Intraday Options Trading in India - Everything You Need To Know

 

By now, you're sure to have listened to many success stories about traders from stock exchanges. Be it on YouTube videos, friends, neighbours, or even intrusive advertisements from financial brokers in the country. The fact is, one of the most commonly utilized methods for generating wealth through the stock market is intraday trading in India.

 

As the name suggests, you will be entering and exiting a position within the same day. This is one of the commonly used tools for speculators and traders to enter the position on the same day, without having to take delivery of the underlying asset.

 

You may have also heard about the risks involved in intraday trading.

 

Yes - intraday trading is highly risky. Yes, the returns are mind-blowing. But if you don't create a proper intraday trading strategy, and stick to it, it is extremely easy to lose all the money you've earned.

 

Before we go into detail on what's necessary to create the best intraday trading strategy online, Here are some of the basics that you need to know.

  

Intraday Options Trading In India - The Basics

What are Options?

Options are a type of derivatives contract that gives the holder the right (not the obligation) to purchase/sell the underlying asset at a specified price, after a specific time.

 

For instance, say you purchase a put options contract for a specific equity stock. When the duration of the options is over, you will have the option/choice to sell that equity stock at the pre-agreed upon price.

 

Types of Options Contracts 

There are two major types of Options Contracts.

1. Put Options - Gives the holder the right to sell the underlying shares at an agreed upon price, at the agreed upon time.

2. Call Options - Gives the holder the right to buy the underlying shares at an agreed upon price, at the agreed upon price

 

Options Trading - Some Common Terminologies

1. Expiration date - The date after which the contract expires. In American options (rare in the Indian markets), the options contract can expire anytime before the expiry date. In European Options (the most common type), the options contract has to be exercised on the expiration date.

2. Strike Price - The price at which the holder has the right to purchase/sell the stock.

3. Premium - The price per share that you pