resistance levels are a vital indicator of price action and can be a trader's best friend. Refer this article to know more about ICICI Direct

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If someone were to tell you that the future prices of the securities or assets can be predicted, wouldn't life be much easier? This is where the concept of Support and Resistance comes in. In laymen's terms Support is the area beyond which the price does not fall & Resistance is the exact opposite, that is, the price doesn't cross this ceiling. These price barriers are formed due to higher levels of buying & selling near the Support and Resistance. Although these act as primary technical indicators for buying and selling they are not always precise. Support and Resistance are dynamic in nature which means weak Support and Resistance can be easily broken and strong may or may not be violated. Such fluctuations in either direction are known as "breakouts".

To get a clearer image of what Support and Resistance are and how they reverse roles lets walk through Mr. A's trading experience. Mr. A has a share X, that he bought at Rs. 10 in March. Now he realizes that between March and June the share (in an uptrend) fluctuated between Rs 10-15 but did not break out until June. Here Rs 10 acted as a support price and Rs 15 acted as the resistance. Each time the share gets closer to the support, traders tend to see it as a suitable entry point and hence we see a pullback in the price due to a high buyer concentration. In the same manner whenever the price approaches the resistance, traders who bought the security near the support levels tend to sell it and hence the price is pushed back down due to high seller concentration. Subsequently Mr. A noticed that once the share had its breakout the resistance i.e. Rs 15 became the new support for the share & a new resistance level formed at Rs 20. The key to using Support and Resistance to your benefit is to understand and strategize how and where to place your trade entry and exit points.

The first step to strategizing would be to learn how to draw your Support and Resistance levels. The simplest method to do so is by first choosing a timeframe for your analysis. Follow this up by drawing a line joining all the significant highs forming the resistance and then joining all the significant lows forming the support. An important fact for traders to keep in mind is that Support and Resistance must be treated as areas and not just lines on the chart. Security/asset prices do not always move in sync with the trendlines. For example, Mr. A's analysis shows the initial support was at Rs 10 but the price could possibly rebound even from a Rs 10.50 range if there is enough buyer concentration. This would mean that Mr. A misses his trade because he was waiting for the stock to reach the exact price.

This brings us to the most commonly practiced Support and Resistance trading strategy, i.e. Range Trading. Herein traders enter long when prices bounce back from the support and go short when prices pull back from the resistance. This is beneficial only in range bound securities. An important aspect to keep in mind is that in a downtrend going long at the support would be risky as the support may break and same is the risk with going short on a price near the resistance in an uptrend. To not fall prey to such mistakes, a trader should look out for major support and resistance levels and volumes. If any breakout is supported with heavy volumes, then it confirms the trend reversal.

When you understand how to use Support and Resistance strategies, you can move to more advanced methods such as moving averages as support and resistance, or using Fibonacci numbers. Moreover, most technical tools have some form of Support and Resistance beaded into it and hence it's important for every trader to understand the functioning of the same.
Key takeaways:

Support and Resistance are price areas.

Support and Resistance are dynamic in nature and consist of weak and strong Support and Resistance levels.

Weak Support and Resistance levels break easily, Major Support and Resistance levels either lead to trend reversals or breakouts in case of high buyer/seller concentration.

Support and Resistance levels help you to identify entry and exit points.

Disclaimer:
ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities/stocks/underlying quoted exemplary and are not recommendatory. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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support & resistance - a trader’s “best friend”  - icicidirect

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Support & Resistance - a trader's "best friend" - ICICIdirect

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If someone were to tell you that the future prices of the securities or assets can be predicted, wouldn't life be much easier? This is where the concept of Support and Resistance comes in. In laymen's terms Support is the area beyond which the price does not fall & Resistance is the exact opposite, that is, the price doesn't cross this ceiling.

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How to Do Trend Analysis Effectively | ICICI Direct

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How to Do Trend Analysis Effectively | ICICI Direct

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Trend analysis as a design research methodology involves collecting data about users as well as from users. Refer this article at ICICI Direct to know more about Trend Analysis

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Introduction

In intraday trading, you need to monitor stocks' price and volume movements to execute a successful trade. These data points move every second. However, how do you identify the right level to buy or sell a stock? A tool of technical analysis called market trend analysis can help you find the right levels.
Additional read: What is Intraday trading? A Beginner's Guide
Before you learn the ropes of doing trend analysis, let's understand what it means.

What is a trend?

A market trend is the general direction in which the price of a stock is moving. Depending on whether there is a bullish trend or a bearish trend, share prices could be moving upwards or downwards.

Trends do not always move linearly. The stock market is volatile. Share prices fluctuate wildly in the short term. Therefore, trends need to be analysed in the medium- to long-term. For a trend to be valid, it needs to sustain for a specific time. This can range from 10 days to 52 weeks or even longer.

If you identify price or stock movement within a day, it may not count as a trend.

What is trend analysis?
Additional read: Things to Know While Doing Intraday Trading
Trend analysis is a mechanism that can help you understand and predict the future movement of stock prices. Using market trend analysis, you can estimate whether a particular stock's price is set to go up or down. You can use this information to execute trades. Various data to estimate the direction of stock price movements are used for trend analysis and apart from this, there are numerous indicators one has to understand to conduct trend analysis.

Three common indicators used in trend analysis

As a novice intraday trader, you can begin by getting a hold of the following indicators:

1. Moving Average

Moving average is a technical tool used to average out price points to create a line graph. You can take the average over 20 minutes, a week, 10 days or any other time period you choose. The flat line helps eliminate extreme fluctuations. An upward trend is at play if the moving average line angles up. If it moves down, it can be considered a downward trend. You can also identify support and resistance levels using moving averages.

2. Moving Average Convergence Divergence (MACD)

Moving average convergence divergence is a momentum indicator used to understand the movement of prices. To graph MACD, the exponential moving averages (EMA) of two separate time intervals are taken, usually at the closing price, and a EMA signal line is drawn. The crossing of these two line give bullish and bearish signals.

3. Relative Strength Index (RSI)

Relative Strength Index (RSI) is among the most common and popular indicators used in trend analysis. It is used to measure the overbought and oversold zones of a stock's basis recent price movements.
1. Pick a stock you want to trade
How to do trend analysis?
2. Identify data points
Now that you have an overview of what a trend is and the common types of indicators to do market trend analysis, here's how you can go about conducting trend analysis:
3. Find the trend
First, choose a stock you wish to conduct trend analysis on. Monitor the stock's price and volume movements.
4. Watch the time
You need at least three contact points for a trend to be valid. Identify the points at which the price is moving.

Using technical analysis tools, identify whether a stock's price moves upwards, downwards or sideways. Also, keep an eye on the slope since this establishes the validity of the trend.

The longer a trend seems to last, the more valid it will be. Observe the stock price movement and only act on it if you have a verified trend.

Conclusion

Trend analysis is a powerful tool that can help you trade better in the stock market. To be a successful intraday trader, make sure you understand different technical analysis tools and get a thorough grip on market trend analysis before you jump into it.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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how to do trend analysis?  - icicidirect

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In intraday trading, you need to monitor stocks' price and volume movements to execute a successful trade. These data points move every second. However, how do you identify the right level to buy or sell a stock? A tool of technical analysis called market trend analysis can help you find the right levels.

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Know the different types of IPO investors? | ICICI Direct

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Know the different types of IPO investors? | ICICI Direct

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There are various kinds of investors in IPOs, which include foreign portfolio investors, mutual funds etc. Refer this article to know more about different types of IPO Investors at ICICI Direct

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What are the different types of IPO investors? - ICICIdirect

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IPOs have always piqued investors’ attention because they offer a great opportunity to invest in high-quality businesses looking to raise capital. Strong stable companies’ initial public offerings (IPOs) provide a win-win situation for both the business and the investors.

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What is NRE Account: Benefits & account opening process | ICICI Direct

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What is NRE Account: Benefits & account opening process | ICICI Direct

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NRE stands for Non-Resident External Account in its full form. It is an NRI bank account used by NRIs to send money from outside to India. Refer this article to know more about NRE accounts and its benefits at ICICI Direct

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What is the Role of Commodity Markets In India | ICICI Direct

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What is the Role of Commodity Markets In India | ICICI Direct

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Protecting investors by lowering risk and hedging prices is one of the most crucial roles of the commodity markets. Visit now at ICICI Direct and learn about the Role of Commodity Markets In India.

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Commodity markets have been around for several years now. However, it was only in 2003 that the regulators permitted exchange-traded mechanism. An essential part of the economy, commodity markets today perform several crucial roles. Here's a quick overview to help you understand the subject better:

Helps in portfolio diversification: The new-age investor is intelligent and on the constant lookout for attractive investment avenues to diversify his portfolio. However, traditional instruments such as equities, FDs, mutual funds, and gold continue to be the top choice for many. Commodity trading provides an excellent opportunity to all investors to explore a new category of assets that includes agricultural products, metals, livestock, and bullion.

Distributes the risk: The commodity marke t plays a vital role in minimising the risk that investors usually face. In fact, commodities can be used as hedging instruments as the risk is distributed between a large group of investors. For example, a jewellery manufacturer who is keen to hedge against the price volatility of gold can buy gold futures to lock in the price.

Increases investment in the agri sector: Due to the shortage of strong post-harvest infrastructure, lots of food grains get spoiled. This has a direct impact on the prices which affects both farmers and end-consumers. Thanks to a viable commodity market, it becomes more profitable for farmers, brokers and the middlemen, leading to more investments for the agricultural ecosystem. The investments can be utilised to ensure better warehousing and transport facilities.

Results in predictable pricing: Certain commodities are extremely elastic, and the manufacturers need to ensure stability to protect their market share. Commodity futures can play a critical role in providing more predictability in the prices. In the absence of a commodity market, the manufacturer may face severe short-term price movements.

Leads to better aggregation and financing in the agri sector: Organised commodity markets ensure an effective aggregation of agricultural products. Farmers also benefit from the institutional mechanism provided by this market to raise financing and reduces their dependence on the unorganised sector. The sale of agricultural products also takes place in a streamlined fashion due to such markets.

Reduces speculative excess: Speculative demand for commodities such as gold is extremely high. In fact, the demand for gold is often generated for speculative purposes, resulting in high imports and utilisation of foreign exchange resources. However, there are no corresponding benefits of such a speculative demand. With a strong gold commodity market in place it will be easier to absorb the speculative demand and safeguard forex resources.

Though the commodity markets are still in their infancy, the role of commodity market in India cannot be underestimated. Commodity trading plays a crucial role in regulating price discovery and hedging price risk to safeguard the investor.

If you are keen to explore more and try your hand at trading commodities, all you need to do is open a commodity trading account with a reputed retail broker.

Disclaimer

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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role of commodity market in india - icicidirect

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Role of Commodity Market In India - ICICIdirect

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Commodity markets have been around for several years now. However, it was only in 2003 that the regulators permitted exchange-traded mechanism. An essential part of the economy, commodity markets today perform several crucial roles.

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Know the Benefits of Forex and Currency Trading | ICICI Direct

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Know the Benefits of Forex and Currency Trading | ICICI Direct

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The foreign trading market is expansive, with traders from all parts of the world. Refer to this article to know more about the benefits of Forex and currency trading.

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The foreign exchange market is really big in terms of liquidity, accessibility and nature. It is possible to purchase and sell any currency over the counter. There is no physical exchange required in the forex market, unlike in many other markets. Besides, there are several forex trading benefits. Let's take a look at them.

1. It is truly a global market

When it comes to the forex market, it is very expansive and has traders who participate from across the globe. More than $4 trillion is exchanged daily on an average. The sheer size of the market gives huge benefits to traders.
2. Ideal for beginners
If you are a first-time trader planning to make small investments and learn about the market, forex is a great choice. One of the top advantages of the exchange is that the brokers give you a chance to use demo accounts. Through them, you can test the waters before you make a commitment to a deal.

3. Works all day for five days

The forex market is global, which means trading takes place at any hour. The market will always be open in some parts of the world and you can trade whenever you want to. It operates 24 hours a day and five days a week. The first market will open on Sunday at 5 pm in Sydney, Australia and the trading will end on Friday, 5 pm in New York.
4. Leverage
The brokers allow you to borrow against a small investment, thereby, giving you a chance to open a high position. There is a ratio that will show the money you can raise from leverage.
5. Higher liquidity
Forex and currency trading happens all day for five days and the forex market is considered to be the most liquid market globally. This makes it easier for retail investors to buy the assets and sell them with a low effect on their value. Liquidity also ensures minimal risk.
6. Directional trading
There are no restrictions with respect to directional trading in the market, unlike the stock market. Traders are constantly purchasing or selling a currency as per the market movement. So, you can conveniently sell short or go long based on your prediction of how the value will change. Due to the liquidity in currencies, the brokers do not apply high transaction fees that are usually applicable in the stock market.
7. It is a free market
With several participants in the market, there is no single-player or no one controlling it. It is a free market and external factors like the economy controls the prices. It shows the prominence of the exchange as an ideal investment option as there are no middlemen who exist. There are only brokers who help connect the buyers with the sellers.
8. Low charges
You can start forex trading with a small amount without having to worry about the major cost of transactions. The transaction cost includes the fees of the broker, and they are usually not very high.

There are several software and applications you can use to invest in forex.

Above-mentioned factors are some of the main benefits of currency trading and forex which makes it more dynamic than other markets. If you have the experience and skills, investing in foreign exchange can help generate high returns.
Reference link: https://www.motilaloswal.com/blog-details/10-main-benefits-of-forex-currency-trading/19959
https://www.thebalance.com/the-benefits-of-forex-trading-1344927

Disclaimer

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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benefits of forex and currency trading - icicidirect

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Benefits of Forex and Currency Trading - ICICIdirect

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The foreign exchange market is really big in terms of liquidity, accessibility and nature. It is possible to purchase and sell any currency over the counter. There is no physical exchange required in the forex market, unlike in many other markets. Besides, there are several forex trading benefits.

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How to Make Money on Forex Trading Online | ICICI Direct

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How to Make Money on Forex Trading Online | ICICI Direct

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Forex trading implies the conversion of one currency to another to make a forex trading profit. Visit now at ICICI Direct to know more about making money on Forex trading online

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Forex or FX trading is a stylised abbreviation for foreign exchange trading. Forex trading implies conversion of one currency to another with the objective of making forex trading profit. If you have ever travelled abroad, you would have converted the Indian rupee into the currency of your travel destination country, and, therefore, made a forex transaction. However, to enter the foreign exchange market and engage in trading for forex earning is an entirely different ball game.

Forex Basics

To be able to trade in the foreign exchange market, you need to be aware of certain basics which will come in handy to enable forex earnings.

Price Quotes: Usually a commodity is priced based on its utility value. However, in currencies there is no measure of its absolute value. The value of a currency is always relative to the currency it is compared against. Hence, in forex trading, the US dollar is used as the base currency for determining the value of other foreign currencies. Say, in terms of Chinese yuan and US dollar, the price quote could look like 0.1547 CNY/USD. Currency quotes are always listed up to four decimal places, and it implies that you would require 0.1547 US dollars to buy one Chinese yuan. Decoding the price quotes is an essential point to remember.

Understanding Arbitrage: In simple words, it implies exploitation of price differences in different markets, and capitalising on this difference to make forex trading profit. While the concept sounds inviting, you must remember that forex markets use state-of-the-art trading systems which leave little chance for imperfect price imbalances across markets. The corrections are almost instantaneous; hence the arbitrage technique might be rendered futile at times.

Choosing the right trading platform, broker: When you look to engage in the forex market, choosing an appropriate trading platform is absolutely necessary. Some of the factors that must be considered while choosing a trading platform are:

1. User-friendly and easy to access

2. Less commission obligations

3. Ability to copy trade of other users

4. Access to multiple currency pairs

5. Great research materials

6. Fast bank transfer deposits

7. Heavily regulated

While it is not mandatory to engage with a broker to trade in the forex market, considering the complexities, if you are a beginner, it is highly recommended that you tip toe with the help of a licensed broker who has the experience in forex trading.

Bring the Money Home

While understanding the basics of the forex market is prerequisite to begin trading, the real challenge remains to crack the market and make forex trading profits.

Currency Pair Trading: When you are transacting in the forex markets, you are essentially speculating and putting in trades for the values of currency pairs. One of the most traded pairs in the forex markets remains EUR/USD which implies that euro is your base currency against which the US dollar becomes the quote currency. For beginners, it is highly recommended that they transact in major currency pairs which involve strong currencies such as USD, EUR because they hold high liquidities. Another reason for transacting in major currency pairs is because they hold narrower spreads which imply less difference between the buy and sell price of the currencies, leading to limited loss exposures.

Fundamental and Technical Analysis: An important aspect of forex trading is the skill to read the market. By way of technical analysis, you will be able to read and interpret charts of pricing trends, and make educated speculations about the currency price movements. The fundamental research, on the other hand, implies being in touch with the news, updates of the economies whose currencies you're transacting with to calculate the impact of a particular situation on a currency's value.

Follow Trading Strategies:With respect to your financial goals, you should explore a trading strategy that could serve you the best. Trading strategies are not fool proof because the market is always changing, but relying on a tried and tested move has high probabilities of success. For example, to apply a swing trading strategy and focus on only major forex pairs may serve you well in your initial days of forex trading.

Conclusion:

As an investor, it is important that you remember your place in the forex market which is exactly like being a very small fish in a vast ocean. Your research, skillset to read technical charts can deceive you because the market can move in unexpected ways. The best you can do is to start small, learn along the way and gain momentum to crack big forex trading profits gradually.

Disclaimer
ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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how to make money in forex trading? - icicidirect

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How To Make Money in Forex Trading? - ICICIdirect

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Forex or FX trading is a stylised abbreviation for foreign exchange trading. Forex trading implies conversion of one currency to another with the objective of making forex trading profit. If you have ever travelled abroad, you would have converted the Indian rupee into the currency of your travel destination country, and, therefore, made a forex transaction.

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Tax on Commodity Derivatives in India | ICICI Direct

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Tax on Commodity Derivatives in India | ICICI Direct

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Taking or handing delivery of the commodity is how some deals involving commodities derivatives are settled. Refer this article now at ICICI Direct to learn more aboout Tax on Commodity Derivatives in India

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Tax on Commodity Derivatives: Income Tax on Commodity Trading in India - ICICIdirect

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The tax treatment of Commodity Derivativeis a topic that every trader delves into before dipping his feet in the world of derivatives trading. While the Derivative enjoyed exemption from taxes for a long time, the Commodity Transaction Tax was brought in by the Government to tax all non-agricultural derivatives.

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Silver Futures Trading: Know the Fundamentals, Benefits, and Risks | ICICI Direct

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Silver Futures Trading: Know the Fundamentals, Benefits, and Risks | ICICI Direct

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Silver Futures is an agreement between a buyer and a seller to carry out a commodity transaction. Refer this article now at ICICI Direct to know more about Silver Futures Trading

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Introduction

Among precious metals, gold and silver are considered to be most popular. They have been in use for many centuries as currency, jewelry, and as an investment option. Investing in silver Futures is also becoming an integral part of financial planning today.

What are Silver Futures?

Silver Futures is a contract between a buyer and seller to execute a transaction in the commodity. This is done by making an initial payment and signing an agreement to schedule the delivery on a later date.

Supply and demand of silver

While most silver is sourced from mines, a small part of it comes from the recycling of scrap. There is always a demand for silver. Aside from jewelry, silver is predominant in industrial applications. It is used in the form of electrical components, electronic products, solar cells, fabrication, and in the fashion industry.

Additional Read: How to choose the best Demat Account

Silver trading

Silver is available for trading on MCX. There are four variants of silver contracts:

Who decides the rate of silver?

The price of silver is determined by international prices and currency movement, that is, the rupee vs the dollar. If the value of the rupee falls against the dollar, silver will become more expensive. Speculative positions in the trading market also influence the price of silver.

Additional Read: How to convert Demat to BSDA?

Advantages of silver trading

Demand - The use of silver for industrial purposes improves the value of the metal.

Payment - You get additional time for the final settlement. This is because a contract is signed on one date and delivery takes place at a pre-decided future date.

Flexibility - A trader has provision to short sell silver.

Safe haven - Silver as an investment is considered to be safe because it is valued as real money.

Liquidity - Silver is adequately liquid on offer.

Risks of silver trading

Volatility - Economic slowdowns can alter silver prices, which can lead to losses.

Shifts - If silver is replaced by another element in its industrial usage, its value will drop significantly.

Limited prospective - As a tangible commodity, it only offers benefits when you sell during a period of a rise in its price.

Risk - There is a probability of default risk during such trades.

Price movement - Since silver is used in various industries, its price can fluctuate widely.

Conclusion

Silver is more affordable than gold, and is a practical investment option which has the potential to be very profitable. However, unprecedented demand from various industries across the globe can lead to a slight deficit. This, in turn increases the risk of price fluctuations while trading in this precious metal.

Additional Read: How to convert physical shares into Demat?

Disclaimer:

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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Silver Futures Trading: Know the Basics, Advantages & Risks - ICICIdirect

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Among precious metals, gold and silver are considered to be most popular. They have been in use for many centuries as currency, jewelry, and as an investment option. Investing in silver Futures is also becoming an integral part of financial planning today.

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Commodities & its importance in investment portfolios in India | ICICI Direct

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Commodities & its importance in investment portfolios in India | ICICI Direct

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A commodity is a fundamental item that is utilised in trade and can be used in place of other items of the same kind. Refer this article to learn about Commodities & its importance in investment portfolios

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Commodities and its importance in investment portfolios - ICICIdirect

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Here’s a very detailed article on commodities & why they should be part of your portfolios. Click here to learn the importance & value commodities bring to your investment portfolios.

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Understanding Commodity Indices in India | ICICI Direct

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Understanding Commodity Indices in India | ICICI Direct

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A commodity index is an index that tracks the price and returns on a basket of commodities. Refer this article at ICICI Direct to know more about Commodity Indices

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Imagine buying gold and not having to hold on to it physically. Would it not reduce a lot of transportation, storage, and stress for you to resell it to a third party? Let's not forget the carry costs you will be saving.

This is exactly what a commodity index does.

What is a commodity index?

A commodity index tracks prices and returns on a basket of underlying commodities. These underlying could be a combination of commodities or a single commodity. These indices when available for trading are listed on an exchange. Prices of these indices are based on the underlying set of commodities. Price fluctuations in an index are based on the proportion of the constituent commodities.

Commodities provide diversification in an investment or trading portfolio. Hence a commodity index would also. A commodity index generally has a low or negative correlation with an equity market.

A commodity index could be considered as an alternate investment vehicle whereby it provides an opportunity to take position in commodity derivatives.

Commodity indices in India

MCX iCOMDEX was launched by MCX in the year 2019. Salient features of iComdex are: -

MCX iCOMDEX series of commodity indices are excess return indices which consist of a composite index (constituting futures contracts across different commodity segments), two sectoral indices (Bullion Index and Base Metals Index) and four Single Commodity Indices (Gold Index, Silver Index, Copper Index and Crude Oil Index).

The underlying constituents of all the indices under the MCX iCOMDEX series are liquid futures contracts traded on MCX.

Other indices at MCX

In addition to iComdex, MCX has launched three sectoral indices, viz; BULLDEX, METLDEX and iComdex ENERGY Index. All these indices are available for trading at MCX in the form of Futures. iComdex Energy Index is the latest entrant. All these indices are sectoral indices and represents composite prices of a sector. For example; BULLDEX is based on precious metals (bullion), METLDEX is based on base metals and iComdex Energy Index is based on crude oil and natural gas.

How do I trade in a commodity index?

One can trade in multiple commodities at the same time either by trading in a commodity index or taking positions in multiple commodities separately. A commodity index is based on the future prices of the constituent commodities in a predefined weight and provides an opportunity to take an exposure in multiple commodities using a single futures contract.

Returns from a commodity index would depend on the weight and movement in the future prices of each underlying constituent.

Why the BULLDEX (Bullion index) is so popular?

MCX BULLDEX is a mix of Silver (30 kg) and Gold (1 kg) futures contract. Any investor who wants to take an exposure in these precious metals, may take a position via a single contract. Investors can also use this to diversify their portfolio because of the low correlation with other asset classes

Even though a commodity index might be a new term in the Indian markets, it's gaining momentu
Key takeaways:

A commodity index is a basket of commodities.

An index evens out the volatility of the constituent commodities and it becomes relatively easier to track different commodities through one index.

Commodity indices could be used effectively to diversify a portfolio.

Disclaimer:
ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No: 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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understanding commodity indices - icicidirect

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Understanding Commodity Indices - ICICIdirect

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Imagine buying gold and not having to hold on to it physically. Would it not reduce a lot of transportation, storage, and stress for you to resell it to a third party? Let's not forget the carry costs you will be saving. This is exactly what a commodity index does.

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How is the price of copper determined? | ICICI Direct

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How is the price of copper determined? | ICICI Direct

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The factors that affect copper prices are supply, demand, market pressure, and available inventories. Refer now to this article at ICICI Direct to learn more about the cost of copper determined

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There exists a doctor in the world of commodities who, in most of the cases, has the ability to forecast the global economic health. The commodity in question here is Copper, which is also known by the moniker 'Dr. Copper'. In this article, we will find out the reason behind this moniker and the factors which determine the price of copper.

Impact of economic developments on copper prices

Let's start by understanding the reasoning behind the moniker Dr. Copper. It has been observed that global economic developments tend to be strongly correlated with the prices of copper. This is because copper, which is a non-precious metal and is also the best conductor of electricity, has widespread applications in almost each and every sector of the economy, ranging from electronics, construction, industrial machinery to power generation and transmission. Due to copper's omnipresence in our world, this base metal is viewed as a reliable indicator of the global economic health, as implied by the moniker Dr. Copper. Rising market prices of copper reflect strong economic health and declining market prices indicate the opposite. However, Dr. Copper shouldn't be the only indicator of global economic health one considers while making forecasts.

Impact of supply on copper prices

Let's look at how the supply of copper impacts the prices of it. The production of copper ore is majorly concentrated in South America, with Chile accounting for almost one-fourth of the global supply of mined copper. Various factors like the supply levels of copper ore, the quality of the ores and the costs of extracting them, which we will discuss shortly, may also influence the price of copper. Commodity specific events like construction of new production facilities or unforeseen events like supply disruptions, natural disasters, worker strikes, and geopolitical instability may also impact copper prices.

Impact of exchange rates on copper prices

Let's now understand the impact of the USD-INR exchange rates on the prices of copper. Just like every other internationally traded commodity, copper is priced in US dollars and the Indian prices of copper reflect the prevailing international spot market. Let's understand this relationship of exchange rates with prices of copper through an example. Assume that there is a decrease in the value of the US dollar as compared to a copper buyer's currency, which means that the buyer will have to spend less of their own currency to buy a given amount of copper. Subsequently, as copper now becomes less expensive, demand for it rises which results in an increase in its prices and vice versa.

Along with this, weakening prices of the US dollar may also disincentivize producers to increase their output levels. Let's understand this through another example. Assume that the US dollar depreciates against the Chilean Peso, the currency of the country Chile, which also happens to be one of the largest global producers of copper. This depreciation of the US dollar against the Chilean Peso may reduce the profit margins for a copper miner in Chile, and since all the revenue which the miner receives will be in US dollars, it will now be worth less Pesos. Leadingly, this prospect of lower profit margins may compel copper suppliers to reduce production levels.

Impact of oil prices on copper

Let's now understand how oil prices can impact the price of copper. We all know that one can't use copper in its raw form. It needs to go through refinement and a lot of other processes before it becomes fit for consumption by factories and workshops. It turns out that these refinement processes are quite energy intensive, with energy costs taking up almost 30% of the total cost of extracting the ore, and the processes of smelting and refining can bump this up to 50% of the total cost. So whenever there would be a rise in oil prices, an increase in energy costs will also be observed which may also end up increasing the prices of copper.

Impact of trade policies on copper prices

Let's now understand how trade policies set up by governments end up influencing the prices of copper. Governments can either implement or suspend taxes with the goal of influencing the supply of copper by either restricting or encouraging the flow of copper in the market. This then ends up influencing the price of copper by either increasing or decreasing it based on the action taken by the government.

Impact of stockpiles on copper prices

Let's now look at how copper stockpiles also impact copper prices. According to copper producers, keeping an eye on copper inventory levels can give some clue about what the fair price of copper is. Theoretically, rising levels of copper stockpiles are indicative of a weak market, as supply exceeds demand, which results in stockpiling. Generally, copper prices and inventory levels move in opposite directions. So, when copper producers find the present market price of copper to be not so favourable and think that they can get a better price if they wait for a while, they may put their production into warehouse storage and then wait for better times in the market. When they find the prices of copper rising to levels deemed favourable by the producers, they may start rolling back the inventory back into the market, thereby increasing the supply and consequently impacting the price of copper as well.

On top of all these factors, speculatory activities done on the part of speculators like hedge funds which focus on commodity markets can also influence the prices of copper, at least in the short-term. As an example, some Chinese hedge funds in the past have taken advantage of poor liquidity and uncertainty in the market to move the prices of copper by a significant margin.

Also Read: Understanding Commodity Indices

Conclusion

To conclude, we can say that there are numerous factors at play when it comes to determining the prices of copper. The final price of copper which one may see in the commodity markets is almost always a result of a combination of the factors we discussed and some others as well, depending upon the general situation of the global markets.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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what determines the prices of copper? - icicidirect

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What determines the prices of Copper? - ICICIdirect

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There exists a doctor in the world of commodities who, in most of the cases, has the ability to forecast the global economic health. The commodity in question here is Copper, which is also known by the moniker 'Dr. Copper'.

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What factors affect crude oil prices? | ICICI Direct

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What factors affect crude oil prices? | ICICI Direct

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They regulate crude oil prices using the supply and demand principle, a cornerstone of economics. Refer to this article at ICICI Direct to know more about the factors that affect crude oil prices

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It is a widely acknowledged fact that crude oil, also known as black gold, is one of the most important commodities out there as it is the primary source of energy over which multiple crucial industries rely upon. As crude oil is an important commodity, it is paramount to understand what drives its price as any changes in the price tend to impact the economic outlook of the world at almost every level. In this article, we will understand what determines the prices of crude oil.

Oil price is in a constant state of flux, due to oil being such a crucial commodity. There are multiple factors which can influence oil prices and we will be going through a few of them, namely: the demand side, the supply side which is mainly governed by OPEC, the impact of events like regional conflicts and wars, weather and natural disasters, and the impact of upcoming alternative sources of energy.

Impact of supply and demand on crude oil prices

Firstly, let's understand how the traditional market forces of supply and demand influence the prices of crude oil.

The supply side is largely governed by OPEC, and it can be said that OPEC has a major influence over the prices of crude oil. The acronym OPEC stands for the Organization of Petroleum Exporting Countries. As of 2021, it is a consortium of 13 countries which as a whole control almost 40% of the world's crude oil reserves. The main objective of the participant countries of OPEC is to regulate the supply of oil to meet global demand levels and leadingly, exert control over oil prices.

Coming to the demand side of the equation, it has been generally observed that economic growth is strongly correlated with oil consumption. The reason for that is explained by higher power generation demands, increased demand for transportation and increased infrastructure building activities, particularly road building as roads require bitumen, which is a derivative of oil. All these factors then translate to a higher demand of crude oil and expectations of robust economic growth can potentially result in higher oil prices as speculators may anticipate a higher demand for crude oil.

Let's try to understand the impact of demand on oil prices through an example. If large importers of oil, like India and China start going through an economic slump, then it is likely that their demand for oil will drop as well. Due to these countries being one of the largest consumers of oil, a drop in demand from their side holds the potential to majorly reduce oil prices globally.

Impact of wars, conflicts and natural disasters on crude oil prices

Let's now come to the impact of events like wars, conflicts, and natural disasters on oil prices. Wars, conflicts, and political instability, at least in the Middle East can cause major fluctuations in oil prices. Historically speaking, events like the Iranian revolution, The Second Gulf War, Iraqi invasion of Kuwait and the Arab spring have impacted oil prices globally. Since the middle east has control over a major share of oil production and if incidents like the ones mentioned previously start impacting infrastructure critical to oil production, then it is highly likely that oil prices all around the world may witness a spike.

Let's now come to how weather and natural disasters impact oil prices through the help of an example. Back in the year 2005, when Hurricane Katrina hit the East coast of America, it caused extensive damage to oil rigs and supply lines, causing an oil crisis in America. Due to the leading disruption in oil supply, an increase in oil prices was observed. Extreme weather conditions hold the possibility of impacting oil prices due to the increased demand, with the objective of managing favourable weather conditions.

Impact of renewable energy sources on crude oil prices

Other than these factors, due to the pace at which renewable energy sources are becoming prominent and upcoming innovations which optimize fuel consumption in vehicles, there exists a possibility of a reduction in oil demand in the future.

All of us must be familiar with companies like Tesla, Rivian and some Indian companies like Ather Energy and Ola Electric, whose objective is to introduce electric vehicles for mass-adoption by the public. As we know that the transport sector is one of the biggest consumers of oil, the hegemony of petrol and diesel operated vehicles stands to be challenged due to advent of electric vehicles, which will hurt oil demand and eventually its price in the future.

Due to the pollution inducing nature of machines operating on petrol and diesel and also due to the environmentally concerning practice of oil drilling, climate agreements are also rolling out in multiple countries, with these countries pledging to reduce their reliance on fossil fuel driven technologies by gradually replacing them with cleaner alternatives within a stipulated time frame.

Multiple governments are also framing targets to reduce the production of vehicles running on fossil fuels and incentivising the production and adoption of vehicles driven by sustainable and non-polluting sources of energy. Countries are also aiming to reduce reliance on fossil fuels for power generation and shift to environmentally favourable practices like solar, wind or tidal energy. The position of oil in the global energy markets may stand to be displaced soon by alternative sources of energy, which will most likely impact demand and consequently the prices of oil as well.

Also Read: Different Types of Crude Oil and their Relevance

Conclusion

To conclude, other than the generic supply-demand variations which impact oil prices, the adoption of renewable sources of energy and agreements like the Paris Climate Accord may act as possible causes of the subsequent decline in the utility and consequently, the demand of oil, thereby impacting oil prices.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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what determines the prices of crude oil? - icicidirect

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What determines the prices of Crude Oil? - ICICIdirect

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It is a widely acknowledged fact that crude oil, also known as black gold, is one of the most important commodities out there as it is the primary source of energy over which multiple crucial industries rely upon.

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What Are Cross Currency Pairs in India | ICICI Direct

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What Are Cross Currency Pairs in India | ICICI Direct

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A cross currency is a pair of currencies where neither the base currency nor the quote currency is the US dollar. Refer to this article at ICICI Direct to learn more about Cross Currency Pairs

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Introduction

The US Dollar is the most owned currency in the world. So in a way, it makes sense that a majority of currency trading takes place in relation to the US dollar. However, some forex transactions may happen between other currencies. When the US dollar is not involved in currency trade, it is called a cross-currency pair.

Understanding currency pairs

The forex market or foreign exchange market is where currency trading happens. One currency may be traded out for another currency by a big bank, corporation, forex traders or institutional investor. Converting one country's currency to another result in currency pairs. For instance, let's assume you want to convert the Euro to US Dollars. This currency pair is represented as EUR/USD.

The first currency is the base or transaction currency. The second currency is called the quote currency. In the EUR/USD currency pair, EUR is the base currency, and USD is the quote currency. When writing this article, the EUR/USD quotes was at 1.0967. That means that 1 EUR is worth 1.0967 USD or you need to pay 1.0967 USD to buy 1 Euro.
Additional Read: A comprehensive guide to Currency Market
The emergence of cross currency

After World War II, growing international trade necessitated a forex market where currencies could be exchanged. Since the US economy emerged as the strongest globally, naturally, most currencies were exchanged in terms of the US dollar. However, as globalisation proliferated and trade among different countries began expanding, there was a need to exchange other currencies.

Initially, any currency trade required the US Dollar as an intermediary. If the Euro had to be exchanged for Japanese Yen, the trader would first have to exchange Euro for US Dollars and then use the US dollars to purchase Japanese Yen, thus requiring two transactions.

However, in light of the rapidly expanding forex market in recent years, cross-currency pairs have emerged. That is where currencies can be exchanged directly without involving the US Dollar.

Calculating cross currency pair rates

Although the US dollar is not directly involved in cross-currency pair transactions, it is still used to calculate cross currency pair rates. That's because the US Dollar is the most traded currency globally. Let's understand the calculation of cross-currency pair rates with an example.

Say you want to exchange the Pound Sterling for the Japanese Yen. This cross-currency pair would be represented as GBP/JPY. GBP is the base currency, and JPY is the quote currency. To arrive at the rate for this cross currency pair, you would first need the GBP/USD quotes. Then you would need the USD/JPY quotes. You will arrive at the GBP/JPY cross currency pair rate by multiplying the two.

Additional Read: Benefits of Forex and Currency Trading

Conclusion

Currency trading is a vital component of financial markets, used for various purposes such as hedging, speculation and diversification. While the US Dollar was an essential part of all currency pairs, given its gold standard, globalisation led to abolishing the gold standard and, consequently, the need for US Dollars to calculate currency pairs. Cross-currency pairs allow seamless currency trading without relying on the US Dollar.

Disclaimer:- ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Composite Corporate Agent License No.CA0113, AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. We act as a Syndicate, Sub -syndicate member for IPO, FPO. Please note that Mutual Fund Investments are subject to market risks, read the scheme related documents carefully before investing for full understanding and detail. . ICICI Securities Ltd. acts as a referral agent to ICICI Bank Ltd., ICICI Home Finance Company Limited and various other banks / NBFC for personal finance, housing related services etc. & the loan facility is subjective to fulfilment of eligibility criteria, terms and conditions etc. NPS is a defined contribution plan and the benefits would depend upon the amounts of contributions invested and the investment growth up to the point of exit from NPS. Insurance is the subject matter of solicitation. ICICI Securities Ltd. does not underwrite the risk or act as an insurer. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.
The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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what are cross currency pairs? - icicidirect

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What are Cross Currency Pairs? - ICICIdirect

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The US Dollar is the most owned currency in the world. So in a way, it makes sense that a majority of currency trading takes place in relation to the US dollar. However, some forex transactions may happen between other currencies. When the US dollar is not involved in currency trade, it is called a cross-currency pair.

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Know about Physical Delivery of Stock Options? | ICICI Direct

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Know about Physical Delivery of Stock Options? | ICICI Direct

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A stock option is a Contract where two parties agree that the buyer has the right to purchase or sell underlying stocks at a certain price. Visit ICICI Direct to know more the Physical Delivery of Stock Options

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What is Physical Delivery of Stock Options? - ICICIdirect

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As per SEBI circular, starting October 2019, it was mandatory for all Stock F&O contracts to be physically settled. Before October 2019 all contracts held till expiry used to be settled in cash. If a trader has an open position in Futures contract & in the Money Options that has not been squared off on expiry date, contract get physically settled .

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Understanding the Advantages of investing in Futures & Options | ICICI Direct

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Understanding the Advantages of investing in Futures & Options | ICICI Direct

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Futures and Options Contracts enable investors, companies, and governments to shift the risk attached to them to other parties. Refer this article to know more about the advantages of Investing in Futures & Options

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Introduction

The financial markets offer a plethora of investment options. If you want access to additional assets or markets, derivatives are a great investment option.

What are derivatives?

Derivatives are financial instruments that derive their value from underlying assets such as commodities, currencies, gold, bonds, stocks, and market indices. When you trade in derivatives, you earn by estimating the future price of the asset. Futures and Options are common derivatives in which two parties enter into an agreement to buy or sell an asset at a pre-determined price. This transaction has to be done on or before a future date.

Additional Read: How to link Aadhar Card with your Demat Account?

What are Futures?

Futures are derivative contracts in which the buyer and seller make a pact to buy or sell the underlying asset at a predetermined date and price. Also known as Futures contracts, they allow buyers and sellers to lock in the price at which the trade will be executed.

By the expiry date, the trade must be executed at the predetermined price regardless of any changes. This serves as one of the main advantages of Futures contracts. Types of Futures include Index Futures, Stock Futures, Currency Futures, Commodity Futures, and Interest Futures.

What are Options?

Options are contracts in which the buyer and seller have to execute the trade - buy or sell - in the underlying asset at a pre-determined price and date. In this case, the buyer is not obliged to execute the contract, and can allow the option to expire. However, the seller is obligated to execute the contract if the buyer decides to proceed with it. This flexibility is considered as one if the main benefits of Options contracts. There are two kinds of Options - Call Options and Put Options.

Additional Read: How to transfer shares from one Demat Account to another online?

Derivatives are of great significance in the financial world owing to the various advantages they bring with them. These include:

Price determination

In financial markets, the direction of the asset's price is unpredictable. Futures and Options allow buyers and sellers to decide on a specific price to trade in.

Market efficiency

Futures and Options help avoid imbalance of pricing in the market. How? The prices of these derivatives and the underlying assets tend to be in equilibrium. This helps increase efficiency in the financial markets.

Transaction costs

The cost of transacting in Futures and Options is lower as compared to the fees paid for trading shares and debentures. This reduces the transaction costs of these financial instruments.

Risk management

Since the value of Futures and Options is related to the value of the underlying asset, the contracts are used for hedging risks. That is, you can offset your losses if your contract value moves in the opposite direction.

Transferable risk

Futures and Options contracts allow investors, businesses, and municipalities to transfer the risk associated with them to other parties.

Conclusion

Trading in Futures and Options is now grabbing the attention of individual investors. At low transaction costs, you can access these financial instruments and hedge your position in the markets.

Additional Read: How to choose the best Demat Account
Disclaimer
ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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advantages of investing in futures and options - icicidirect

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Advantages of investing in Futures and Options - ICICIdirect

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The financial markets offer a plethora of investment options. If you want access to additional assets or markets, derivatives are a great investment option. Derivatives are financial instruments that derive their value from underlying assets such as commodities, currencies, gold, bonds, stocks, and market indices.

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Know the Advantages of Options Over Futures | ICICI Direct

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Know the Advantages of Options Over Futures | ICICI Direct

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The advantage of being able to purchase the underlying asset is that it allows the option trader more flexibility. Visit now at ICICI Direct to know more about the Advantages of options over Futures

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Introduction

The derivatives market is larger than the commodities market. Options trading and Futures trading play a key role in it.

What are derivatives?

Derivatives are financial contracts that derive value from the underlying assets such as stocks, commodities, bonds, currencies, and market indices. These determine the profit and loss made on these contracts.

Understanding Options and Futures

In a Futures contract, there is an obligation to buy or sell assets at a predetermined price and time. Options, however, give the buyer the right but not the obligation to trade . They carry great potential for making substantial profits. These contracts also offer significant leverage on the future value of their underlying assets.

Additional Read: How to choose the best Demat Account

While both can be profit-making, options bring with them certain advantages that could make them more attractive to an investor. Here are the benefits of options trading:

Flexibility

As an investor in Options, you have the alternative to walk away from your contract at any point in time. In Options, buyers are not under any obligation to execute the contract. However, in Futures, both buyers and sellers are obliged to do so.

Cost-efficiency

Options offer you considerable leverage. These derivatives bring with them the benefit of huge savings in costs. Which means, if you were to buy an Option against your portfolio, you can minimise your losses if the shares you owned decreased in value. As you enter an options contract on lower margins, you can earn greater returns.

Additional Read: How to convert physical shares into Demat?

Limited risk

The risk in the case of Options is limited to the premium you pay for the contract. The cost of an Option is a very small percentage of that of the underlying asset. If your Option expires, you will lose only the cost of your contract. Which means, you are aware of the amount of your potential loss at the time of entering the contract. However, Futures contracts are valued by that of the underlying asset. Which means, it is not possible for you to know for sure how much you could gain or lose. Losses in Futures contracts can exceed your original investment.

Strategies

There are many strategies available in the Options market. You can hedge positions and combine your trades to create a strategic position and make significant returns. This is usually done by taking advantage of factors like market volatility and timing.

Conclusion

There are two types of Options, depending on whether you are buying or selling. These are:

Call Option: These are contracts that give investors the right to buy the underlying asset at a specific price.

Put Option: These are contracts wherein investors have the option to sell stocks at a specific price before the expiration of the contract.

While Options and Futures share certain similarities, there are significant advantages of Options over Futures when it comes to aspects like risks and rewards.

Additional Read: How to convert Demat to BSDA?
Disclaimer
ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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advantages of options over futures - icicidirect

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Advantages of Options Over Futures - ICICIdirect

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The derivatives market is larger than the commodities market. Options trading and Futures trading play a key role in it. Derivatives are financial contracts that derive value from the underlying assets such as stocks, commodities, bonds, currencies, and market indices. These determine the profit and loss made on these contracts.

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How to Calculate Turnover for F&O Trading | ICICI Direct

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How to Calculate Turnover for F&O Trading | ICICI Direct

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The turnover of options can be calculated by adding the premium obtained on selling the options to the absolute profit. Refer to this article at ICICI Direct to learn how to calculate turnover for F&O Trading

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Introduction:

India is witnessing a surge in investments and trading in the derivatives segment. Derivatives are financial instruments that derive their value from the underlying assets like indices, stocks, commodities, currencies, etc. Futures and Options are two popular variants of derivatives that can deliver notable returns. Knowing how to calculate your turnover in this business is an integral part of the basics you should know.

Understanding the basics of Futures and Options

Futures

A Futures contract is an agreement between the buyer and seller to trade a given quantity of an underlying asset. This takes place on or before a particular date in the future. The price at which the trade takes place is also pre-decided.

Options

An Option is an agreement that gives you the right to purchase or sell a given quantity of the underlying asset at or before a particular date in the future. This transaction will take place at a pre-determined price. Here, it must be emphasized that you have the right, but not the obligation to buy or sell the underlying asset.

If you find the Options contract unfavourable, you can consider postponing the trade to a future date, sell it on an exchange or let it expire. However, if you wish to buy, the seller has to sell it as per the terms of the contract. He cannot deny the trade.

There are two types of options - Call Option & Put Option. A Call Option gives you the right to purchase an underlying asset at a pre-decided price until the contract's future expiry date. A Put Option gives you the right to sell an underlying asset at a pre-decided price until the contract's future expiry date.

F&O turnover

Investment and trade in Futures and Options are considered to be a business from a taxation point of view. Hence, you have to calculate your turnover in F&O trading for filing your taxes accurately. The first step in this direction will be to tabulate your total income from F&O. Depending on how profitable your trades were, your income could be positive or negative. You can arrive at your net income by deducting expenses like brokerage, utility bills, commission, etc that are directly related to your business of F&O.

Stepwise calculation of turnover in Futures and Options

You can calculate the turnover in your F&O business after taking into consideration the following factors:

Calculation of the total profit and loss

The premium paid or received while trading in Options

The quantum of reverse trades done and the difference in profit/loss incurred

Total Futures turnover (across all transactions done in a given year) = Total profit - total loss

Total Options turnover (across all the transactions done in a given year) = Total profit - total loss + total premium received for the sale of Options - total premium paid for the purchase of Options

Taxation for F&O business

You have to file your returns for your F&O transactions, irrespective of it being positive or negative. You can enjoy tax benefits if your F&O business is running in losses.

Under section 44AB, a tax audit is required if:

Your F&O turnover is in a loss

The trading turnover exceeds Rs. 1 crore

The trading turnover exceeds Rs. 2 crore and it is protected by the presumptive taxation scheme.

You will have to get an expert on the subject matter such as a Chartered Accountant on board for the tax audit in order to:

Create your balance sheet

File your tax audit report

File your ITR

You can avoid a tax audit if you do not claim a refund and carry forward the losses. Here, you can set off the losses against the profits earned in the future and reduce your tax liability.

Conclusion

Tabulating your net income and filing taxes can be tricky when it comes to your F&O business. Hence, along with understanding the ropes of F&O trading, it is also important to know how to calculate your turnover in this business.
Additional Read: All about Income Tax in India: Basics, tax slabs, and e-filing process Additional Read: Income Tax Rebate? What is Income Tax Rebate? Additional Read: What are the Benefits of Filing Income Tax Return on Time? Additional Read: What is Form 16? Basics Part A & Part B of Form 16 Disclaimer
ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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how to calculate turnover in futures and options trade - icicidirect

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How to Calculate Turnover in Futures and Options Trade - ICICIdirect

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India is witnessing a surge in investments and trading in the derivatives segment. Derivatives are financial instruments that derive their value from the underlying assets like indices, stocks, commodities, currencies, etc. Futures and Options are two popular variants of derivatives that can deliver notable returns.

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Pick the Right Options to Trade | ICICI Direct

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Pick the Right Options to Trade | ICICI Direct

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Options Trading is all about making the right choice by using the proper strategy and the proficiency you were able to develop. Refer to this article to know more at ICICI Direct

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First things first, before diving into the discussion of buying or selling an Option, let's briefly understand the market of Options.

Let's do it with the help of an example.

Let's say you wish to buy this specific car in its flagship blue color that costs Rs. 5 lakhs. Now you go to the showroom and meet with a conundrum. At the showroom, you find out that the color you were so eager to buy, isn't available this month and that the taxes for vehicles in the coming month may increase.

Now you're in a dilemma and have to pick between another color and a lower price or the color of your choice but a possibly higher price.

So here's when the dealer offers you a deal (I mean, that's what they do right?) The dealer says that you could make a small payment right now, and reserve a blue color car for next month at the present day's price. This way you get the color and also since you made the booking right now, you pay the taxes for this month. So you decide to make the payment of Rs. 10,000 right now and book the car. However, this does not include the cost of the car, and you're essentially paying this amount just to be able to buy the car at the present day's price in the next month. Let's call this amount the 'premium'.

Okay, so let's consider the possibilities now. The taxes in the following month could either be more than the previous month, or less or the same.

If the taxes increase, it makes sense to buy the car so you instantly go and purchase the car by paying the Rs. 5 lakhs that was decided.

Now let' say the taxes fall and the car now costs Rs. 4.5 lakhs. In this case, it makes sense to let go of the premium that you paid and buying the car at the current market price since you still save Rs. 40,000.

If the taxes remain the same, you still stand to lose, but only the premium amount of Rs. 10,000.

The Options market works much in the same way. A buyer and a seller make a contract for a transaction for a future date.

As you may have realized in the car example, if the price of the car fell, you had the option to not go ahead with the deal, letting go of only the premium that you paid.

However, if you did go ahead, the car dealer would have to sell the car to you at the pre-decided price.

This phenomenon in the Options market is called the Call Option, wherein the buyer of the Option reserves the right to buy and the Options seller must comply with the decision of the buyer of the Options.

The other Option in the market is the Put Options, wherein the buyer of the Options reserves the right to sell and the seller of the Options must comply with the decision of the buyer of the Options.

Multiple factors are considered while deciding whether to buy or sell an Option. Here are a few things to keep in mind:

Position matters

In the case of the buyer in a Call Option, the maximum loss is the premium paid (in case they do not continue with the contract at the decided date), while the profit is unlimited since the price of the underlying asset can go up to any amount while the buyer gets to buy it at the decided amount. The Call seller may lose an unlimited amount and can earn up to the premium received.

On the other hand, in a Put Option, in a similar way, the buyer will earn when the price of the underlying falls.

Volatility rocks (the prices of the shares)

One school of thought also believes that it is always advisable to be buying Options when the volatility is likely to go up and sell Options when the volatility is likely to go down. Options prices (premium) are likely to rise with an increase in volatility.

When predictions become the deciding factor

If you have a defensive view, for example, if you are sure of a stock price not going above Rs. 500 or the price is likely to move within a small range, then it is better to sell a Rs. 520 Call Option than buying a Call Option.

Events: cents or dents

It also depends on the events that take place. It is not advisable to sell Options ahead of a significant event where you expect a considerable upside or downside in the prices. Option selling could be disastrous in those cases.

It would be better to look out for buying Options in such times.

In all, there is no definitive conclusion as to whether buying or selling an Option is inherently better than the other.

It all depends on your willingness to take risk, and the factors discussed. While the risk would be higher or lower depending on your position, this does not account for the probability of the price change being in your favor or not.

Key takeaways:

In Options, buyers have the choice of not exercising their right if it is loss bearing.

In a Call Option, the buyer has the right to buy the underlying, while in a Put Option, the buyer has the right to sell the underlying.

The buyer of an Option faces a loss only equal to the premium paid, i.e., limited loss, whereas the profit can potentially be unlimited.

Disclaimer:
ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. The contents herein mentioned are solely for informational and educational purpose.

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which ‘options’ will you pick? - icicidirect

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Which 'Options' will you pick? - ICICIdirect

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First things first, before diving into the discussion of buying or selling an Option, let's briefly understand the market of Options. Let's do it with the help of an example. Let's say you wish to buy this specific car in its flagship blue color that costs Rs. 5 lakhs.

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Know the Difference Between Futures v/s Options | ICICI Direct

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Know the Difference Between Futures v/s Options | ICICI Direct

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Options and Futures are trading instruments that give investors the ability to profit and insure their present assets. Visit now at ICICI Direct to know more about the difference between Futures vs Options

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Introduction:

Investing in derivatives can be highly profitable. Derivatives are fast gaining importance as money-making instruments and are also used to hedge risks. Before you decide on which derivative would be most suitable for you, you should understand how they differ from each other.

What are derivative contracts?

Derivative contracts are agreements that derive their value from the underlying asset that they represent. These underlying assets can be financial instruments like stocks, bonds, currencies, and commodities. While the value of a derivative is based on the underlying asset, the investor does not own this asset.

Futures

A Futures contract is an agreement to buy/sell a pre-determined quantity of an underlying asset on or before a given date in the future. The price is decided in the present.

In this agreement, the buyer and seller have an obligation to execute the trade on the said date.

Futures are standardised contracts that can be traded by investors in an exchange.

Options

An Options contract is an agreement to buy/sell an underlying asset at a pre-determined price. The contract has to be executed on or before the expiry date.

In an Options agreement, there is no binding or obligation on the buyer to execute the trade. The buyer has the option to refuse if the deal is no longer profitable.

There are two types of options: Call and Put

A Call option is an agreement to buy an underlying asset at a pre-determined price before its expiry. A Put option, on the other hand, is an agreement to sell the concerned asset.

Why are Futures and Options used?

Futures and Options are important components of the financial arena. There are two key benefits to invest in these derivatives:

Hedging risks

Both these derivative contracts are largely used for hedging risks of volatility in exchange rates or commodity prices. They effectively safeguard businesses from price fluctuations.

Earning through speculation

Options and Futures contracts are volatile in nature. This makes them an interesting alternative for speculative trading.

Differences between Futures and Options

Obligation

A Futures contract is a standardized agreement between a buyer and a seller to trade a certain quantity of an asset at a particular date in the future at a pre-negotiated price. In a Futures contract, you are obligated to purchase the asset on the mentioned date in the future.

An Options Contract enables you to purchase the said asset at a decided price. However, you are not obligated to proceed with the purchase. However, if you choose to buy, the seller is obliged to sell it as per the terms of the contract.

Risk Quotient

In this case, you have to proceed with the purchase on the stated future date even if the trade is unprofitable. For instance, if the price of the underlying asset drops below the price stated in the Futures contract, the purchase will still take place at the price mentioned in the contract as it is binding.

A Futures contract is riskier as it comes with potentially high profits or losses

In an Options Contract, you have an option to refuse the trade and opt-out of it if the price is not favourable to you. For instance, if the market price of the underlying asset drops below the price stated in an options contract, you can limit your losses by not proceeding with the trade.

An Options Contract is relatively safer as it can be profitable as well as shield you against losses to an extent.

Payment terms

There is no clause for advance payment in a Futures contract. You only have to pay the pre-decided price when you execute the trade.

In an Options contract, you have to pay a premium. This premium is the price paid for the opportunity to choose to not proceed with the contract if it is no longer profitable. If you decide to do so, you lose the premium paid in advance.

Trade execution date

Here, you have to execute the trade on the date stated in the contract.

Here, you can execute the trade on any date before the expiry of the contract. You can choose to buy at a time that is profitable to you.

Conclusion

Ultimately, your risk appetite and financial goals can guide you to the financial derivative instrument best suited for you. If you are a newbie in the derivatives market, be sure to read up and arm yourself with enough knowledge for a safe ride.
Disclaimer
ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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futures v/s options: understanding the differences - icicidirect

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Futures v/s Options: Understanding the Differences - ICICIdirect

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Investing in derivatives can be highly profitable. Derivatives are fast gaining importance as money-making instruments and are also used to hedge risks. Before you decide on which derivative would be most suitable for you, you should understand how they differ from each other.

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Volatile Trading Strategies for the Options Market | ICICI Direct

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Volatile Trading Strategies for the Options Market | ICICI Direct

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Options strategies for a volatile market are those that allow traders to profit from wildly fluctuating market prices in any way. Refer this article to know about Volatile Trading Strategies for the Options Market

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The impact of recent market volatility:

Nifty ended 2021 at 17354 and gave around 24% return. It is considered to be the best year for investors since 2017. However, since the beginning of this year, markets have been quite volatile. It started the year at 17387 levels on 3 rd January 2022, moved up nearly 1000 points to 18350 levels. Post that there has been downward momentum firstly due to the new Omicron variant and now an ongoing war tension between Russia and Ukraine. From the high of 18350, Nifty made a low of 16203 and dropped 2146 points or -13.25% in zig-zag manner. See price chart below for better understanding.

High volatility in last week of Feb continues

Last 1 week has been extremely volatile. The average daily High-Low for last 5 days of February has seen Nifty move 345 points on an average. Due to such significant ups and downs, option sellers have been impacted the most. Short Sellers, who are a bit aggressive in their trading style deploying strategies like Short Straddle, Short Strangle and naked Short Puts, are the worst hit.

The premium for Nifty 16000 CE for 3 rd March 2022 expiry dropped from ₹1200 to ₹500 and rose up again above ₹800 in the next trading session. Similarly, Nifty 16200 CE dropped from ₹1050 to ₹400 and went up again above ₹600, while Nifty 16500 CE dropped from ₹750 to ₹200 and went above ₹400. All these strikes took a leap because they were close to ATM or ITM. 17000 CE dropped from ₹350 to ₹100 where it became OTM and surprisingly, even after market recovered on 25 th Feb, the premium of this call didn't increase. This was due to the unpredictable behaviour of Implied Volatility taking a toll. See 30-minute price chart of each strike given below for detailed behaviour during last 5 trading sessions.

Where is the Problem for Traders ?

There are traders who trade without hedging and try to hedge their position after the market has shown the significant movement. During this time the hedge is ineffective because the strategy has already incurred loss. Such step would only limit the strategy from incurring further losses in case the market continues the momentum. Trading in such extreme zig-zag movements for option sellers is always a challenge.

During such high volatile days, some traders try to short naked Calls, however, the price of the Call tends to drop slowly due to offsetting nature of the Implied Volatility increase. In contrast, the Put premium tends to rise very quickly due to Vega value getting added to the premium due to increase in IV. This can be seen as a sharp increase in Put value in the chart below. Soon after that, there was a sharp drop in Put premium because of two reasons: One due to the recovery in the market, and other due to drop in Implied Volatility. Nifty's Volatility on 24 th Feb 2022 went up to 27% from 22.05% and then dropped to 24% on 25 th Feb 2022.

Another surprising behaviour observed in the chart is that when the markets continued recovering till 28 th Feb where it closed at 16793, the Put premium didn't fall in tandem. This was again due to the unpredictable behaviour of Implied Volatility. The offsetting behaviour of IV helped Put premium from declining any further. Understanding IVs is important while trading. Implied volatility is the present volatility implying the behaviour of the market. In simple words, it is the market movement expected irrespective of the direction normally shown as percentage value on an annual basis.

What is India VIX?

India VIX or India Volatile Index is the term used by NSE to measure the market volatility. Volatility is the continuous price fluctualtion or the rate of change of price of a stock. This measurement of change in price is associated with market risk and it is sometimes referred to as fear gauge by investors. The concept of VIX was first introduced by Chicago Board of Exchange and later Indian exchanges adopted it to gauge the perception of market for next 30 days. It is calculated by using order book of the Index options which is derived using complex mathematical equations used in Black-Scholes model and it is shown in percentage terms. It is calculated using Bid-Ask quotes of the near month and next month NIFTY Options contracts. The detailed calculation of India VIX is complex in nature and it require separate blog article of its own.

Why India VIX is important?

India VIX is important because it gives perception of the market for next 30 days and thus investors can take appropriate action for their existing and future investments. India VIX and Nifty is considered to have an inverse relationship with each other. Whenever there is an increased fear in the market, the investors start selling due to panic and as a result India VIX increases. When the market stabilises or when it is less volatile, you can see India VIX falling. See comparison Chart for India VIX and NIFTY below to give a sense of their Inverse relationship.

So, what is Hedging?

Hedging essentially a means to limit risk. It is a way to protect a portfolio or an options position. Hedge funds, mutual funds, HNI traders and veteran derivatives trader who have been investing in market for a long time and would like to keep doing so for many more years, deploy various hedging techniques to suit their investment requirements as opposed to naked buying or selling of Stocks, Futures and Options. There are various standard strategies available in the market like, Bull or Bear Spread, Iron Condor, Butterfly, Calendar spreads, Covered Call/Put and much more. It involves multi-leg strategies where a trader takes an opposing position to the actual exposure in the market to reduce the risk. It acts as an insurance for our portfolio just like the insurance we have for our cars and ourselves to protect us from the adverse events in our life.

Why hedging is important?

Hedging is a strategic tool used by highly sophisticated players in the market who understand the importance of risk management.

Hedging provides firms or individual a unique differentiation in highly competitive environment.

When managed efficiently, it gives trader an edge to generate consistent income without taking significant risks.

Hedging helps a trader to manage the volatility of MTM (Mark to Market) cash flows during adverse market conditions.

It gives clear picture of the portfolio risk.

It helps define the risk appetite of a trader.

It encourages a trader to gradually increase their investment and profitability.

I am a trader with small fund, how can I hedge ?

Around June 2020, SEBI introduced a margin framework which helps traders avail the reduced margin benefit by building a hedged position in F&O segment. In simple words, if a trader takes a position and hedges it with another offsetting position, the total margin required to take the position drastically reduces. Sometimes it reduces by nearly two-thirds depending upon the strategy deployed.

In ICICIdirect account you can use Pay-off Analyzer and Basket Order to form a strategy and view required margin and final reduced margin benefit for the strategy. To give you a perspective, let's go through few examples with trading screen from ICICI direct account.

Example 1: Simple Naked Sell Nifty

In this example, suppose a trader is having a bearish view of the market and he sells 16700 Nifty CE with 3 rd March Expiry Date. You can see in Basket Order that the required margin is 112,417.40 which for a small trader is big amount. Let's look at hedged example with two legs option strategy.

Example 2: Simple Bear Call Spread having two legs of options contracts.

Suppose a trader has a bearish view of the market and deploys a Bear Call Spread strategy by Selling Nifty 16700 CE and Buying 16800 CE. In Payoff Analyzer, a trader can check the maximum profit and loss and breakeven point of the strategy for today's pay-off and Expiry Day pay-off. In Basket Order you can see that the margin required is ₹122,789.90 and the final margin required due to hedge is ₹32,520.40. A whopping ₹90,269 reduction in margin or 74% margin benefit applied! This is a significant reduction for traders with small capital in their account. Let's also look at 4 legged iron condor strategy where some traders have misconception that huge margin will be required to trade.

Example 3: Iron Condor with 4 Legs options strategy

Suppose a more experienced trader wants to trade a complex strategy like Iron Condor with a neutral view of the market. He Sells 16800 CE and Buys 16700 CE (which is also called Bear Call Spread). Similarly, he sells 16600 PE and buys 16500 PE (which is also called as Bull Put Spread). In this strategy, the required margin is ₹223,053.80 and the final margin required is ₹55,681.30. A margin reduction of ₹167,372.50 or 75% benefit of margin due to hedge on both sides of Call and Put!

Margin Summary:

From the summary table, you can see that a significant drop of nearly 75% margin benefit is received by a trader who hedges the position.

How to trade in such high Volatile market?

As explained at the beginning of this article, risk management is the key to options trading. Creating a hedge before the initiating the trade is most important, and not after entering the trade. Hedge comes at a cost as it lowers profits, but protects downside, which is most critical. As they say in Option selling 1 loss can drown 10 gains!

Disclaimer:

ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. I-Sec is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning, Investment Advisory etc. are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose. The securities quoted are exemplary and are not recommendatory. Such representations are not indicative of future results.

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options trading in volatile markets - icicidirect

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Options Trading in Volatile Markets - ICICIdirect

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Nifty ended 2021 at 17354 and gave around 24% return. It is considered to be the best year for investors since 2017. However, since the beginning of this year, markets have been quite volatile. It started the year at 17387 levels on 3 rd January 2022, moved up nearly 1000 points to 18350 levels.

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How to trade Options online in India | ICICI Direct

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How to trade Options online in India | ICICI Direct

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You can buy and sell equities by engaging in options trading. Start your trading career with ICICI direct today and learn the detailed steps for trading stocks online in India.

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What is Volatility Index how it impacts Options pricing in India | ICICI Direct

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What is Volatility Index how it impacts Options pricing in India | ICICI Direct

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VIX measures the Implied Volatility, which represents the market's expectation of a security's price movement. Visit ICICI Direct to know more about Volatility Index

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India VIX, which is the acronym for the India Volatility Index, is an implied volatility index representing the expectations of the market for the relative strength of any near-term price changes of the NIFTY Index options. It means that this real-time index is derived from the prices of the NIFTY index options having near-term expiration dates and it generates a forward projection of the volatility in these prices for the next 30-days.

The India Volatility Index was first introduced in the year 2008 by the National Stock Exchange (NSE). The origination of the concept of a volatility index can be traced back to the year 1993, when the first volatility index was introduced by the Chicago Board Options Exchange.

One should keep in mind the difference between a price index like NIFTY and a volatility index like the India VIX. A price index, for example NIFTY, is calculated by taking into account the price movement of the stocks which are included in the NIFTY index. Whereas the volatility index, which is India VIX in this case, is computed by making use of the underlying index options and is represented in the form of an annualized percentage.

Since its inception, India VIX has been used as a measure of gauging the volatility in the markets and also used by a number of market participants in framing their investment decisions.

It is important to understand the concept of volatility before getting to know how the value of India VIX is determined. Volatility is essentially a measure of how quickly the prices change, or in other words, it represents the amount of fluctuations in a security's price over a given time period. Volatility can be calculated by computing the variance between the price of an asset and a market index, which is the NIFTY index in the case of India VIX. Generally speaking, higher the volatility, greater is the risk associated with the security.

VIX measures the Implied volatility, which is a likely movement in the price of a security as forecasted by the market. It is a measure of estimating any fluctuations (volatility) in the price of the security in the future, on the basis of some predictive factors. Typically, implied volatility tends to increase in bearish markets and decrease in bullish markets. Time periods associated with greater market uncertainty which are characterised by higher expected future volatility give rise to higher VIX values and relatively stable times correspond to lower VIX values.

As an example, if the value of India VIX is 13.8495, it is representative of an expected annualized change of 13.8495% over the next 30 days.

Computing the value of India VIX

In order to obtain a value for the India VIX, the NSE employs a computation methodology similar to that used by the CBOE along with some suitable changes which adapt the process to the NIFTY options order book. This computation of India VIX is carried out using the best bid-ask prices of NIFTY options contracts and the prices of these calls and puts are used to calculate the volatility. The below listed factors are instrumental in obtaining the final computed value of the volatility index:

1. Time to expiry

The computation of the time to expiry is done in the magnitude of minutes rather than days in order to arrive at precision levels which are deemed as acceptable by professional market participants.

2. Interest rate

The interest rate, also known as the risk-free interest rate, is the relevant tenure (30 days or 90 days) Mumbai Interbank Offer Rate, or MIBOR rate, which is the rate at which banks can borrow funds from other banks in the Indian interbank market. In the subsequent computation, this is the interest rate for the respective expiry months of the NIFTY options contracts.

3. Forward index level

The computation of the value of India VIX is carried out using Out-of-The-Money (OTM) option contracts, and these option contracts are identified using the forward index level. This forward index level is helpful in computing the At-The-Money (ATM) strike which assists in selecting those options which will be used for the computation of the value of the India VIX. The forward index level which is used is the latest available price of NIFTY futures contract for the respective expiry month.

4. Bid-Ask quotes

The At-The-Money (ATM) strike described above is the strike price of the NIFTY option contract available which is just below the forward index level. Out-of-the-money options are identified as NIFTY calls with their strike price just above the ATM strike and NIFTY puts with strike price below the ATM strike. The computation of the value of the India VIX is carried out using the best bid and ask quotes of these options contracts.

Once these quotes are identified, the variance, which is obtained after squaring the volatility is calculated separately for both, the near and mid-month.

Finally, the variance which was computed for both the near and mid-month expiry are interpolated to obtain a single value of variance having a constant maturity of 30 days to expiration. After this, the square root of the above obtained variance is calculated and multiplied by 100 to get to the value of India VIX.

VIX does the job of consolidating all the associated implied volatility values on various options on the NIFTY Index and gives a single number which represents the volatility of the overall market.

This is where a salient feature of the volatility index is highlighted. India VIX has a strongly negative correlation with the NIFTY index. Generally, India VIX ranges between the values of 15-35. During the initial phases of the COVID-19 pandemic, there was widespread turmoil and volatility in the stock markets all throughout the world, and as a result, India VIX had climbed up to its highest levels of 83 for that period of time. Once the markets corrected, the value of India VIX also stabilized.

India VIX is also colloquially known as the 'fear-index', the reason for which can be attributed to the expectations of volatility to rise and fall. But it should be noted that higher levels of India VIX is not necessarily associated with a bearish outlook, it is instead a metric which is used to perceive volatility levels in either directions, including both the upside and downside movements.

Volatility is one of the key components of option pricing, and is incorporated within the premium, which is the price one needs to pay to buy an option. If one were to expect the volatility of an index, which is the NIFTY index to increase or decrease, the option premium is also bound to increase or decrease. This is why option premiums can possibly be informative in understanding any expectations of any price action and future volatility.

Since VIX is a representation of the expectation whether the volatility will rise or fall, it means that if there is an underlying expectation of quite a bit of volatility in the market due to events like an economic recession for example, then the value of VIX will increase to higher levels. Conversely, if the market expects a relatively non-volatile atmosphere, then the values of VIX will potentially decrease.

VIX and options pricing

VIX is one of the most popular metrics for assessing the volatility of the markets, and volatility is also instrumental in determining the premiums of stock and index options. Therefore, VIX does have a considerable impact on options pricing. Typically, higher values of VIX translate to more expensive option premiums and comparatively lower values of VIX correspond to relatively cheaper option premiums.

The reason behind higher levels of volatility and consequently higher levels of VIX leading to higher option premiums is because the option writers are exposed to theoretically unlimited risk with a limited reward, which is the premium. This is why option writers charge a high premium during times of high volatility so as to minimize the associated risk.

VIX as a contrarian indicator

Since India VIX and the NIFTY index are inversely correlated with each other (fear-index), higher values of India VIX reflect increased levels of investor fear and uncertainty and lower values of India VIX suggest relative stability.

According to the contrarian methodology of investing, which is essentially the practice of investing against popular market sentiment, higher levels of India VIX potentially correspond to a suitable time to buy while lower levels of India VIX indicate that one should liquidate.

Higher levels of India VIX usually signal that the market sentiment is excessively bearish, and the implied volatility associated with the underlying has reached its maximum capacity. This is usually indicative of the fact that the market is likely to turn bullish.

Conversely, lower levels of India VIX signal that the market sentiment happens to be too bullish, and its likely that the implied volatility is bound to rise, thereby indicating that the market is possibly bound for a downturn.

Conclusion

India VIX, or the volatility index in general, is a useful tool for market participants to analyse the market movements and gauge the underlying sentiment around volatility and also act as a factor in making investment decisions.

Disclaimer: ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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what is volatility index how it impacts options pricing - icicidirect

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What is Volatility Index how it impacts Options pricing - ICICIdirect

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India VIX, which is the acronym for the India Volatility Index, is an implied volatility index representing the expectations of the market for the relative strength of any near-term price changes of the NIFTY Index options.

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What is Put Call Ratio & Learn How to Use it | ICICI Direct

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What is Put Call Ratio & Learn How to Use it | ICICI Direct

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Put Call ratio investigates the connection between the volume of call and put options traded in the market. Refer this article at ICICI Direct to know more about Put Call Ratio

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What Is Algo Trading: Meaning, Benefits, and Investment Process | ICICI Direct

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What Is Algo Trading: Meaning, Benefits, and Investment Process | ICICI Direct

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Algo trading is a method of trading in which important deals are found and executed in the market using coded programs. Visit now at ICICI Direct to know more about Algo trading

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The financial industry has undergone a change, thanks to technology. One of these technological changes, algorithmic trading or algo trading, has armed traders with new skills that provide them a competitive edge. Here is what algo trading means and the pros and cons it entails.

What Is Algo Trading?

Algo trading is a type of trading that involves locating and carrying out significant trades in the market using coded programmes. The computer uses the created code which can be based on price, time or any other factor, through a mathematical formula.

The Securities and Exchange Board of India (Sebi) first permitted algo trading in 2008. Back then, it was restricted to institutional investors such as mutual funds, hedge funds and insurance companies.

As it gained popularity, eventually retail traders also started using it. Many fintech and broker companies provide Application Programming Interfaces (APIs) that let customers create their own strategies or select from pre-existing ones. For example, one of the strategies could be "purchase 1 lakh shares when the 200 DMA (daily moving average) crosses the 14-day moving average" or "sell 100,000 shares if the 14-day moving average falls below the 200-day moving average".
The algorithm performs the deal without any assistance from a human once the conditions based on the code are satisfied. It is essential to get the code correct as algo trading works on that pre-decided formula on which the code is based.

How to Start Algo Trading?

Retail investors can start Algo trading by following these steps:

1. Understand The Market:

The first step in any type of trading is recognizing the market. Before you begin algo trading, gain a thorough understanding of the instrument or market in which you intend to trade so that you can develop a hypothesis and understand on which basis you have to trade.

2. Learn To Code:

Coding is one of the essential requirements in algo trading. If you don't have a coding background, you can learn some coding languages like Python and come up with an algorithm that works for you. Otherwise, you can hire professionals to write it for you.

3. Back-test Your Strategy:

You must test your algorithm before putting it into use. A run-through is a must. Test your plan with high-quality historical data from reliable sources. In order to verify that your algorithms are effective, you can also employ third-party back-testing tools. You can modify your code depending on whether or not they function.

4. Choose The Right Platform:

Your choice of broker and trading platform is as crucial as the quality of your code when it comes to trading. Select a broker that offers a variety of tools you may use to optimise your trading strategy and supports your algorithm.

5. Go Live:

The next step is to publish your algorithm once you are sure it works. Keep an eye on how it performs and observe how it functions on the market. It's possible that your algorithm won't always perform as you expect. Then, based on your requirements, you might need to start afresh or make modifications.

6. Keep Evolving:

You don't have to abandon algo trading if your initial strategy fails. Test various codes to see which ones are more effective.

Pros And Cons Of Algo Trading

Pros:

One of the biggest advantages of algo trading is its fast speed. It gives you quick trade results. It also eliminates human bias and reduces the number of trading errors. Even high-volume trades can be executed at fractional speed through this.

It is capable of seizing arbitrage chances successfully. While institutional investors frequently utilise algorithmic trading to increase returns, retail investors can use it to sharpen their trading strategies.

Cons:

Algo trading comes with huge risks. In a choppy market, it may result in significant loss. As most markets are interconnected and the effects of one market can be quickly transferred to others, it can also increase the systemic risk.

Don't forget to conduct your own thorough research, back-tests tactics, and then select the best code that meets your needs. There are tonnes of algo software available in the markets that you may buy if you don't have the time or expertise in coding.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code:-07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The non-broking products / services like Mutual Funds, PPF, SSY etc. are not exchange traded products / services and ICICI Securities Ltd. is merely acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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benefits and steps to invest - icicidirect

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What Is Algo Trading - Meaning, Benefits and Steps To Invest - ICICIdirect

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The financial industry has undergone a change, thanks to technology. One of these technological changes, algorithmic trading or algo trading, has armed traders with new skills that provide them a competitive edge. Here is what algo trading means and the pros and cons it entails.

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Lifestage Investments for Your Portfolio (LIFEY) | ICICI Direct

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Lifestage Investments for Your Portfolio (LIFEY) | ICICI Direct

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Lifey (Lifestage Investments for You) is a feature that allows you to set a life goal to achieve your dream of financial success and aids in portfolio building. Visit now at ICICI Direct to know more about LIFEY.

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Plan

Understand how much risk you can take, select a lifestage milestone and determine how much to invest

Invest

Build a custom investment plan using the recommended portfolio

Track

Monitor your target portfolio till you achieve. Check overall portfolio from time to time

Disclaimer

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. ( Member Code : 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Please note Brokerage would not exceed the SEBI prescribed limit.

Margin Trading is offered as subject to the provisions of SEBI Circular CIR/MRD/DP/54/2017 dated June 13, 2017 and the terms and conditions mentioned in rights and obligations statement issued by I-Sec.

Account would be open after all procedure relating to IPV and client due diligence is completed

TERMS AND CONDITIONS GOVERNING 'LIFEY - Lifestage investments for you'

These are the Terms and Conditions governing the 'LIFEY- Life stage investments for you'. The acceptance of these terms and conditions is a prerequisite for availing the said facility / product. We may update or amend these terms from time to time by posting such updates or amendments to the site. Your use of the site after we post any such updates or amendments will constitute your agreement to those updates or amendments. Please carefully read these terms before accessing or using any of the services. In case the same are not acceptable, please do not access or use this facility / product. The said terms and conditions would be applicable to all clients, individual / non-individual resident or no-resident.

Terms & Conditions

1. Clients hereby agrees that he is responsible to pay all charges, fees etc. as agreed between client and ICICI Securities Limited ("hereinafter referred to as I-Sec").​

2. Clients hereby agrees that the calculation and results displayed are based on information provided by client and is for assistance only and does not constitute an offer or solicitation. It is not intended to be and must not alone be taken as the basis for an investment decision. The client is advised to seek appropriate professional advice before acting on the basis of the above information.

3. Clients must note that the returns are only illustrative and they are not guaranteed. The returns do not indicate the upper or lower limits of the return that clients may get and the same is dependent on a number of factors including future performance. Neither I-Sec nor its employees, associate or group companies, its directors shall not be in any way responsible or liable for any loss or damage that may arise to any person from any inadvertent error in the information reported by the calculator.​

4. Clients understand that their financial situation is unique and products and services I-Sec reviews may not be right for your circumstances. Performance information may have changed since the time of publication. Past performance is not indicative of future results.​

5. In view of individual nature of tax consequences, each investor is advised to consult his/ her own professional tax advisor before taking any investment decision.

6. The calculators are based on assumed rate of returns and meant for illustration purposes only. Some of the features may or may not be currently available for investments. The calculators are designed to assist you to get a better understanding on how returns would have panned out in various scenarios. This calculator alone is not sufficient and shouldn't be used for the development or implementation of any investment strategy. The calculator uses information that is publicly available and information developed in-house. Information gathered and material used in this calculator is believed to be from reliable sources. However, I-Sec does not warrant the accuracy, reasonableness and/or completeness of any such information. The examples do not purport to represent the performance of any security or investments. It is neither an investment advice nor should it be construed as indicative of any of the schemes of any Asset Management Company. Invest as per your risk appetite and time horizon.

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19. It is explicitly stated herein that the Mutual Fund schemes offered online, have not been recommended by ICICI Securities Limited. I/We have understood the products suitable to me/us based on my/our risk profile and I/We acknowledge that ICICI Securities will not be held liable for any losses suffered by me/us. I/We hereby confirm that since this is an Execution Only transaction, Employee Unique Identity Number (EUIN) allotted to Sales employee by AMFI is not applicable. Please note that ICICI Securities also distributes Mutual Fund Schemes of ICICI Prudential Asset Management Company which is an ICICI Group Company. However, there exists no conflict of interest since the transactions are executed at Client's sole discretion.​

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I/we further acknowledge and confirm that I-Sec has provided the information pertaining to the above identified service only upon my/ our specifically requesting for the same.​

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LIFEY: Lifestage Investments for You to Build Portfolio - ICICI Direct

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Plan Understand how much risk you can take, select a lifestage milestone and determine how much to invest Invest Build a custom investment plan using the recommended portfolio Track Monitor your target portfolio till you achieve. Check overall portfolio from time to time ICICI Securities Ltd. ( I-Sec).

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Easy Options: Know about Options Trading Product for F&O Traders | ICICI Direct

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Easy Options: Know about Options Trading Product for F&O Traders | ICICI Direct

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Easy Options is a trading tool that enables F&O traders to quickly trade Nifty and Bank Nifty options. Visit now at ICICI Direct to know more about Easy Options

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Easy options is a trading product which allows F&O traders to trade Nifty and Bank Nifty Options in just a few clicks. You can buy Calls or Puts of highly liquid options of Nifty and Bank Nifty with Limited Risk as the loss is limited to the premium paid. Traders will be able to select strikes from recommended ATM, Near OTM and Far OTM strikes.

Salient Features of Easy Options

Easy Options

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Disclaimer - ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code: 07730), BSE Ltd (Member Code: 103) and Member of Multi Commodity Exchange of India Ltd.(Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. ICICI direct Markets App is offered by ICICI Securities. Features such as Payoff charts, are offered by ICICI Securities. Any complaint / dispute pertaining to the same would not have access to Exchange investor redressal or Arbitration mechanism.

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Easy Options - Options Trading Product for F&O Traders | ICICI Direct

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Easy options is a trading product which allows F&O traders to trade Nifty and Bank Nifty Options in just a few clicks. You can buy Calls or Puts of highly liquid options of Nifty and Bank Nifty with Limited Risk as the loss is limited to the premium paid.

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When Should You Not Invest in ELSS | ICICI Direct

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When Should You Not Invest in ELSS | ICICI Direct

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ELSS funds are essentially a type of equity-focused mutual fund. Refer to this article at ICICI Direct to know about when not to invest in ELSS Funds

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Introduction:

Say you aim for both tax saving and investment. Thus, when you heard about the ELSS mutual fund, you decided to invest, seeing the short lock-in period, tax deduction and good growth. But after one year, you compare to find the growth of your other mutual fund investment is more than the ELSS mutual fund. Both the mutual fund schemes had similar investments and carried almost equivalent risks. So, was the investment in ELSS wrong? Or was the time of investment in ELSS wrong? Let's understand exactly when is an ELSS suitable.

What is ELSS funds?

ELSS mutual fund comes as a combination of good returns and tax deductions. In a financial year, you can claim a deduction of up to Rs.150000 as per section 80C of the Income Tax Act. ELSS however has a lock-in period of three years. The gains you get after the tenure is treated as long-term capital gains and taxed accordingly. Minimum 80% of this equity-oriented mutual fund is invested in equity and equity-related instruments. You can invest in ELSS funds through lump-sum investment or Systematic Investment Plan (SIP).

As you may be aware, investment in mutual funds can be made anytime during the year. But, ELSS funds being one of the mutual fund schemes, does this apply to ELSS too? Let's understand.

Additional Read: ICICI Direct- Types of mutual fund investments

Can I invest in ELSS at any time?

While ELSS mutual fund is a great way to invest your money and claim the tax deduction, it isn't always the best option. Before investing in an ELSS fund, you should be aware of a few aspects of your investment behaviour, financial needs, and expected returns. As a result, there might be situations where skipping ELSS and opting for other tax-saving vehicles makes sense. Few such scenarios are:

1. When you prefer conservative investment style:

ELSS returns are subject to market risk and volatility that may cause fluctuations in the fund's Net Asset Value (NAV). If you're a cautious investor who prefers to keep your money safe, ELSS funds may not be the best option for you. However, if you can accept this short-term risk, ELSS is a fantastic tax-saving option for you.

2. When your investment horizon is not beyond five years:

Since equities are the underlying asset class in ELSS (with significant exposure to midcaps), it's recommended to hold an ELSS for at least five years if the fund is performing well. Allow your ELSS fund to develop at its own pace. If you expect to need the funds in the next five years, large-cap/hybrid funds are better than ELSS.

3. When you are sufficiently exposed to equities but not to debt:

If you have enough equities but not enough debt, skipping ELSS as part of your section 80 C investments is probably a good idea. In this case, you should avoid ELSS and instead use the 80C limit to invest in debt (PPF, NSC, etc.)

4. When the 80C limit is exhausted:

When investing in an ELSS mutual fund, you can claim a tax benefit of up to Rs.1,50,000 under section 80C. So, if you've already depleted your section 80C limit by investing Rs.1,50,000, it's preferable to divert other investments in non-ELSS mutual funds to avoid the three-year lock-in period.

5. When you already hold an ELSS mutual fund:

Many people invest in a different ELSS each year, assuming that it reduces the risk. In other words, if one ELSS fails, the other ELSS will cover. But most of the time, that may not be the best-case scenario. Unless the fund isn't performing as expected, it's better to stick with one ELSS and increase your investment there rather than switching every year.

Conclusion:

ELSS funds are a great way to save money on taxes while also investing in the stock market. However, because ELSS funds are equity funds, it may appear as you are losing money in the short term, so you shouldn't pick an ELSS fund solely for the tax benefit. If you need assistance with investment in an ELSS, talk to a financial advisor who would help you make an informed decision.

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

Please note that Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. I-Sec does not assure that the fund's objective will be achieved. Please note. NAV of the schemes may go up or down depending upon the factors and forces affecting the securities markets. Information mentioned herein is not necessarily indicative of future results and may not necessarily provide a basis for comparison with other investments. Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

The information provided is not intended to be used by investors as the sole basis for investment decisions, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific investor.The contents herein above shall not be considered as an invitation or persuasion to trade or invest. Investors should make independent judgment with regard suitability, profitability, and fitness of any product or service offered herein above. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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when you should not invest in elss funds - icicidirect

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When You Should Not Invest in ELSS Funds - ICICIdirect

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Say you aim for both tax saving and investment. Thus, when you heard about the ELSS mutual fund, you decided to invest, seeing the short lock-in period, tax deduction and good growth. But after one year, you compare to find the growth of your other mutual fund investment is more than the ELSS mutual fund.

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Benefits of Investing in Multi cap Funds in India | ICICI Direct

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Benefits of Investing in Multi cap Funds in India | ICICI Direct

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Multi-cap funds provide a better risk-return trade-off by protecting investors from the worst-case scenario while also providing positive returns. Visit ICICI Direct to learn more about the Benefits of Investing in Mid Cap Funds

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Introduction

Mutual funds have become popular investment tools for those who want to earn superior returns and diversify their portfolio. Indian investors are moving away from traditional investment avenues like fixed deposits and gold to explore mutual funds.

When it comes to making mutual fund investment decisions, there are various kinds available in the market that you can choose from depending on your risk profile, investment horizon and goals. Investors often find themselves stumped when deciding between large-cap, mid-cap, small-cap and sectoral funds.

Each of these mutual funds has its own benefits. While large-cap funds provide stability to your portfolio, mid-cap funds benefit you from their growth opportunities. Small-cap funds offer the possibility of higher returns but come with higher risk. Sectoral funds can help you take advantage of a boom in a particular sector.

One class of mutual funds that stand apart from all of these are multi-cap funds. These equity funds invest in companies of different market caps and sectors, thereby providing you with a slice of all the above categories. New investors often choose multi-cap funds to invest in because of the diversification benefits. Apart from that, they also provide better risk-adjusted returns and professional management.

If you are considering investing in multi-cap funds, then here are the advantages to look at.

Advantages of Multi-Cap Funds

The obvious advantage of multi-cap mutual funds is the diversification it provides. These funds invest in companies with varying market caps and sectors, thereby providing a natural diversification to your portfolio. You don't have to choose large-cap, mid-cap and small-cap companies yourself. The fund has exposure to them all.
2. Better Risk-Adjusted Returns
With the benefit of diversification comes the benefit of better risk management. For instance, if small-cap companies are not performing well during a period, fund managers can automatically shift focus to other companies such as large-cap companies to manage risk. Therefore, the risk-adjusted returns in multi-cap funds are better than in single-cap funds.
3. Professional Management
Multi-cap mutual funds are highly dependent on their fund managers for their performance. This is because fund managers have to make decisions regarding allocation. An experienced fund manager will be able to take advantage of market conditions and optimise investments to provide the best returns possible.
4. Highly Liquid
Like all other mutual funds, multi-cap funds are highly liquid investments. These are open-ended equity schemes that can be sold at any time to recover your money. They have no lock-in period. If you need funds, you can sell them at any time.
5. Great for Wealth Creation
Historically, multi-cap funds have generated inflation-beating returns in the long run. For investors seeking to multiply their wealth, investing in multi-cap funds can be a great way to do that.
Additional Read: Difference between large cap, mid cap and multi cap mutual funds
What to Consider Before Investing in Multi-Cap Funds

Always consider your investment horizon before deciding to invest in a multi-cap fund. These are best suited for long-term investments.

Check the fund manager's history and vision to ensure it aligns with your investment objectives.

Be sure you have the risk appetite to stomach ups and downs in the market since these funds have exposure to equities.

Conclusion

Multi-cap mutual funds are equity funds that have exposure to different categories of company stocks. They have in-built diversification and provide risk-adjusted returns. If you are a first-time investor in mutual funds or want to diversify your portfolio, then multi-cap funds can be an excellent option to consider.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code:-07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. PFRDA registration numbers: POP no -05092018. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS, NPS and AIF products. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The non-broking products / services like NPS etc. are not exchange traded products / services and all disputes with respect to the same would not have access to Exchange investor redressal or Arbitration mechanism.

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benefits of investing in multi cap funds - icicidirect

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Benefits of Investing in Multi cap Funds - ICICIdirect

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Mutual funds have become popular investment tools for those who want to earn superior returns and diversify their portfolio. Indian investors are moving away from traditional investment avenues like fixed deposits and gold to explore mutual funds.

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Mid Cap Mutual Funds: Know the Features and Advantages | ICICI Direct

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Mid Cap Mutual Funds: Know the Features and Advantages | ICICI Direct

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Mid cap funds are equity-oriented mutual funds that invest in businesses with midmarket capitalizations. Visit now at ICICI Direct to know more about Mid Cap Mutual Funds

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Introduction

When it comes to investing in mutual funds, knowledge is everything. Knowing what kind of mutual fund you are investing in gives you a clear picture of the growth or returns to expect. For instance, understanding the type of market capitalisation of the companies in a fund can give you a peek into the investment risks and subsequent returns.

There are four kinds of mutual funds depending upon the market capitalisation of the companies they invest in:

· Large-cap funds

· Mid-cap funds

· Small-cap funds

· Multi cap funds

This article will explore what mid-cap funds are, their features, and the advantages of investing in them.
Additional Read: 7 Reasons to Invest in Mutual Funds
What Are Mid Cap Mutual Funds?

The Securities and Exchange Board of India has categorised companies into different buckets depending upon their market capitalisation. The first 100 companies with the largest market cap are called large-cap companies. Companies ranging from 101 to 250 in terms of their market cap size are mid-cap companies. The rest are small-cap companies.

Mid-cap growth funds are equity mutual funds that invest at least 65% of their funds in mid-cap stocks.
1. Competitive Performance
Features of Mid Cap Growth Funds
2. Risk Factor
Mid-cap funds invest in mid-cap company stocks. These companies have the potential to grow and can be bumped up to large-cap companies if they perform well enough. They have immense growth potential and provide competitive returns, reflected in the fund's performance.
3. Returns
Mid-cap growth funds are riskier than large-cap funds because they have companies still in the growth stage. Not all mid-cap companies grow to become large-cap companies. Some may not deliver the desired returns. On the other hand, they are less riskier than small-cap companies.
4. Suitable for Long-Term Investors
Given their growth potential and risk factor, mid-cap companies provide better returns than large-cap companies in the long run. This reflects in the performance of mid-cap growth funds as well.

Mid-cap growth funds are most suited for long-term investment because they perform better over the long run. This is because the true growth potential of the companies that these funds invest in is only realisable in the long run.

Advantages of Mid Cap Growth Funds

Mid-cap funds have good growth potential in the long term. For investors who make investments in these mutual funds for a long term horizon, the possibility of making handsome returns is high. This, in turn, provides the opportunity for long term wealth creation.
3. Liquid Funds
Mid-cap funds invest in a variety of mid-cap companies spanning across different sectors. This ensures that your investment is well-diversified across various industries in the country.
4. Professional Management
These funds are open-ended equity mutual funds that can be liquidated at any time. They do not have a lock-in period unless they are Equity Linked Savings Schemes. You can sell the units in these funds at any time in case you need money.
Additional Read: A Guide to Selecting the Best Mid-cap Fund
You can benefit from the professional management of mid-cap funds. Only experienced and knowledgeable fund managers helm mid-cap funds, which can be advantageous to you in terms of your returns.

Conclusion

Investors with a medium risk appetite and seeking high returns can turn to mid-cap growth funds for investment. They provide higher returns than large-cap funds and are well-diversified across different sectors. If you want to invest in mid-cap funds, check out the offer documents at your preferred AMC or broker and make your investment now.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. Please note, IPO related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. ICICI Securities is also a BRLM to the issue. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing.

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mid cap mutual funds - features and advantages - icicidirect

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Mid Cap Mutual Funds - Features and Advantages - ICICIdirect

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When it comes to investing in mutual funds, knowledge is everything. Knowing what kind of mutual fund you are investing in gives you a clear picture of the growth or returns to expect. For instance, understanding the type of market capitalisation of the companies in a fund can give you a peek into the investment risks and subsequent returns.

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Investing for goals using mutual funds in India | ICICI Direct

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Investing for goals using mutual funds in India | ICICI Direct

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Investing in mutual funds can be an effortless way of achieving this goal when you invest in mutual funds every month. Visit ICICI Direct to know more

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Introduction

Each of us is unique. We have different needs and goals in life. Some of us can ride along swinging markets, while some may need a relatively conservative investment tool. Our life goals depend on the phase of our life and the kind of person we are. If you have just passed out of college, you would probably try to clear off your education loan or buy your first car. Likewise, if you are newly married, you may want to buy a dream house or plan a luxurious vacation with your spouse. A couple of years and kids into your marriage, your objective may be quality education for your kids and so on.

All these goals may seem distant at the start, but they can be achieved if you make proper arrangements for a steady stream of funds to pay for these goals. Once you start earning money, planning to save a portion of your income and investing it correctly is the most logical thing to do. It is the only way to create enough wealth for accomplishing all your goals. However, the challenge is to find the 'correct' investment tool that is dynamic and will generate returns to satisfy every goal. A mutual fund is the ultimate answer to this challenge.

Additional Read: 7 reasons to invest in Mutual Funds

A Mutual Fund is a shoe that fits every size

Mutual funds are an investment vehicle through which you can invest in multiple types of assets. Its versatility is one of its biggest attributes. You will find mutual funds available in different categories and schemes based on the composition of their underlying assets. These asset classes include equities, commodities, debt instruments, money market instruments, etc. Each asset class has unique features, varying risk levels, and the potential to deliver returns of a certain calibre. Hence, you must invest your money in a scheme after thoroughly understanding its portfolio and investment objective. Moreover, you will also find that mutual fund schemes are classified into several types based on their asset class and investment style suited for investors having different time horizons and risk appetites. Thus, the risk appetite and time horizon after which you need the funds should also be considered while picking a scheme.

Additional Read: Here are the Types of Mutual Funds That You Need to Know

The idea is to identify and invest in a mutual fund scheme that will be most suitable for your investment goal concerning risks, returns, and time frame. For instance, let us assume you are investing to buy a house 10 years down the line. To work towards this goal, you need to take a home loan and create a big enough corpus that can be paid as a down payment. Here, returns from an equity growth fund can help with the down payment. Typically, equity growth funds are aligned toward capital appreciation. They are long-term funds that majorly invest in equities and hence, carry a fair share of risk.

Additional Read: What Are Fixed Income Mutual Funds?

If a majority of your investments lie in equity and you need steady returns, investments in debt funds are a good hack to diversify the risks related to your Equity Funds. Let us assume you are nearing retirement with big booty of savings, but have not made provisions for any regular income source once you retire to take care of your routine expenses. In such a case, opting for a scheme that has a dominant debt portfolio will be ideal for you. It is relatively less volatile and has the potential to give you a regular fixed income.

Mutual funds also have schemes to help you make your earnings more tax-efficient. This is especially a concern for all. Equity-Linked Savings Schemes are a great choice for you if you want capital appreciation along with tax deductions. However, you may enjoy the best returns here if your money is parked here for long. It is not rare for business owners to have some surplus lying in their bank account for a short while before it needs to be rolled out for business. You may want to multiply this excess amount before a financial obligation arises. In such cases, debt-based funds such as ultra-short-term funds, liquid funds, overnight funds, etc. can help in keeping your money secure while growing it.

You may be a newbie in stock markets with little or no time to track and study markets. You only periodically check the growth reflected by benchmark market indices, such as BSE's Sensex, NIFTY, etc. Now, if you aim to gather returns in line with these market indices, a passive fund, such as an Index Fund is a great pick for you. The portfolio of such funds matches that of the market index and hence, they offer returns in line with it.

Something for Everyone

Mutual funds are an effective tool that appeals to everyone. You will find hundreds of variants in mutual funds created to suit varying investor risk-return profiles. Different schemes are made to match different goals. There is no investment goal that a mutual fund cannot help you in achieving. Let your investment objective dictate the scheme you should invest in. However, what if you do not have a goal before beginning any investment? Well, you can start an investment in mutual funds even without a clear goal. Investments in equity based growth funds are the best in such scenarios when you do not have any upcoming liquidity needs. It will serve as a provision if some financial obligation arises.
Additional Read: How to Use Mutual Fund Investment for Financial Planning
Conclusion

At times, the widespread offering of mutual funds may confuse you. Study the scheme's performance record, its expenses ratio, and most importantly, its portfolio and investment objective to filter your scheme. If the confusion persists, do not refrain from consulting a mutual fund expert for correct guidance.

Disclaimer:- ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Composite Corporate Agent License No.CA0113, AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. We act as a Syndicate, Sub -syndicate member for IPO, FPO. Please note that Mutual Fund Investments are subject to market risks, read the scheme related documents carefully before investing for full understanding and detail. . ICICI Securities Ltd. acts as a referral agent to ICICI Bank Ltd., ICICI Home Finance Company Limited and various other banks / NBFC for personal finance, housing related services etc. & the loan facility is subjective to fulfilment of eligibility criteria, terms and conditions etc. NPS is a defined contribution plan and the benefits would depend upon the amounts of contributions invested and the investment growth up to the point of exit from NPS. Insurance is the subject matter of solicitation. ICICI Securities Ltd. does not underwrite the risk or act as an insurer. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.
The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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how to invest in your every goal with mutual funds? - icicidirect

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How to Invest in your Every Goal with Mutual Funds? - ICICIdirect

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Each of us is unique. We have different needs and goals in life. Some of us can ride along swinging markets, while some may need a relatively conservative investment tool. Our life goals depend on the phase of our life and the kind of person we are.

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SIP Calculator: Systematic Investment Plan Calculator Online | ICICI Direct

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SIP Calculator: Systematic Investment Plan Calculator Online | ICICI Direct

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A SIP calculator is a tool that aids in calculating the returns available when placing your money in such investment vehicles. Visit ICICI Direct to know more about Systematic Investment Plan

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ICICI Direct - Online Stock Trading In India at Low Brokerage

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ICICIdirect is amongst India's largest retail broker and financial product distributor, trusted by ~80 lac customers with a track record of over two decades of service. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading.

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Know the Difference Between ESG and SRI Investing | ICICI Direct

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Know the Difference Between ESG and SRI Investing | ICICI Direct

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If you invest in a fund that exclusively buys companies with green practices, is socially responsible, and has strong governance principles. Visit now at ICICI direct to know more about the difference Between ESG and SRI investing

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Introduction

A new class of investors emerging in the 21st century want their money to do more than simply multiply. The younger generation, especially millennials, put their money where their mouth is. Millennials seek out investments that make the world a better place, choosing sustainable and ethical companies over companies that just churn out profit.

According to an Ernst & Young research report, investors aged 20-39 are almost twice likely to invest in companies or funds that have a positive environment or social impact.

This trend has given rise to value investing-if you tend to scrutinise companies and check if their values align with your own personal values, you are a value investor. This could entail investing in companies with a strong environmental impact, good labour practices, LGBTQ inclusion, equal representation on the board, etc.

The two most popular forms of value investing are environment, social, and governance investing (ESG investing) and socially responsible investing (SRI investing).

Often, the two investment strategies tend to be confusing for the investors. While the overarching principle of ESG investing and SRI investing are the same, certain nuances set the two apart.

What is ESG investing?

Environment, social, and governance investing is a strategy to invest in companies that either reduce their negative impact on society, contribute to societal betterment or both. If you invest in a fund that exclusively buys companies with green practices, is socially responsible, and has strong governance principles, you are following ESG investing.

ESG investing is based on understanding the impact a company has on society. It involves asking a broad set of due diligence questions on how environmental, social, and governance factors are threaded into a company's overall performance and returns. For instance, investing in an oil and gas company that is working to reduce emissions, has robust safety practices, and gives back to the community will be considered ESG investing. However, a green technology company that has poor labour and governance practices may not make the cut for ESG investing.

What is SRI investing?

Socially responsible investing is an investment strategy that considers how your personal values align with a company's values. It works by exclusion rather than screening companies that have certain practices. For instance, you may refrain from investing in "sin companies" such as those that manufacture alcohol, tobacco, weapons, gambling, etc. You may also choose to not invest in fossil fuel companies altogether. SRI investing is one of the simplest and least expensive forms of value investing.

What's the difference between the two?

There is no denying that ESG investing and SRI investing are similar. These operate on an underlying framework of investing in companies that benefit society. Both are forms of value investing.

However, ESG investing considers how companies are positively or negatively impacting the society. It does not discount a particular company by industry or sector, instead focusing on the overall impact it has on society.

On the other hand, SRI investing considers only those companies, mutual funds or ETFs that invest in companies aligning with your own moral values. It works by exclusion. The main difference here is that SRI investing emphasises not taking advantage of investments that do not adhere to environmental, social, or governance factors.

Which investment strategy should you choose?

Choosing the right strategy for your investment portfolio comes down to understanding how you want to invest. Do you want to invest in companies that actively give back to society? Or do you have certain moral principles that you would not give up in your financial portfolio?

If you value the environment, social causes, and governance of a company, you should opt for ESG investing. If you have strong moral principles and don't mind forgoing the returns from particular investments, then SRI investing is the way for you.

Conclusion

Value investing, either through ESG investing or SRI investing, is a noble investment strategy to consider. However, before you invest, be careful to thoroughly analyse the fund or companies you choose to invest in. It might be prudent to get a financial advisor who is well-versed with value investing to help you.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code:-07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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difference between esg and sri investing - icicidirect

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Difference Between ESG and SRI Investing - ICICIdirect

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A new class of investors emerging in the 21st century want their money to do more than simply multiply. The younger generation, especially millennials, put their money where their mouth is. Millennials seek out investments that make the world a better place, choosing sustainable and ethical companies over companies that just churn out profit.

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How to Choose the Best SIP Plans | ICICI Direct

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How to Choose the Best SIP Plans | ICICI Direct

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Systematic Investment Plans, or SIPs, allow you to invest a certain amount of money in mutual fund schemes in a disciplined manner. Visit now at ICICI Direct to know more about SIP plans

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Introduction

Tiny droplets of water make up a mighty ocean. Similarly, one can create wealth by consistently making small investment decisions. Mutual funds are well-known to provide superior returns in the long run that can help in wealth creation. Not everyone has the financial bandwidth or prowess to invest large sums of money at once.

If you want to invest in mutual funds, consider using the Systematic Investment Plan (SIP) route. When you make SIP mutual fund investments, you invest a fixed sum regularly in a mutual fund of your choice. You choose an investment horizon that is comfortable for you to invest in. SIP investments help you develop a disciplined approach to investing while assisting you in building a corpus for the long term.
Additional read: Know How to Invest in SIP and its Importance
Why choose Systematic Investment Plans?

1. You don't need a lot of money to invest in Systematic Investment Plans. You can start a SIP with as little as Rs. 100 a month

2. You benefit from the power of compounding. The returns that you earn on your investment give you more returns

3. It is a way to develop a consistent and disciplined investment habit

4. SIPs are easy to invest in. You can automate your SIP investments every month

How to choose the right SIP mutual fund to invest in?

Choosing the right mutual fund to start your SIP investment takes some work. Follow these steps to identify the best SIP mutual fund for you:

1. Identify your goal

Before you select a mutual fund for making an investment, analyse your goals. Are you planning to save for a vacation, down payment of a house, or retirement? Depending on your goal, you should make an estimate of the money you would need to accomplish your goals. Then, you can draw a conclusion on your investment amount every month and the returns you can expect on the money invested.

2. Choose the kind of fund you want to invest in

SIP mutual funds can be equity funds, debt funds, multi-cap funds, and even liquid funds. Depending on your investment goal and investment horizon, you need to narrow down on the kind of fund you want to invest in. For instance, if you have a short-term goal, you may consider investing in a liquid or a debt fund. Equity mutual funds are better suited to long-term investments.

3. Compare different funds

Once you have decided the kind of fund you want to start a SIP, make a list of all the top contenders. Ensure that they meet your list of requirements. Compare their historical performance, fund objective, fund manager history, expense ratio, and other relevant parameters. This will help you find the best SIP mutual fund that matches your goals.

4. Consult your financial advisor
Additional read: Light Up your Portfolio with SIP
If you find it hard to decide which mutual fund you want to start a SIP with, talking to your financial advisor could be helpful. The financial advisor will analyse and help you identify a mutual fund that will work for you.

Conclusion

Systematic Investment Plans can be a great way to save for the future. These plans help you inculcate a disciplined investment habit. However, like any other investment, choosing the right SIP mutual fund should involve a lot of research. Understand your own needs and go for the one which is best suited for you.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Composite Corporate Agent License No.CA0113, AMFI Regn. No.: ARN-0845. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. Please note that Mutual Fund Investments are subject to market risks, read the scheme related documents carefully before investing for full understanding and detail. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is merely acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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how to choose the best sip investment? - icicidirect

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How to choose the best SIP investment? - ICICIdirect

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Tiny droplets of water make up a mighty ocean. Similarly, one can create wealth by consistently making small investment decisions. Mutual funds are well-known to provide superior returns in the long run that can help in wealth creation. Not everyone has the financial bandwidth or prowess to invest large sums of money at once.

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Future & Options Online Trading In India

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Future & Options Online Trading In India

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| The best and most affordable stock brokerage Charges are provided by ICICIdirect for futures and options, commodity trading, equity, and mutual funds.

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Outlook Money Awards

Best Retail Broker of the year 2018,'16,'15
Best e-Brokerage house of the year 2014,'13,'12,'11,'09,'07

UTI CNBC TV 18 Financial Advisory Award

Best Performing National Financial Advisor Equity Broker 2018,'17,'15

D&B Equity Broking Awards

^The Largest Equity e-Broking House and The Best Equity Broking House in the Cash Segment 2015,'14,'13,'12

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Future & Options Trading In India - ICICIdirect

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Outlook Money Awards Best Retail Broker of the year 2018,'16,'15 Best e-Brokerage house of the year 2014,'13,'12,'11,'09,'07 UTI CNBC TV 18 Financial Advisory Award Best Performing National Financial Advisor Equity Broker 2018,'17,'15 D&B Equity Broking Awards ^The Largest Equity e-Broking House and The Best Equity Broking House in the Cash Segment 2015,'14,'13,'12

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Lowest Stock Brokerage Charges for Share Trading in India | ICICI Direct

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Lowest Stock Brokerage Charges for Share Trading in India | ICICI Direct

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| The best and most affordable stock brokerage Charges are provided by ICICIdirect for futures and options, commodity trading, equity, and mutual funds.

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Lowest Stock Brokerage Charges for Share Trading - ICICIdirect

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ICICIdirect offers the best and cheapest stock brokerage rates for futures and options, commodity trading, equity and mutual funds. Click here to know the brokerage plans.

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Hassle Free Opening a Trading Account Online | ICICI Direct

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Hassle Free Opening a Trading Account Online | ICICI Direct

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| Open trading account online with ICICIdirect and explore the best brokerage plan and enjoy the hassle free trading. Visit now to know more about opening a Trading Account Hassle Free

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Open Free Demat Account Online with ICICIDIRECT

Sign up for a New Account

What is a Trading account?

If you want to trade in equities, exchange-traded mutual funds, bonds or other securities, you need to have a trading account. It is your first step in the wonderland of investments.

A trading account is needed to buy or sell shares, bonds or other securities. Before online trading accounts, the stock exchange had an open outcry system where traders would bid for shares on the stock market floor or a trading ring. Today, you can simply open a demat and trading account and place your orders without having to be physically present at a stock market.

₹20

Intraday Trading Brokerage Charges (Unlimited per order)

30 mins

Sell stocks and get money within 30 mins

8.9% P.A.

Margin Funding interest rate to buy stocks

₹0

Futures trading Charges

01

₹20

Options & Intraday trading (Unlimited per order)

02

₹20

Commodity & Currency Derivative (Unlimited per order)

03

Trading Account Fees & Charges

Here is a list of trading account charges you need to be familiar with:

1. Account opening charges:
Discount brokers, traditional or full-service brokers, typically have higher overhead costs. Therefore, they may levy a charge for opening a trading account online. However, if you open an account with ICICIdirect, there are no charges to open a trading account.

2. Annual maintenance charges:
Many brokerages charge an annual maintenance fee to keep your account active and ensure consistent service delivery. Some brokerages build this into the account opening charge.

3. Transaction fees:
For every trade that you make, brokerages will levy a fee. These transaction charges depend upon the trade's value and the transaction's volume.

4. Custodian fees:
You will also have to pay custodian fees on your trading account for the brokerage to keep your assets safe.

5. Dematerialization fees:
If you hold any securities in the physical form and want to convert them to the digital format, you will need to pay a nominal dematerialization fee.

Trading Account Benefits

Documents required for opening a trading account online

You will require certain documents to open a trading account. While different brokerages might have different requirements, these are what you need to open a trading account with ICICI Direct:

1. PAN Card

The applicant must submit an image of the PAN Card issued by the Government of India. The photo and signature on the PAN should be visible.

2. Signature

Click a picture of your signature on white paper and upload the file. The signature must be the same as on PAN Card.

3. Bank proof

Submit an image of the cancelled cheque, bank passbook, or bank statement for a corresponding bank account.

4. Financial document

The applicant must provide proof of income with a bank account statement for the past six months, net-worth certificate, salary slips, form 16, Demat account holding, or a copy of Income Tax Return submitted to the Income Tax Department

Articles

Option positioning on weekly expiry day

The Nifty started the current week on a dismal note but witnessed a V-shaped recovery and moved above 17400 levels. However, no reversal in the volatility index, which is still at elevated levels and sustaining above 21%, is a worrying sign. FIIs have continued to remain negative in the cash segment for a few weeks now. Since, today is the weekly settlement, we have seen sharp swings on both sides

Read more

FAQ

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. AMFI Regn. No.: ARN-0845. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investments in securities market are subject to market risks, read all the related documents carefully before investing. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents are solely for informational and educational purpose.

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Open Free Demat Account Online with ICICIDIRECT Sign up for a New Account What is a Trading account? If you want to trade in equities, exchange-traded mutual funds, bonds or other securities, you need to have a trading account. It is your first step in the wonderland of investments.

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| A Demat Account enables the electronic transaction of shares and securities to be bought and sold through the process of Dematerialisation. Visit now at ICICI Direct to get the benefit of opening a Free Demat account

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Open Demat Account Online | Free Demat Account | ICICI Direct

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Here is a step-by-step guide on How to Open Demat Account with ICICI Direct

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Why Invest in Global Markets in India | ICICI Direct

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Why Invest in Global Markets in India | ICICI Direct

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| Invest in global market and indices directly with ICICIdirect and give your portfolio the ultimate flexibility with diversification. Visit now to know more

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Interactive Brokers LLC is the broker that executes and clears your trades, ICICI Securities is an introducing broker to Interactive Brokers.
Interactive Brokers is a US based brokerage firm with USD 8.1 billion in equity capital as of June 2020. The company is listed on the NASDAQ. As of June 2020, Interactive Brokers has over USD 203 billion in client equity.

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Interactive Brokers LLC is the broker that executes and clears your trades, ICICI Securities is an introducing broker to Interactive Brokers. Interactive Brokers is a US based brokerage firm with USD 8.1 billion in equity capital as of June 2020. The company is listed on the NASDAQ.

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Wealth Management Services in India | ICICI Direct

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Wealth Management Services in India | ICICI Direct

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| ICICI Bank provides a comprehensive suite of Wealth Management Services in India. Visit now to know more about Wealth Management Services to know more.

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iLearn: Your One Stop For All Articles & Blogs Related To The Share Market | ICICI Direct

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iLearn: Your One Stop For All Articles & Blogs Related To The Share Market | ICICI Direct

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| iLearn helps empower you with the power of knowledge to start your investment journey in the stock market. Visit now at ICICI Direct to know more about ilearn

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iLearn - Your One Stop For All Share Market Related Blogs & Articles - ICICI Direct

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iLearn helps empower you with the power of knowledge to start your investment journey in the stock market. To Know more visit iLearn at ICICI Direct.

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Equity Research: Smooth equity trading analysis | ICICI Direct

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Equity Research: Smooth equity trading analysis | ICICI Direct

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| Equities Research by ICICI Direct offers equity trading and investment ideas, as well as real-time market comments and recent studies for study. Visit now to know more

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National Pension Scheme (NPS) in India | ICICI Direct 

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National Pension Scheme (NPS) in India | ICICI Direct 

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| National Pension System (NPS) is a voluntary, defined retirement savings system. Visit ICICI Direct to know more about NPS in India.

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ICICIdirect is amongst India's largest retail broker and financial product distributor, trusted by ~80 lac customers with a track record of over two decades of service. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading. ICICIdirect offers more than 50 products and services like Equity, Mutual Funds, Derivatives, Futures and Options Currency, Commodity, ETF, Insurance, IPOs, Corporate Fixed Deposits, Loans, NPS, Wealth Management, Corporate Services, NRI Services, Portfolio Management Services, Global Investment, Financial Learning, Tax Services etc. under one roof to help you to achieve your financial goals.

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Come and discover the world of trading and investing by opening ICICIdirect account today!

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ICICI Direct - Online Stock Trading In India at Low Brokerage

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ICICIdirect is amongst India's largest retail broker and financial product distributor, trusted by ~80 lac customers with a track record of over two decades of service. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading.

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Sovereign gold bond scheme 2022 | ICICI Direct

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Sovereign gold bond scheme 2022 | ICICI Direct

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| Sovereign Gold Bonds are the perfect alternative to investment in physical gold. Visit now at ICICI Direct to learn more about Sovereign Golds Bonds.

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Open Free Demat Account Online with ICICIDIRECT

Sign up for a New Account

Here's how Gold can enhance your portfolio

Long Term Performance of Gold

Source: ICICIdirect Research Report dated May'21

What are Sovereign Gold Bonds?

Sovereign Gold Bonds (SGBs) are the perfect alternative to investment in physical gold. With these bonds, you can enjoy capital appreciation and also earn interest every year. These bonds, issued by the Government of India, also eliminate several risks associated with physical gold.

Investors subscribe to SGBs during primary issuance by paying the ongoing price* of Gold. Upon allotment, these bonds are securely held in demat form eliminating risk and cost of storage. On Maturity, Investors receive redemption proceeds basis prevailing price* of Gold. Thus, SGBs offer Gold linked returns to investors. Over and above Gold returns, investors receive fixed interest of 2.50% p.a. on investment value.

Though the tenure of the bond is 8 years, each tranche is listed on stock exchange and Investors can liquidate** their holdings before maturity. However, if held to maturity, capital gains tax^ arising on redemption to an individual is exempted.

Tranche

Issue Price *

ISSUE OPENS

ISSUE CLOSES

SGB Scheme 2022-23 Series I

5,091 - 50 = 5,041

June 20, 2022

June 24, 2022

Why SGB is the best form of Gold Investment in India?

Tenor - 8 years. Exit Option after 5 th year

Minimum - 1 gm & Maximum - 4 kgs^^ per Financial Year

Comparing SGB with Gold ETF & Physical Gold

podcast

Research Outlook on Gold

Listen to our Podcast: Research Outlook on Gold - Add Glitter to your Investments!
Sachin Jain, Research Analyst, ICICI Securities

Video

Research Report

Product Presentation

FREQUENTLY ASKED QUESTIONS

The Bonds are issued in denominations of one gram of gold and in multiples thereof. Minimum investment in the bond shall be one gram with a maximum buying limit maximum limit of subscription shall be of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities per fiscal year as notified by the government from time to time provided that
a. annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the secondary market; and
b. the ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

On maturity, the redemption proceeds will be equivalent to the prevailing market value of grams of gold originally invested in Indian Rupees. The redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.
The option of taking the physical delivery of gold is not available in case of these bonds.

Premature redemption of these bonds is allowed only upon completion of 5 years from the date of allotment and this can be done only on the interest payment dates which is twice a year. Capital gains tax arising out of redemption of these bonds has been exempted which makes it a more lucrative investment opportunity from the longer term perspective when compared with other forms of gold.
However, in case if you wish to exit from these bonds before the completion of 5 years, you also have the option to trade these bonds in the secondary market. We understand that listed bonds at times have limited liquidity which may result in volatile prices. Hence, for the benefit of our customers we only allow limit orders to be placed. In case if these are traded in the secondary market upon completion of 3 years, capital gains arising would be taxed @20% with indexation benefit and in case if these are traded within 3 years the gains would be taxed at the marginal tax rate, which is the tax rate in which an investor falls.

* Nominal value of the Bonds shall be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last three business days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs. 50 per gram less than the nominal value to those investors applying online and the payment against the application is paid through digital mode.

^^ Annual investment limit of 4 kgs will include the SGBs purchased from the secondary market for Individuals & HUF; 20kgs for Trust and similar entities

^ Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961). TDS is not applicable on the bond. However, it is the responsibility of the bond holder to comply with the tax laws. The Capital gain tax arising on redemption of SGBs to an individual has been exempted if held till maturity. the indexation benefit will be provided to LTCG arising to any person on transfer of bonds.

** Subject to Liquidity.

# SGB have Zero cost of Purchase during Primary Issuances.

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Gold: Buy Sovereign Gold Bond (SGB) Schemes Online - ICICIdirect

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Invest in government undertaken Sovereign Gold Bond Scheme with ICICIdirect and enjoy hassle free investments at attractive interest rate with no risk & cost of storage.

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Loans Online: Apply for Instant Loans Online | ICICI Direct 

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Loans Online: Apply for Instant Loans Online | ICICI Direct 

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| ICICIdirect offers online loans with more favourable loan eligibility, cheaper EMI, and competitive interest rates. Visit now  and get the best Loans Online.

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ICICIdirect offers online loans at attractive interest rates with higher loan eligibility and lower EMI. Apply now to get quick approval for your loans.

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Insurance Online: best Insurance Plans in India | ICICI Direct 

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Insurance Online: best Insurance Plans in India | ICICI Direct 

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| Insurance Online:  Buy ICICI Direct Insurance online in India. It offers best  insurance plans and policies. Visit and get the best Insurance Online at ICICI Direct

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The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning, ESOP funding etc. are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.
Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge. Pay minimum 20% upfront margin of the transaction value to trade in cash market segment. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued vide NSE circular reference NSE/INSP/45191 dated July 31, 2020; BSE Notice no. 20200731-7 dated July 31, 2020 and NSE Circular Reference No. NSE/INSP/45534 dated August 31, 2020; BSE Notice No. 20200831-45 dated August 31, 2020 and other guidelines issued from time to time in this regard. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.

Disclaimer : ICICI Securities attempts to ensure the highest level of integrity, correctness and authenticity of the content and data updated on the site. However, we may have not reviewed all of the contents and data present on the site and are not responsible or we take no guarantees whatsoever as to its completeness, correctness or accuracy since these details are acquired from third party. In the event that any inaccuracy arises, we will not be liable for any loss or damage that arises from the usage of the content.

Name of Investment Adviser as registered with SEBI : ICICI Securities Limited
Type of Registration : Non Individual
Registration number : INA000000094
Validity of registration : Valid till suspended or cancelled by SEBI
Address : ICICI Securities Limted, Unit No. 101, Ackruti Trade Centre, Road No. 7, Midc, Andheri – East - 400093
Telephone numbers : 022- 4080393
Name of Principal Officer : Mr. Anupam Guha
Contact no : 022- 40840393
Email id : mfadvisory@icicisecurities.com
Corresponding SEBI regional / local office address : Securities & Exchange Board of India, Plot No.C4-A, 'G' Block Bandra-Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra

Attention Investors : Prevent unauthorized transactions in your account. Update your mobile numbers/email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile/email at the end of the day.... Issued in the interest of Investors (Ref NSE : Circular No.: NSE/INSP/27346, BSE : Notice 20140822-30.) It has been observed that certain fraudsters have been collecting data from various sources of investors who are trading in Exchanges and sending them bulk messages on the pretext of providing investment tips and luring the investors to invest in bogus entities by promising huge profits. You are advised not to trade on the basis of SMS tips and to take an informed investment decision based on authentic sources.... issued in the interest of investor of investor (RefNSE : circular No.: NSE/COMP/42549, BSE:Notice 20191018-7)

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Registered Office:
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Prabhadevi, Mumbai - 400 025, India
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For any queries or grievances: Mr. Rakesh Seth

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Name of Compliance Officer (Broking) : Mr Anoop Goyal E-mail Address : complianceofficer@icicisecurities.com / Tel (91 22) 4070 1000

Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Please note Brokerage would not exceed the SEBI prescribed limit.

Margin Trading is offered as subject to the provisions of SEBI Circular CIR/MRD/DP/54/2017 dated June 13, 2017 and the terms and conditions mentioned in rights and obligations statement issued by I-Sec.

Account would be open after all procedure relating to IPV and client due diligence is completed.

ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Mumbai - 400025, India, Tel No: 022 - 2288 2460, 022 - 2288 2470. Composite Corporate Agent License No.CA0113. Insurance is the subject matter of solicitation. ICICI Securities Ltd. does not underwrite the risk or act as an insurer. The advertisement contains only an indication of the cover offered. For more details on risk factors, terms, conditions and exclusions, please read the sales brochure carefully before concluding a sale.

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Buy insurance policy online with ICICIdirect, explore the range of insurance plans such as term plans, savings plans, wealth creation plans, health insurance, car insurance, etc. here.

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IPO Investment - Invest In IPO with ICICIdirect

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IPO Investment - Invest In IPO with ICICIdirect

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| An Initial Public Offering or IPO is when a corporation issues equity shares to the general public for purchase on the open market. Visit now at ICICI direct to know more

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An Intial Public Offering or IPO is when equity shares of a company are offered to the public on the open market i.e. the stock market for the first time.

The company going public raises capital and funds by trading IPO shares.

During the IPO trading, a fraction of shares are reserved for different type of investors including individual investors, Qualified Institutional Buyers and High Net worth Individuals. The IPO is either a Fixed Price Issue or Book Built Issue.

Upcoming / Recent IPO

Navi Technologies Ltd IPO

A technology-driven financial products and services company in India focusing on the digitally connected young middle-class population of India

Since the company’s incorporation, they have expanded offerings under the “Navi” brand to include personal loans, home loans, general insurance and mutual funds. (Source: Company DRHP)

As per the DRHP, the issue size is expected to be upto Rs. 3350 crores

Ethos Ltd IPO

India’s largest luxury and premium watch retail player (Source: Technopak Report) delivering a content led luxury retail experience to customers through online and physical presence

Enjoy a healthy market share of 20% in the luxury watch retail segment (Source: Company DRHP)

As per the RHP, the issue size is expected to be upto Rs. 472 crores

Aether Industries Ltd IPO

A speciality chemical manufacturer in India producing advanced intermediates and speciality chemicals involving complex and differentiated chemistry and technology core competencies (Source: DRHP)

The business started in 2013, with a vision to create a niche in the global chemical industry (Source: DRHP)

As per the RHP, the issue size is expected to be upto Rs. 808 crores

Paradeep Phosphates Ltd

Third largest private sector manufacturer of non-urea fertilizers in India

Primarily engaged in manufacturing, trading, distribution and sales of a variety of complex fertilizers

As per the DRHP, the offer consists of a Fresh Issue of Rs. 1255 crores, and an OFS of 12 crore equity shares

boAt (Imagine Marketing Ltd) IPO

A digital-first consumer products company and one of the largest Indian digital-first brands in terms of revenue from operations for the financial year 2021 (Source: Company DRHP, RedSeer Report)

Have an attractive offering of wide-ranging, high-quality and aspirational lifestyle-focused consumer products at accessible price points, under multiple brands

As per the DRHP, the issue size is expected to be upto Rs. 2000 crores

Droom Technology Ltd IPO

A technology and data science company that facilitates automobile buying and selling online

The automobile ecommerce platform, which includes website and mobile apps, offers users convenience and a curated experience

As per the DRHP, the issue consists of Fresh Issue of upto Rs. 2000 crores and an OFS of upto Rs. 1000 crores

Le Travenues Technology Ltd (ixigo) IPO

A technology company focused on empowering Indian travelers to plan, book and manage their trips across rail, air, buses and hotels

Assist travelers in making smarter travel decisions by leveraging AI, machine learning and data science led innovations on their OTA platforms, comprising websites and mobile applications (Source: Company DRHP)

As per the DRHP, the issue size is expected to be upto Rs. 1600 crores

Bikaji Foods International Ltd IPO

One of India’s largest FMCG brands with an international footprint, selling Indian snacks and sweets, and among the fastest growing companies in the Indian organised snacks market (Source: F&S Report, Company DRHP)

Product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks and other snacks which primarily includes gift packs (assortment), frozen food, mathri range and cookies

The issue size of the IPO is yet to be announced

Fabindia Ltd IPO

A consumer lifestyle platform with an established legacy focused on authentic, sustainable and Indian traditional lifestyle products (Source: Company DRHP)

he business model is focused on sustainability by design

As per the DRHP, the issue consists of Fresh Issue of upto Rs. 500 crores and an OFS of upto 25 million equity shares

One MobiKwik Systems Ltd

One of the largest mobile wallets (MobiKwik Wallet) and Buy Now Pay Later (BNPL) players in India based on mobile wallet GMV and BNPL GMV, respectively, in FY 2021 (Source: RedSeer Report and Company DRHP)

Technology-first company leveraging big data analytics and deep data science

As per the DRHP, the issue size is expected to be upto Rs. 1900 crores

Oravel Stays Ltd (Oyo)

The company is a leading, new-age technology platform empowering the large yet highly fragmented global hospitality ecosystem, according to RedSeer (Source: Company DRHP)

As at March 31, 2021, the company had 157,344 storefronts across more than 35 countries listed on their platform (Source: Company DRHP)

As per the DRHP, the issue size is expected to be upto Rs. 8430 crores

Go Airlines (India) Ltd

An ultra-low-cost carrier ("ULCC") and one of the fastest growing airlines in India (Source: Company DRHP)

Target customers are young Indians and MSME businesses, and the company believes the product and service offerings are uniquely attractive to these large and growing segments

As per the DRHP, the issue size is expected to be upto Rs. 3600 crores

Pharmeasy (API Holdings Ltd) IPO

India’s largest digital healthcare platform (based on GMV of products and services sold for the year ended March 31, 2021), according to RedSeer Report. (Source: Company DRHP)

The integrated, end-to-end business aims to provide solutions for consumers’ healthcare needs

As per the DRHP, the issue size is expected to be upto Rs. 6250 crores

Ebixcash Ltd IPO

A technology enabled provider of digital products and services in the B2C, B2B and financial technology arena (Source: Company DRHP)

Utilize a “Phygital” that combines over 650,000 physical agent distribution outlets

As per the DRHP, the issue size is expected to be upto Rs. 6000 crores

Snapdeal Ltd IPO

Founded in 2007, the business started as a coupon booklet business, which was transformed into an online deals platform in 2010 and an online eCommerce marketplace in 2012 (Source: Company DRHP)

Snapdeal’s value proposition meets the distinct buying needs of ‘Bharat’ shoppers. (Source: Company DRHP)

As per the DRHP, the issue consists of Fresh Issue of upto Rs. 1250 crores and an OFS of upto 30.76 million equity shares

Current IPOs

Upcoming IPO

Top Performing IPOs

CLOSED IPOs

DELISTED

BUYBACKS

RIGHTS

Steps to Apply

IPO NEWS

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IPO Investment - Invest In IPO Online With ICICIdirect

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IPO's helps you buy shares of the company going to the public for the first time. Now invest in IPO's online with ICICIdirect, check out all review & analysis of upcoming IPO.

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Commodity Market Live: Online Commodity Trading in India

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Commodity Market Live: Online Commodity Trading in India

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| Commodity Market Live: With ICICI Direct, you can easily access the most recent information on commodity market rates, pricing, and more.

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MCX

Low

50,750.00

High

50,857.00

Open

50,790.00

Close

50,824.00

Lots Size

100.0

GRMS

Vol (in lots)

529

Value (Lac)

2,687.29

Open Interest

2,350.00

Spot Price

51,317.00

OI Change

-3,111.00

OI Change %

-56.97

Rollover %

0.21

Commodity Brokerage Calculator

Brokerage Rs 20/- per order only

MCX - Commodity Futures

Total Trade Value 20,050,000

Brokerage 40

Exchange Transaction Charges 521.30

SEBI Charges 10.03

GST 102.84

CTT 1005.00

Stamp Duty 200

Total Expense & Taxes 1879.16

Per Lot Expense 939.58

Rs. to Break Even 9.40

Net Profit / Loss 24036.82

MCX - Commodity Options

Total Trade Value 1,537,500

Brokerage 40

Exchange Transaction Charges 39.98

SEBI Charges 0.77

GST 14.53

CTT 157.50

Stamp Duty 30

Total Expense & Taxes 282.78

Per Lot Expense 282.78

Rs. to Break Even 5.66

Net Profit / Loss 74717.22

market statistics

TOP GAINERS

top losers

Commodity | Exp Date | LTP () | CHG () | CHG (%)

Commodity | Exp Date | LTP () | CHG () | CHG (%)

ACTIVE BY VALUE

ACTIVE BY VOLUME

Commodity | Exp Date | LTP () | Value (Cr) | CHG (%)

Commodity | Exp Date | LTP () | Volume | CHG (%)

Event Calendar

commodities market news

COMEX Gold Sees Modest Gains

COMEX Gold futures stayed mostly supported in a tiny range amid steady buying support as a......

Jun 27, 2022 12:38

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Foreign Exchange Market: Online Currency Trading | ICICI Direct 

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Foreign Exchange Market: Online Currency Trading | ICICI Direct 

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| ICICI Direct offers a user-friendly online trading and exchange platform. Visit now to know more about Foreign Exchnage market live updates.

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Prev. Close

79.0900

Open

79.0050

Best Buy Qty

135

Best Buy Qty Pr.

79.0900

Best Sell Qty

38

Best Sell Qty Pr.

79.0950

Spot Price

78.63

OI

130,987.00

OI Change %

-

Rollover %

0.81

MCap.(Cr.) | : | 42,133
BV | : | 42,133
PE (x) | : | 42,133
Div. Yield (%) | : | 42,133
EPS | : | 42,133
FV | : | 42,133

Currency Brokerage Calculator

Brokerage @ Rs 20/- per order only

NSE - Futures

Total Trade Value 20,050,000

Brokerage 40

Exchange Transaction Charges 521.30

SEBI Charges 10.03

GST 102.84

Stamp Duty 200

Total Expense & Taxes 1879.16

Per Lot Expense 939.58

Rs. to Break Even 9.40

Ticks to Break Even 1879.16

Net Profit / Loss 24036.82

NSE - Options

Total Trade Value 20,050,000

Brokerage 40

Exchange Transaction Charges 521.30

SEBI Charges 10.03

GST 102.84

Stamp Duty 200

Total Expense & Taxes 1879.16

Per Lot Expense 939.58

Rs. to Break Even 9.40

Ticks to Break Even 1879.16

Net Profit / Loss 24036.82

Most Traded Contracts

open interest (OPTIONS)

Name | Strike Price() | Curr. Price() | CHG() | OI | Chg in OI('000)
USDINR-PE-01-JUL-2022 | 78.5000 | 0.0125 | -0.0050 | 353,318.00 | -22,363.00
USDINR-PE-01-JUL-2022 | 78.2500 | 0.0025 | -0.0050 | 274,513.00 | -15,689.00
USDINR-CE-01-JUL-2022 | 79.0000 | 0.0900 | -0.0250 | 265,348.00 | 46,858.00
USDINR-PE-01-JUL-2022 | 78.7500 | 0.0400 | -0.0150 | 250,740.00 | 74,598.00
USDINR-CE-01-JUL-2022 | 78.5000 | 0.4500 | -0.0075 | 195,030.00 | -11,560.00

open interest (FUTURE)

Currency Calendar

Currency Market News

Rupee Depltes further

Rupee closed wekaer at 78.7175/7200 per Dollar on Tuesday (28 June 2022), versus its previ...

Jun 28, 2022 17:33

Rupee dips

Rupee closed lower at 78.4300/4400 per Dollar on Monday (27 June 2022), versus its previou...

Jun 27, 2022 17:36

Rupee edges up

Rupee closed higher at 78.3300/3350 per Dollar on Friday (24 June 2022), versus its previo...

Jun 24, 2022 17:34

Rupee sags

Rupee closed lower at 78.3575/3600 per Dollar on Thursday (23 June 2022), versus its previ...

Jun 23, 2022 17:30

Rupee worsens

Rupee closed lower at 78.3500/3625 per Doillar on Wednesday (22 June 2022), versus its pre...

Jun 22, 2022 17:21

Rupee dips

Rupee closed lower at 78.1500/1600 per Dollar on Tuesday (21 June 2022), versus its previo...

Jun 21, 2022 17:35

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Trade and exchange Currency with ICICI Direct's simplified online platform. Start forex trading in India & invest in Currency futures today & get additional benefits worth ₹7,099*

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Derivatives Trading: Futures & Options Online Trading | ICICI Direct

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Derivatives Trading: Futures & Options Online Trading | ICICI Direct

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| Start Trading in Futures and Options Online with ICICI Direct and receive the most recent F&O Trading news. Visit now to know more.

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Why choose ICICIdirect for F&O Trading?

ICICIdirect provides best in class features and tools for seamless trading in futures & options for all customers. View the reasons to trade with us:

Best in Class Platforms

Our new Markets Mobile App has the next-gen technology and capabilities such as live technical charts, OI graphs on the Option Chain, Biometrics based login and much more. Trade Racer is our proprietary desktop program for integrated trading with multiple watchlists and live prices.

Bonus in Indian Oil Corporation: Implications on your F&O positions.

Indian Oil Limited has fixed a Record Date of July 1st, 2022 for the purpose of bonus shares in the ratio 1:2 i.e. One new bonus equity share of Rs. 10/- each for every Two existing equity shares of Rs. 10/- each fully paid up. The ex-date being June 30, 2021.

What is Expiry day in F&O and how to trade on Expiry day?

An expiry day in the stock market indicates the end of an asset or contract. For derivatives trading in the futures & options market, the expiry date signals the last date of the contract, after which the contract is not valid. The expiry date impacts the Indian stock market, and traders must understand its repercussions to make the right trading decisions.

How can you hedge your positions in Futures and Options?

Hedging is one of the most crucial and useful applications of Futures and Options. It protects your trading positions from making losses in the event of adverse market movements. To hedge your positions in the Futures market, you can buy Put Options against your Buy trades and vice-versa.

Watch Our Video to Know More

Options are derivative contracts between two parties where the buyer has the right but no obligation to buy or sell the underlying asset at a specific price on a specified day in the future. The seller, however, has an obligation to execute the contract should the buyer choose to exercise their right.

The price at which the contract is entered is called the strike price. The buyer also pays a premium to the seller to buy the right to exercise the contract if the market conditions are favourable. This is the compensation paid to the seller to assume the risk of the contract. Another concept to know about in Options trading is the lot size. Every contract has a fixed number of underlying asset units in it. Options are traded based on their lot size.

Futures are derivative contracts created on an underlying asset at a specific price on a specified future date. Both the buyer and seller have to honour the contract on expiration. On the other hand, options give the buyer the right, but not the obligation, to buy or sell a certain underlying at a specific price on a specified date in future. The buyer can choose whether or not they want to exercise the right. The seller has an obligation to honor the contract. This is the primary difference between the two derivatives.

Additionally, futures require a higher margin requirement than options. The risks of trading in futures is also higher than options because of the unlimited losses they are exposed to.

The biggest advantages of futures contracts are:

They are standardized contracts that are traded on exchanges.

Due to this, they have high liquidity.

They have stable margin requirements that are known in advance.

When it comes to options, the value of the contract declines over time. This is called the time decay of money. Since futures contracts are fixed in advance, there is no time decay to worry about.

Futures can be used to hedge against price risks.

Futures contracts are standardized derivatives contracts that can be traded on exchanges.

They are available on several underlying assets such as stocks, indices, commodities, currencies, fixed income instruments, etc.

You need to deposit a margin amount to trade in futures.

Futures contracts have high liquidity.

They can be used to hedge against price risks.

Options trading works just like stocks trading does. Options contracts can be bought and sold on exchanges. There are four positions you can take with options:

Buy call options

Sell call options

Buy put options

Sell put options

Call and put buyers have the right but not the obligation to buy or sell the underlying. The risks of buying call and put options are limited to the premium paid. However, call and put sellers have an obligation to honour the contract. The premium is the compensation they get for assuming the risk

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Futures And Options Online Trading - Derivative Markets - ICICI Direct

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ICICIdirect provides best in class features and tools for seamless trading in futures & options for all customers. View the reasons to trade with us: Our new Markets Mobile App has the next-gen technology and capabilities such as live technical charts, OI graphs on the Option Chain, Biometrics based login and much more.

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Exchange Traded Funds: Invest in ETF Online in India | ICICI Direct  

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Exchange Traded Funds: Invest in ETF Online in India | ICICI Direct  

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| ETF: Invest in Exchange Traded Funds with ICICI Direct using research-based ETF portfolios. Visit now at to know more about Exchange Traded Funds

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Multicap Beater

Basket of ETFs that collectively target delivering higher returns than Multi-cap Mutual Funds Schemes in most cost efficient manner

Large-cap Beater

Basket of ETFs that collectively target delivering higher returns than Large-cap Mutual Funds Schemes in most cost efficient manner

Mangal_Arambh

For an Auspicious start to your investment journey, the portfolio provides exposure to top notch companies and Gold at the same time

In India we have 5 types of ETFs- Equity, Debt, Gold, Global and Smart beta.

* Equity ETFs are passive investment instruments that are based on indices and invest in securities in same proportion as the underlying index
* Debt ETFs like equity ETFs, Debt ETFs offer exposure to a basket of securities that, in this case, is a basket of bonds and other debt products.
* Gold ETFs are instruments that are based on gold prices and invest in gold bullion. Because of its direct gold pricing, there is a complete transparency on the holdings of an ETF.
* Global ETFs invests mainly in foreign based securities. These ETFs may track global markets or track a country-specific benchmark index.
* Smart Beta ETFs are comprised of a list of stocks that are selected based on criteria. The criteria is often a factor or a combination of factors like low volatility, value, quality or momentum. For example, a Nifty Smart Beta ETF with a focus on low volatility would comprise of stocks within the 50-stock index that are relatively less volatile than their peers.

While the expense ratio of ETFs is generally low, there are certain costs that are unique to ETFs. Since ETFs, like stocks, are bought as shares through a broker, every time an investor makes a purchase, he/she pays a brokerage commission. In addition, an investor can suffer the usual costs of trading stocks, including differences in the ask-bid spread etc. Of course, traditional mutual fund investors are also subjected to the same trading costs indirectly, as the fund in turn pays for these costs.

The tax on redemption of equity ETFs depends on the period of holding. If the holding period is more than a year, then there is long-term capital gain. It is exempt if the gain is up to Rs.1 lakh. For long-term capital gain of above Rs.1 lakh, the tax liability is 10% without indexation benefits. However, if the holding period is less than 12 months, then 15% tax liability arises from short-term capital gain.

In ETF (other than equity) and FOF, if the holding period is less than 36 months, there is short-term capital gain. Income from such sales is included in the normal income, and tax is calculated as per normal slab rates. Also, the tax liability of 20% (with indexation benefits) is calculated if long-term capital gain arises from selling such assets. The FOFs are treated as debt funds regardless of any of the schemes they invest in.

ETFs v/s Stocks & Mutual Fund

Functionality

ETFs

Stocks

Mutual Fund Units

Returns at par with the market/ Index

*

* subject to tracking errors

Net asset value (NAV)

Like a mutual fund, an ETF also has an end of the day Net Asset Value (NAV).NAV tells you the total value of all the fund's assets and yours. An ETF trades real-time, whereas NAVs are only announced at the end of the day. So how do you figure out if the price you are paying for an ETF is fair in real-time?

Check iNAV

Intraday or indicative net asset value (iNAV)

Given that ETFs trade real-time, you need a reference point to see if the market price you see on your trading platform is a fair one and the indicative or intraday NAV (iNAV) serves as that reference. AMCs usually calculate this every 10-15 seconds and publish it on their websites. This serves as a real-time NAV so that you can use this as a fair value reference to compare it with the current market price on the stock exchanges.

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund related services are not Exchange traded products and I-Sec is just acting as distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein mentioned are solely for informational and educational purpose.

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ETF - Exchange Traded Funds to Invest in India - ICICIdirect

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Basket of ETFs that collectively target delivering higher returns than Multi-cap Mutual Funds Schemes in most cost efficient manner Basket of ETFs that collectively target delivering higher returns than Large-cap Mutual Funds Schemes in most cost efficient manner For an Auspicious start to your investment journey, the portfolio provides exposure to top notch companies and Gold at the same time In India we have 5 types of ETFs- Equity, Debt, Gold, Global and Smart beta.

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ICICIdirect Money App : App for Online Mutual Fund Investing | ICICI Direct

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ICICIdirect Money App : App for Online Mutual Fund Investing | ICICI Direct

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| ICICI Direct Money app is a new mobile Investment app. Mobile Invest is a one-stop-shop solution for all stock market enthusiasts. Visit now to know more

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Videos

Podcast

Time to follow discipline and start Investing

Equity Markets Outlook- Kotak Flexicap Fund

About ICICIdirect

ICICIdirect is one of the largest distributors of mutual fund with over 5 million users. Over the time ICICIdirect has emerged as a one stop digital financial super market.

At ICICIdirect we are always putting YOU first. Our research backed products and recommendations enable you to take an informed investment decision. We have a strong, dedicated research team covering companies across sectors which helps us in-depth evaluation of mutual fund scheme portfolios.

We have made investing in existing as well new fund offers (NFO) completely hassle free. We are empaneled with 38 Asset Management Companies (AMCs) and offer investment across all types of mutual funds. We also support payment from all major banks (UPI & Mandate) for your mutual fund lump sum as well as SIP investments

Disclaimer:

ICICI Securities Limited- AMFI registered Mutual Fund Distributor. Registered office of I-Sec is at ICICI Securities Ltd. (I-Sec) - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel: (91 22) 6807 7100, Fax: (91 22) 6807 7803. I-Sec is also a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. AMFI Registration No.: ARN-0845. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund related services are not Exchange traded products and I-Sec is just acting as distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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Videos Podcast Time to follow discipline and start Investing Equity Markets Outlook- Kotak Flexicap Fund About ICICIdirect ICICIdirect is one of the largest distributors of mutual fund with over 5 million users. Over the time ICICIdirect has emerged as a one stop digital financial super market. At ICICIdirect we are always putting YOU first.

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Investonomics: Growth in Market and Wealth - ICICIdirect

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Investonomics: Growth in Market and Wealth - ICICIdirect

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| ICICIdirect investonomics helps you make smarter decisions before you begin investing in the market. Visit now at ICICI Direct to know more about Investonomics

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"To attain knowledge, add things everyday. To attain wisdom, remove things every day," are wise words from the Chinese philosopher Lao Tzu. Investonomics aims to do just that by adopting a Buffet approach, where the menu includes imparting Investment Tips, encouraging investors from all walks of life to start investing and keep investing with a long-term horizon to realise high returns using the Power of Compounding. And, it's just not about equities alone. Mutual Funds remain our high priority as they are less risky tools which ensure inflation beating returns and allow the common man to be part of the market. With the best of the Market Gurus sharing Investment Mantra on the platform, our target is also to groom the professional market players into a smart investor like Warren Buffet. The market today is as complex as a human brain, with so many nerves moving it. So we adopt a multi-pronged approach to decode each nerve of the market . To enable the investors to make the right investment decisions we throw up research, analyse the corporate numbers, grill the corporates about their investment decisions and functioning so as to find out whether the stock is worth investing in or not. In dialogues with Global Doyens of Markets, we explore how happenings in other parts would impact Indian market as we play in a dynamic and highly globalised world. Moreover, it aspires to become a one stop destination for all the investor education and upgradation of the skills.

Poll

The Achievers

Incredible stories of business leaders & corporate honchos who are shaping the industry through their incredible work. Watch their stories in the Achievers Series.

The Big Interview

Interviews of market czars. How they succeeded. What were the odds then as compared to now. The challenges and boons during their time when they were riding high on stock market.

The Global Dialogue

Interaction with global market leaders on how market is performing globally. What measures can be put in place to control the market. Boons amongst which industry is reliable

Money Matters

One can never give enough importance to financial freedom. An unders... Read More

Would you like to plan your finances in a way to save taxes? Let us look at investments that are tax-free for millennials.

Read More

The 2 Minutes Class

The class would be about small & basic aspect of financial market from beginner's point of view. It would also include steps for DIY of Finance market to get you acquainted of how market functions.

Your Zone

It's a dream of every individual to have a comfortable lifestyle and pursue their passion when they hang up their boots. This is what financial independence is all about. Watch the videos to know more.

The Bucket List Challenge

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Investonomics - Market & Wealth Growth - ICICIdirect

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"To attain knowledge, add things everyday. To attain wisdom, remove things every day," are wise words from the Chinese philosopher Lao Tzu. Investonomics aims to do just that by adopting a Buffet approach, where the menu includes imparting Investment Tips, encouraging investors from all walks of life to start investing and keep investing with a long-term horizon to realise high returns using the Power of Compounding.

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What are Liquid Funds? Should You Invest? | ICICI Direct

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What are Liquid Funds? Should You Invest? | ICICI Direct

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Liquid funds are debt funds that invest in fixed-income securities like treasury bills, commercial papers, and government securities. Visit now at ICICI Direct to know more about Liquid Funds

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ICICI Direct - Online Stock Trading In India at Low Brokerage

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ICICIdirect is amongst India's largest retail broker and financial product distributor, trusted by ~80 lac customers with a track record of over two decades of service. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading.

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Share Market Today: Latest Share Market News & Updates | ICICI Direct

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Share Market Today: Latest Share Market News & Updates | ICICI Direct

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| Share Market Live Today: Discover the most recent information on the top gainers, losers, LIVE BSE/NSE, Nifty Sensex Share Price, and more on a single platform. Visit now at ICICI Direct to know more

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Online Equity Trading in India | Share & Stock Market Trading - ICICI Direct

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Get the detailed online equity trading tips & equity market recommendations. Start share & stock market trading with ICICI Direct - the best online equity trading platform in India.

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Trading: Best Online Trading Platform in India | ICICI Direct

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Trading: Best Online Trading Platform in India | ICICI Direct

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| Online trading: ICICI Direct offers a user-friendly trading platform with cheap brokerage costs for trading stocks, derivatives, mutual funds and currencies. Visit now to know more

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ICICIdirect is the largest retail broker and financial product distributor in the country trusted by over 50+lac customers with over 2 decades of service having 170+ branches across India. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading. ICICIdirect offers more than 50 products and services like Equity, Mutual Funds, Derivatives, Futures and Options Currency, Commodity, ETF, Insurance, IPOs, Corporate Fixed Deposits, Loans, NPS, Wealth Management, Corporate Services, NRI Services, Portfolio Management Services, Global Investment, Financial Learning, Tax Services etc. under one roof to help you to achieve your investment goals.

What sets ICICIdirect apart is its unique research desk that offers various research based products designed to meet your needs across different time horizons. ICICIdirect award winning research teams have a 75% strike rate since inception.

Come and discover the world of trading and investing by opening ICICIdirect account today!

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ICICIdirect - Online Share Trading in India at low brokerage

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ICICIdirect is the largest retail broker and financial product distributor in the country trusted by over 50+lac customers with over 2 decades of service having 170+ branches across India. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading.

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How to choose intelligent investing with ICICI Direct

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How to choose intelligent investing with ICICI Direct

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ICICI Direct provides expertly selected, research-based Mutual Fund portfolios, under the One Click Investment option. Visit now to know more about Intelligent Investing

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Investing in India has never been more worthwhile. With its positive demographics and dynamic economy, the country is presently primed to be the largest emerging market in the world. For any prudent investor, now is the time to opt for a wise mix of mutual funds keeping risks in mind.

Over the past few decades, investment habits in India have been evolving. Although financial decisions about investing are still erratic, more and more Indians are opting for regular savings and investment habits to grow their wealth. ICICIdirect.com is a perfect platform for such enthusiastic investors. Committed to making investment journeys easy, simple and successful, it offers tailor-made portfolios to help investors realise their goals.

ICICI direct offers carefully curated, research-backed Mutual Fund portfolios, under the One Click Investment option, to help power investments. For any investor, these portfolios are cherry-picked to best suit to their life stage goals and make the most out of investments. Of the popular portfolios is One Click 50 Fifty.
What is 50 Fifty?
ICICI Direct's 50 Fifty is a portfolio that offers a perfect blend of stability as well as growth by investing 50 per cent each in equity and debt. This blend is touted as ideal for investors seeking growth potential of equity along with the stability of debt.

For long-term goals, it is important to make the best use of both equity as well as debt funds. In such a scenario, ICICI Direct's One Click 50 Fifty with its judicious mix of investments is an ideal option for any investor.
How does it work?
With a minimum lump sum investment of Rs 25,000 or an SIP of Rs 10,000, you are good to start. The portfolio assigns 25 per cent to large cap, 25 per cent to multi cap and 50 per cent is invested in debt with strategic allocation to corporate bonds.
Why go for One Click?
With One Click, you can rest assured that the health of your portfolio is being monitored every step of the way, continuously. Before you invest, you can view the historical return of the basket against benchmark in an easy to understand chart. You also have the option to invest 'One Time' (Lump Sum) or 'Monthly' (SIP) in any listed basket.

Under Mutual Fund Portfolio, you can see a new tab "One Click Portfolio" that will help track investments separately. To top it all, Mutual Fund Transaction charges are not applicable for investments done through One Click Investment. You can also assign a goal against your investment (e.g. children's education, holiday, car purchase...) and monitor them.

Is there more at One Click?

ICICI's One Click has more baskets to choose from, depending upon your investment appetite. It offers six different baskets of schemes, tailored to suit specific investor needs. Apart from Builder, there are -

Maximiser - A diversified portfolio that gives exposure across Large, Multi, Mid and Small cap schemes and helps capture the best of market cycles and sectors, making it ideal for those who seek to grow their investments over a 5 to 10-year time period.

Stable - A portfolio with higher allocation towards Debt schemes with a limited participation in equity, ideal for those who seek FD plus returns, with marginally higher risk.

Builder - A portfolio that leans towards equity, while offering the cushion of debt, making it an ideal blend for those who seek the upside of equity investments with relatively lower volatility in returns.

Secure - A portfolio that invests in quality corporate bonds and shorter term debt instruments thereby making earnings more visible and assured, ideal for those who prefer to invest without having to worry about stability in returns.

Tax Saving - A portfolio that invests in tax saving equity schemes, it not only saves on your tax outgo, but also grows your investments, helping you save taxes u/s 80C.

For investors looking to reap rich dividends in equity markets while maintaining a safe net, 50 Fifty is a great first step in the journey towards wealth creation.

Disclaimer https://tiny.cc/opx2cz

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how to choose intelligent investing with icici direct's 50 fifty  - icicidirect

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How to choose intelligent investing with ICICI Direct's 50 Fifty - ICICIdirect

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Investing in India has never been more worthwhile. With its positive demographics and dynamic economy, the country is presently primed to be the largest emerging market in the world. For any prudent investor, now is the time to opt for a wise mix of mutual funds keeping risks in mind.

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All About Investing in Gilt Funds | ICICI Direct

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All About Investing in Gilt Funds | ICICI Direct

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Gilt funds are those funds which invest in fixed-interest generating securities of the central and state governments. Visit ICICI direct to know more about Gilt Funds

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ICICIdirect is amongst India's largest retail broker and financial product distributor, trusted by ~80 lac customers with a track record of over two decades of service. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading. ICICIdirect offers more than 50 products and services like Equity, Mutual Funds, Derivatives, Futures and Options Currency, Commodity, ETF, Insurance, IPOs, Corporate Fixed Deposits, Loans, NPS, Wealth Management, Corporate Services, NRI Services, Portfolio Management Services, Global Investment, Financial Learning, Tax Services etc. under one roof to help you to achieve your financial goals.

What sets ICICIdirect apart is its unique research desk that offers various research based products designed to meet your needs across different time horizons. ICICIdirect award winning research teams have a 75% strike rate since inception.

Come and discover the world of trading and investing by opening ICICIdirect account today!

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ICICI Direct - Online Stock Trading In India at Low Brokerage

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ICICIdirect is amongst India's largest retail broker and financial product distributor, trusted by ~80 lac customers with a track record of over two decades of service. ICICIdirect.com has revolutionized the world of online investing. This online share trading platform offers a trading account for seamless and hassle free electronic trading.

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Types of Stock Market Trading in India? | ICICI Direct

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Types of Stock Market Trading in India? | ICICI Direct

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Know about the various stock trading options available in the market like intraday trading, swing trading, position trading, online trading etc. Visit now to know more

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INTRODUCTION:

What is order?

Trading in the stock market has become easy for investors today. In the age of the internet, you can trade your stocks online, in the comfort of your home. Similar to online shopping, you can now place an order for buying or selling stocks. That is called order. Therefore, an order is an instruction given by you-either to your broker or the trading portal. It is the method through which you execute buying and selling your stocks.

WHAT ARE THE TYPES OF ORDERS IN THE STOCK MARKET?

It is imperative to know the basic types of order in the stock market. Knowing the types will allow you to make a well-informed decision about your investment. It will also help you to learn more about the market. It is a guided technique on when and how to place orders in the stock market. If you wish to invest in the stock market, it is essential that you first know about the basic types of orders available. Here are some of the basic types of orders you should know.

· Market Order:

Market order allows you to buy or sells shares immediately. It buys or sells shares at the current price of the market. It gets executed at a current near bid, which is the best available price.

· Limit Order:

Limit order allows you to set a pre-determined price.Thus, you can fix an exact "limit" to your order. It is the limit at which you can buy or sell your shares. Unlike market order, the execution is not immediate. It is executed only when it reaches the fixed limit.
Watch video: https://www.icicidirect.com/knowledgecenter/video/equity/market-order-vs-limit-order
· Stop Loss Order:

Stop Loss order allows you to reduce your losses, especially in day trading. It sets a limit at which you can stop your loss. The market keeps changing daily, which may result in heavy losses. Thus, by setting up a stop loss to your order, you can exit the position when you've reached the specified limit to avoid incurring heavy losses.

However, these are just the three basic types of stock orders in the market. There are a few others you should know:

· After Market Order (AMO):

After Market Order allows you to trade after the market hours when it is closed. All you need to do is place your order at the share price you wish to buy or sell. It will automatically get executed at the market hours. This type of order is suitable if you do not have time to trade during market hours.

· Cover Order (CO):

Cover Order allows you to trade two orders at the same time. You can place a market order along with a stop-loss order.

· Good till Cancelled Order (GTC):

Good till Cancelled Order allows you to trade until it gets fulfilled or cancelled. You can also set an expiry period for the period of execution.

· Immediate or Cancel Order (IOC):

Immediate or cancel order allows you to execute your trade immediately or else it gets cancelled.IOC may result in partial execution. At such times, your remaining order will stand cancelled.

· Bracket Order (BO):

Bracket Order allows you to trade in 3 orders. It comprises three order types: a buy/sell order, a target order, or a stop-loss order. Thus, you can place a bracket order of buying at Rs 50, a target to sell at Rs. 100 and then set a stop loss at Rs. 40.

CONCLUSION:
Disclaimer:
Stock trading is inherently risky. Knowing about the order types in the stock market will help you decide which order is best suitable for you. With it, you can minimize losses and achieve the trading price as desired. Based on your time frame, investment goals, and risk-taking capacity, you must trade your shares in the market.

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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types of stock trading in the market - icicidirect

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Types Of Stock Trading In The Market - ICICIdirect

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Trading in the stock market has become easy for investors today. In the age of the internet, you can trade your stocks online, in the comfort of your home. Similar to online shopping, you can now place an order for buying or selling stocks. That is called order.

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Difference Between Order Book and Trade Book | ICICI Direct

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Difference Between Order Book and Trade Book | ICICI Direct

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The trade book records transactions that have already been closed, whereas the order book records all orders ever placed. Visit ICICI Direct now to know more about the Difference Between Order Book and Trade Book

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What's the difference between an Order Book and a Trade Book? - ICICIdirect

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Staring at a trading terminal can be overwhelming, especially if you are new to trading. There's so much information continuously streaming that as a new trader, you may overlook or ignore critical data. This is where understanding tools such as an order book or a trade book can help improve your trading experience.

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What are stock indices & why are they significant? | ICICI Direct

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What are stock indices & why are they significant? | ICICI Direct

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A stock market index is a statistical metric that captures market fluctuations. Visit ICICI Direct know to know the Importance of Stock Indices now

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Sensex and Nifty are possibly one of those terms in the stock market jargon which almost everyone must have come across multiple times, be it through newspapers, news apps or our relatives discussing the stock market. Sensex and Nifty are few of the many stock indices in our country and the concept of stock indices is central in understanding the Indian Stock market. In this article, we will find out what are stock indices and their importance.

What is stock index?

Let's begin by understanding what is meant by the term stock index or indices.

A stock index is essentially a statistical measure that portrays any changes in the trends of the stock market in general. An index is created by grouping stocks together based on a defined criteria depending on the characteristics of a particular index. Stocks in an index are selected using some criteria, which may be market capitalization, type of industry, theme or some investment strategy.

The value of the index is calculated using the values of the underlying stocks in the index, and consequently any changes in the prices of these stocks impact the overall value of the index. So, if majority of the stocks in the index were to witness an increase in their prices, the value of the index will go up as a whole and vice-versa.

Let's now look at a few examples of stock indices in India.

Stock indices can either be broad market indices like S&P BSE Sensex and NSE Nifty, Sectoral indices like Nifty FMCG and S&P BSE Healthcare which are a gauge of companies falling under a particular sector, and indices based on market capitalization like S&P BSE Small cap and S&P BSE Midcap.

Let's now take a detailed look at the 2 broad market indices in India, the BSE Sensex and the NSE Nifty.

Sensex is India's oldest stock index, introduced in the year 1986. It consists of the 30 stocks of largest, liquid and financially sound companies of the key economic sectors listed on the Bombay Stock Exchange, BSE. NSE Nifty, also known as Nifty 50 was created in 1996 and consists of the 50 largest and most liquid stocks from major economic sectors listed on the National Stock Exchange, NSE.

How indices arrive at a value?

One should know that each stock has a different price and a change in one would not be in proportion to the other in an index, and leadingly, the value of an index cannot be determined by simply summing up the prices changes of all the stocks which fall under the index. And that is why every stock is assigned a particular weight in proportion to its market capitalization. This weight can be roughly considered to be a representation of the impact which any change in the price of the stock will have on the value of the index.

Indian indices make use of the free-float market capitalization to assign weights to a particular stock falling under an index. Market capitalization measures the total value of the company as a product of the company's stock price and the number of its shares outstanding in the market. Free float market capitalization excludes the shares held by promoters and only incudes those shares which are freely available in the market for trading.

Why we need indices?

A stock index essentially acts like a barometer reflecting the overall condition of the markets or the sector it represents. Indices are incredibly useful for assessing the general direction in which the market seems to be heading.

Indices assist investors in selecting appropriate stocks for investment and act as a reference point to measure their performance. One can assess performance of stock portfolio, whether the portfolio outperforms the index by giving higher returns than the index or does it underperform by delivering lower returns as compared to the index. Since an index usually consists of companies grouped together according to some aspect, it acts as a parameter of peer comparison. As an example, one can understand which bank amongst those listed in the index Nifty PSU bank has delivered the highest returns in the past year.

One of the most crucial benefits of indices is their ability to reflect investor sentiment. It is a well-known fact that investor sentiment is an important factor in driving the price of a stock as it directly impacts the demand of a stock.

Indices are also a helpful tool for passive investors who wish to reduce the cost and time required to carry out research in selecting the most appropriate stocks according to their risk appetites and goals. Hence, they construct a portfolio consisting of the stocks tracking a particular index to replicate the returns delivered by that index or invest in index ETFs (Exchange traded Funds).
Also Read: Understanding Commodity Indices
Conclusion

All in all, indices are extremely important as a representative or a benchmark of a particular sector or the entire market as a whole, and it serves as a very handy tool for investors to assess a multitude of aspects, from the performance of their portfolio to the impact a particular event has had on the market performance.

After reading to all of this, one should be able to understand what people mean when they say Sensex has gone down by 350 points or that Nifty has gone up by 200 points and what exactly is meant by such fluctuations in the markets.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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what are stock indices and their importance? - icicidirect

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What are stock indices and their importance? - ICICIdirect

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Sensex and Nifty are possibly one of those terms in the stock market jargon which almost everyone must have come across multiple times, be it through newspapers, news apps or our relatives discussing the stock market. Sensex and Nifty are few of the many stock indices in our country and the concept of stock indices is central in understanding the Indian Stock market.

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How to Invest in Nifty 50 Directly | ICICI Direct

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How to Invest in Nifty 50 Directly | ICICI Direct

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Investors can trade in NIFTY 50 stocks through derivative contracts such as Futures and Options. Visit now at ICICI Direct to learn how to Invest in Nifty 50 directly

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How does long term capital gains tax impact you in India | ICICI Direct

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How does long term capital gains tax impact you in India | ICICI Direct

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A capital gains tax is a tax on the profit realized on the sale of a non-inventory asset. Visit now at ICICI Direct to know How does long-term capital gains tax impact you

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Introduction

In India, any income or profit earned is taxable. Just like you pay income tax on any income that you generate, profit from the sale of assets also attracts tax. If you sell shares, mutual fund units, real estate, gold and even artwork, the gains from these assets are subject to tax.

There are two kinds of tax levied on capital gains-short-term capital gains tax and long-term capital gains tax. This article will talk about the latter and its implications on your finances.

What is long-term capital gains tax?

Long-term capital gains tax, or LTCG tax as it is more commonly known, is a tax that you pay for gains earned on assets you hold for a long term. The duration for an asset to be classified as a long-term holding varies from one asset to another.

On stocks and equity oriented mutual funds held for longer than a year, LTCG tax is applicable. For any profit of more than Rs. 1,00,000 for more than a year from equity investments, LTCG tax of 10% is levied.
Additional read: Equity Capital Gains Taxation and Tax Loss Harvesting in Stock Markets
A holding period of more than three years is considered long term for debt mutual funds. Irrespective of the tax bracket you fall under, the LTCG tax on debt mutual funds is 20% after indexation. Indexation adjusts the cost of purchase of debt mutual fund units according to the prevailing inflation rate. This usually reduces your tax liability.

LTCG tax is levied on real estate and land holdings held for more than two years. Like debt mutual funds, the LTCG tax rate is 20% on real estate after indexation.

LTCG tax on gold is 20% after indexation. You must own gold for at least three years before being sold to be considered a long-term holding.

Other moveable assets such as paintings, art and even cars are subject to LTCG tax if held for more than three years. The rate is 20% after indexation.

Impact on your finances

Long-term capital gains tax can impact you if you sell any capital assets and earn a profit on those. For instance, if you sell a house you bought ten years ago, any gains you make from it will attract an LTCG tax of 20%. You will have to declare these gains while filing your income tax returns.

However, any inheritance that you get is exempt from tax. If you inherit property, gold or any other capital asset from a family member, you do not have to pay tax. If you sell inherited assets, you will have to pay LTCG tax.

Avoiding LTCG tax

If you want to avoid paying LTCG tax, there are ways to reduce your outgo. For long-term gains from the sale of property, land or any other immovable asset, you can reinvest the gains in another immovable property or certain bonds sanctioned by the government.

To avoid tax on the sale of other assets, you can reinvest the entire amount in property. Unlike real estate sales, you cannot invest only the gains. You need to reinvest the sale amount. For instance, if you sell debt mutual funds worth Rs. 10,00,000 and earn a profit of Rs. 2,00,000, you must reinvest the entire Rs. 12,00,000 in property to be able to avail of the tax exemption.

Conclusion

Depending on the capital asset you sell, India's taxation laws require you to pay long-term capital gains tax. Since this can be a significant amount, there are ways to save this tax. Consult a tax expert to help you plan what to do with your capital gains.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Composite Corporate Agent License No.CA0113, AMFI Regn. No.: ARN-0845. We are distributors of Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. Please note that Mutual Fund Investments are subject to market risks, read the scheme related documents carefully before investing for full understanding and detail. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The non-broking products / services like Mutual Funds, Insurance, FD/ Bonds, loans, PMS, Tax, Elocker, NPS, IPO, Research, Financial Learning etc. are not exchange traded products / services and ICICI Securities Ltd. is merely acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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how does long term capital gains tax impact you? - icicidirect

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How does long term capital gains tax impact you? - ICICIdirect

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In India, any income or profit earned is taxable. Just like you pay income tax on any income that you generate, profit from the sale of assets also attracts tax. If you sell shares, mutual fund units, real estate, gold and even artwork, the gains from these assets are subject to tax.

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Reasons Why You Need to Invest in Life Insurance | ICICI Direct

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Reasons Why You Need to Invest in Life Insurance | ICICI Direct

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Life insurance is a vital protection coverage for your loved ones in the event of your untimely death. Visit now at ICICI Direct and learn more about Life Insurance to secure yourself

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Introduction

When you are young, you rarely think about what will happen to your family or dependents if you are no more or suffer an accident that leads to permanent disability. Youth can be blind to the uncertainties of life. A way to hedge this risk is to buy life insurance policy.

Life insurance is a low priority financial product among the youth. Life insurance is quite an underpenetrated market in India. According to the latest Economic Survey, just three out of 100 Indians have life cover.

A financial expert will tell you that life insurance is one of the most important financial products for risk protection. No matter your age, having a life cover has many advantages. When you purchase life insurance at a young age, your premiums will be much lower. It is a financially-prudent investment to protect your loved ones.
Additional read: What is Life Insurance? What are its Coverages?
If you are not convinced about why you should buy life insurance, here are five reasons that could change your mind:

1. Protection for your loved ones

If you die or suffer an accident that leads to disability, life insurance can provide financial protection to your family. If you have dependent parents, grandparents, a spouse or children, getting life cover becomes even more critical. While money cannot compensate for your death, but having life insurance policy can ensure that your family is financially looked after even if you aren't around.

2. It can clear your debt

If you don't have financial dependents, you could still take life insurance plan to ensure your debts are covered if you die prematurely. In today's world, having an education loan, car loan, home loan or even credit card debt is common. If your parents or spouse have co-signed on your loans, they will become responsible for paying these loans if you die. Buying life cover can ensure that you take care of debt on your own even after your death.

3. Tax savings

Premiums on life insurance are tax-deductible up to Rs. 1,50,000 a year under Section 80C of the Income Tax Act. If you cannot choose the suitable tax-saving instruments to invest in, you could buy life insurance to reduce your tax liability. At the same time, it will also give you financial risk protection.

4. Create an emergency backup

Did you know that you can take a loan against an endowment or a whole life insurance policy? This is often a better alternative to personal loans since the interest rate is lower. Think of it as borrowing from your future self. If you find yourself in a financial crunch, you can take a loan against your life insurance policy. However, do note that term policies are not eligible for loans.

5. Peace of mind
Additional read: 5 things to consider before buying a life insurance cover
Perhaps the most significant intangible benefit of getting life cover is the peace of mind that it offers. You can be rest assured that your loved ones and dependents will be taken care of with a life insurance plan. You will leave behind no debt for anyone else to cover. At the same time, with the right life insurance policy, you can also generate income to meet long-term plans and your retirement goals.

Takeaway

Life cover is essential for risk protection and your family's welfare, not just when you enter mid-age but also when you are young. When you purchase online life insurance (or offline), the younger you are, the lower your premium would be. You can also benefit from tax savings.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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five reasons why everyone needs life insurance - icicidirect

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Five reasons why everyone needs Life Insurance - ICICIdirect

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When you are young, you rarely think about what will happen to your family or dependents if you are no more or suffer an accident that leads to permanent disability. Youth can be blind to the uncertainties of life. A way to hedge this risk is to buy life insurance policy.

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Learn How do Indian companies list on Foreign Exchange | ICICI Direct

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Learn How do Indian companies list on Foreign Exchange | ICICI Direct

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Indian companies can only list their equity share capital abroad through ADR and GDR. Visit ICICI Direct now to know more about how Indian companies list on Foreign Exchange.

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Introduction

When a company decides to go public or dilute its equity ownership, it issues its Initial Public Offer (IPO). The purpose of this IPO is to raise capital for the expansion of the company by selling its equity shares to retail and institutional investors.

The process of issuing an IPO starts with filing a Draft Red Herring Prospectus (DRHP) by the company with the SEBI. The company has to mention several details, such as its financials for the past three years, profit and loss statements, the number of shares it wants to sell, the size of the IPO, and the exchanges or share markets where it would be listing its shares.

Usually, Indian companies look to list their securities on the two prominent domestic exchanges-The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). However, with time, companies have even started to look beyond borders to raise capital for their business.

After the central government's order which allowed Indian companies to get listed directly on the foreign exchanges, such as the US Exchange and the European Exchange, there was a rush among the companies to list abroad. Read on to know the procedure for direct listing of Indian companies in foreign exchanges.

Learn about the ADR and GDR

Before we delve into the process of direct listing of Indian companies in the global stock markets, it is crucial to learn about the American Depository Receipt (ADR) and the Global Depository Receipt GDR). ADRs and GDRs were introduced by the Government of India to help Indian companies sell their shares in the foreign share markets or stock exchanges.

Similarly, the Indian Depository Receipt (IDR) was introduced to help foreign companies sell their stocks or shares in the Indian stock markets.

What is an ADR?

The ADR stands for an American Depository Receipt. With the help of an ADR, a company that has been incorporated in India can raise money from American investors by selling its shares on the US Stock Exchanges. Several prominent Indian companies-such as Tata Motors, ICICI Bank, Infosys, and Wipro-have ADRs in India.

An Indian ADR can be issued for a single share, multiple shares, or a fraction of shares as considered fit by the depository bank. There are two types of ADRs:

1. Sponsored ADRs

These ADRs are issued when a non-American company decides to deposit its shares to a US depository bank, which in turn, sells those shares in the US stock markets.

2. Unsponsored ADRs

These ADRs are issued when a non-American company decides to sell its share over-the-counter in the US stock markets.

What is a GDR?

The GDR stands for a Global Depository Receipt. These are the negotiable certificates issued by the depository banks, using which an Indian company can sell its shares in the global stock markets.

Direct listing of Indian companies in foreign exchanges

In 2018, the Government of India constituted a committee to discuss the direct listing of Indian companies in the foreign stock markets or foreign exchanges. Until now, the companies were allowed to sell their shares in the global markets only through ADRs and GDRs.

However, after the central government's allowance, Indian companies can apply for their direct listing in the global stock markets. Unlike ADRs and GDRs, they can then sell their shares directly on the US Exchanges and the European Exchanges without having to deposit their shares with a foreign depository bank.

However, the committee is still working on creating the framework and guidelines for the direct listing of Indian companies in foreign markets.

To conclude

At present, Indian companies can sell their shares in foreign markets only through the ADRs and GDRs. However, the Indian Government and the SEBI is working hard to create a framework for the direct listing of domestic companies in the US and European exchanges. If everything goes well, this move can benefit the companies, investors, and the government in equal proportions.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. The securities quoted are exemplary and are not recommendatory. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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how do indian companies list on foreign exchange - icicidirect

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How do Indian companies list on Foreign Exchange - ICICIdirect

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When a company decides to go public or dilute its equity ownership, it issues its Initial Public Offer (IPO). The purpose of this IPO is to raise capital for the expansion of the company by selling its equity shares to retail and institutional investors.

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Best Investment Options in India for 2022

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Best Investment Options in India for 2022

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Every investor wants to make investment plans that involve minimum risks and higher returns. Visit ICICI Direct now to know about Best investment options in India

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Introduction

Every investor wants to make investment plans that involve minimum risks and higher returns. However, investment is all about the correct knowledge of different options, your risk appetite, financial goals and needs. Proper analysis of these factors helps you make an informed decision and generate long-term returns. Here are some of the best investment options in India that can help you make an informed choice.

Best investment options in India

1. Stocks

Investment in stocks or direct equity is one of the best options to generate higher long-term returns if you have a high-risk appetite. Investing in the shares of a company makes you a partial owner in the company's profits and losses. So, before investing in direct equity, ensure you have adequate knowledge about the stock market and the company in which you are investing. You must know where to invest and when to buy or sell a stock.

2. Mutual funds

If you have no market experience but wish to invest in stock markets, an equity mutual fund is one of the best investment options in India. The investment allows you to reduce market risk as it offers you a diversified portfolio of stocks. Moreover, a mutual fund is easy to understand and buy than investing in individual securities. The fund is professionally managed in which a fund manager helps you make a portfolio as per the fund's objective. Not only stocks, but you can also invest in other asset classes like debt, gold, etc., with mutual funds.

3. Real estate Investment Trusts (REITs)

Real estate is one of the fast-developing sectors in the economy, which makes investment in the sector lucrative. A real estate investment trust helps you invest in large properties related to housing, commercial, hospitality, etc. The investment trust manages income-generating real estate assets that help you increase wealth with long-term returns. So, without actually buying properties for investment, you share the income growth of properties with the REITs.

4. Gold ETF

Investments in gold ETF are similar to holding stocks where you hold gold units without the hassle of buying actual gold. The prices of the gold units depend on the gold price making the investment more transparent and predictable. Also, gold ETF can be traded on the stock exchange and used as security while availing loans. The investment option comes without a lock-in period where you can exit a gold ETF anytime.

5. Bank fixed deposits

Bank fixed deposits are considered one of the best investment options in India if you want fixed returns with low risks. This investment instrument is not market-linked and is one of the safest investment options. The fixed deposit provides cumulative and non-cumulative investment choices. In a cumulative option, you can reinvest the interest earned on the deposits which are paid at maturity. Whereas in the non-cumulative option, the interest will be paid periodically.

6. Public Provident Fund

Being a government initiative, a Public Provident Fund is a secure investment option. You can open a PPF account in selected Indian bank or a post office. The investment in PPF is locked for 15 years, but you are able to make partial withdrawals after five years with compound interest earned. You can invest a minimum of Rs. 500 to maximum Rs. 1.5 lakh annually under a PPF. Moreover, availing of loans against investment is one of the major benefits of PPF. The investment amount and interests earned are tax-free under a PPF.

7. Unit-linked insurance plans

Unit-linked insurance plans (ULIPs) are one of the best investment options in India allowing you to make investments and get insured at the same time. The plan helps provide life cover along with long-term financial savings. A part of the premium goes to insurance coverage and the other half is invested in equity, bonds, etc. A ULIP comes with tax benefits under Section 80 C and Section 10(10D) of the Income Tax Act, 1961.

8. Government bonds

A government bond is issued by the central and state government in India. You can purchase the bonds either at a fixed interest rate or floating interest rate. The investment in government bonds is suitable if you are looking for steady return and don't want to take default risk.

Conclusion

Investments allow you generate higher returns if you have the right level of patience and knowledge. They can be beneficial in accumulating wealth and providing a secure financial future. However, choosing the investment option that suits you best is essential. So, gather all possible information about the investment option before you consider moving ahead.

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best investment options in india - icicidirect

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Best Investment Options in India - ICICIdirect

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Every investor wants to make investment plans that involve minimum risks and higher returns. However, investment is all about the correct knowledge of different options, your risk appetite, financial goals and needs. Proper analysis of these factors helps you make an informed decision and generate long-term returns.

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How do NRIs trade on Indian stock exchanges? | ICICI Direct

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How do NRIs trade on Indian stock exchanges? | ICICI Direct

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The Indian government welcomes all kinds of participants to invest in the stock markets. Visit ICICI Direct to know more about how NRIs to trade on Indian stock exchanges.

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Introduction

Non Resident Indians can invest with ease in Indian stocks through various intermediaries in the stock markets. There are guidelines specified for such investments by regulators like the Reserve Bank of India that have to be followed while making such investments. An NRI can invest in Indian stocks through a Portfolio Investment Scheme (PIS) account. A PIS account is required specially when there are foreign funds being used for investment on a repatriable basis. Alternately, NRIs can also use their Indian funds from a NRO account to invest in Indian stocks.

All NRI investments are governed according to the Foreign Exchange Management Act (FEMA).

Who is an NRI?

As per FEMA, an NRI is an Indian resident or a person of Indian origin who resides outside of India for employment, education or business, etc. NRI must also satisfy two other conditions:

They should stay abroad for more than 183 days or more during the course of preceding financial year

Or

They need to be in India for a tenure of less than 60 days during the last year and less than 365 days during four years before the previous year, on an aggregate.

PIS account

PIS account stands for Portfolio Investment Scheme. A PIS Account enables NRIs to buy and sell shares and convertible debentures in Indian stock exchanges. It is used to route all NRI transactions in listed securities via valid banks that have to report back to the RBI on these investments.

Purchases are debited from the account while sales are credited. The RBI needs to provide a PIS permission letter to open a trading and demat Account. The PIS-enabled account can be an NRE or an NRO account. NRE accounts allow repatriation of funds, while NRO accounts do not allow the same. An NRI can choose between the two or choose both depending on their needs.

Trading and Demat accounts

The RBI uses PIS accounts to track all NRI investments in India. NRIs also need Trading and Demat Accounts to operate in the stock market. These accounts have to be linked to the PIS account.

How does trading work?

Apart from these formalities, the actual trading process for NRIs is the same as Indian residents. However, a few considerations have to be kept in mind. The ceiling for overall investment for NRIs/PIOs is 10 per cent of the paid up capital of the Indian company. And the ceiling for individual investment for NRIs/PIOs is 5 per cent of the paid up capital of Indian company. A list of companies can be found on the RBI's website.

NRIs are also not permitted to engage in intraday trading. They have to make investments that are delivery-based.

Tax implications on NRI

The Indian capital markets are attractive investment avenues. And so, they find investors from across the globe. Among this investor fraternity, NRIs occupy a significant portion. NRIs may migrate to affluent countries for employment, education, and business, but when it comes to equity investments, their home country remains one of their favourites.

Did you know that there are some tax implications for NRIs on the capital gains earned through equity instruments? And these implications could go on to disturb financial plans too. Hence, if you are an NRI, you ought to be aware of these implications before going deeper into equity investments.

Profits or gains arising from transfer of a capital assets are called "capital gains". Long Term Capital Gains (LTCG) refers to gains arising out of sale/transfer of financial assets held for more than 1 year and securities held for less than 1 year are subject to Short Term Capital Gains (STCG). However, long term capital gain from equity investments up to Rs. 1 lakh is exempted from tax.

In India, NRIs are charged long and short term capital gains tax and it is deducted at source. Below are the TDS rates as on 1st April 2022:

Conclusion

The Indian government welcomes all kinds of participants to invest in the stock markets. NRIs can invest in the stock markets as long as they follow the guidelines specified by regulators. If you are an NRI and want to open a Trading and Demat account, contact a SEBI-registered broker of your choice and get the formalities started.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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how do nris trade in the stock market in india? - icicidirect

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How do NRIs Trade in the Stock Market in India? - ICICIdirect

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Non Resident Indians can invest with ease in Indian stocks through various intermediaries in the stock markets. There are guidelines specified for such investments by regulators like the Reserve Bank of India that have to be followed while making such investments. An NRI can invest in Indian stocks through a Portfolio Investment Scheme (PIS) account.

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Benefits of investing in Global Markets | ICICI Direct

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Benefits of investing in Global Markets | ICICI Direct

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The global investment provides an additional source of wealth creation in your portfolio and helps diversify the risk. Visit ICICI Direct to learn more about Investing in Global Market benefits.

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The importance of financial markets for achieving long-term wealth accumulation is widely recognised by the investor community. Asset valuation tends to gain over the long run, despite the fact that markets are by their very nature turbulent in the short to medium term. Furthermore, there are ways to mitigate the volatility and risks related to investing in the markets as you start your investment journey through financial market investments.

Diversification is one of the tools used to address these risks. Nevertheless, simply investing within the same economy is insufficient. Allocating a portion of your portfolio to foreign equities along with Indian equities gives it the essential diversification.

If an investor keeps all his allocations in one country/economy, their risks & opportunities are also concentrated in a single place. But, if the investments are made across geographies, varied monetary policies & market cycles provide different growth opportunities and diversified risk to the investors. For these reasons, diversifying one's investments geographically is now considered a vital element of building a robust portfolio and now Indian investors have the opportunity to do so.
Note: Dow Jones has delivered over 57% in the last 5 years Source: Google Finance Note: S&P has delivered over 77% in the last 5 years Source: Google Finance
The global stock market also provides enormous opportunities for investors, ranging from individual equities to exchange-traded funds across themes. The largest international blue-chip stocks are now available to Indian investors.

Following are the tools using which one can invest in foreign stocks-

1) Global Funds created by Indian fund houses with foreign tie-ups

2) Direct Investment with a foreign broker that has a presence in India
Note: Using the above tools, one can invest in stocks, ETFs and a few other asset classes
Here Are A Few Reasons As To Why One Should Look Into Investing In The International Markets

Participate in the global growth story

With access to international markets, you have the option of investing into the leaders & innovators across the globe. This helps you participate in the growth story of other leading economies - e.g. the US is home to large giants like Meta, Amazon, Apple, Alphabet. To simply gauge the size of the US market which is the world's largest stock market - US stock market is almost 16x of the Indian stock market. And Apple Inc. (which touched a $3 trillion market cap in early 2022, on its own it is bigger than the 5 th largest economy in the world!
Note: Apple has generated over 500% just in the last 8 years Source: https://markets.businessinsider.com/stocks/aapl-stock#instrument-detail-news
Rupee Depreciation
Rupee Depreciation Chart
Rupee has historically depreciated almost 2% - 3% per annum against leading currencies like the USD and EUR in the past 10 years. This means any Indian investor investing in foreign securities denominated in these currencies, would have seen his investment appreciated by 2% - 3% per annum merely due to the currency movement post conversion to Rupee.

Source: USD INR | Chart | US-Dollar - Indian Rupee (businessinsider.com)

Diversification

Since the winners across the geographies keep on changing and the underlying factors affecting various regions may be distinct from each other, there is a strong reason for diversifying one's portfolio across economies. So, even if the economy witnesses a decline, the value of your portfolio will be affected only to a limited extent.

Building up a foreign currency corpus

If you're looking at saving up global currency like US Dollars for your children's education, foreign travel or other offshore investments including but not limited to real estate, global investing helps you create that corpus in the foreign currency and grow it efficiently.

Investor Protection

Developed economies like the US and UK have strict customer protection laws & agencies in place. Agencies like the U.S. Securities and Exchange Commission and the UK Financial Services Authority protect investors against any wrongdoings against the investors, if any.

Fractional shares

One unique aspect of US bourses is it allows fractional ownership of shares. Fractional shares let investors purchase select stocks based on a dollar amount they want, rather than the price of a whole share. This makes investing globally affordable. For example, you can own a fraction of Tesla shares for just $1, where each share costs almost $900 which is around Rs. 68,000. Hence the minimum ticket size for taking an exposure to US securities is low.

Conclusion

While investors do tend to have a bias to invest in their home countries, it is now become imperative for any investor to create a portfolio with a global view. This allows them to reap the benefits of investing abroad such as risk diversification, generating income in a foreign currency etc.

Furthermore, there are certain themes like Artificial Intelligence, semi-conductor and precious metal mining, etc. which are not available in markets like India but can be accessed through others. And, with the ever increasing information exchange and technological advancements, the access to global markets has also become much more convenient for investors.

Disclaimer: ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code:-07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: complianceofficer@icicisecurities.com. Investment in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The non-broking products / services like global investment etc. are not exchange traded products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.

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why investing in global markets is important - icicidirect

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Why Investing In Global Markets Is Important - ICICIdirect

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The importance of financial markets for achieving long-term wealth accumulation is widely recognised by the investor community. Asset valuation tends to gain over the long run, despite the fact that markets are by their very nature turbulent in the short to medium term.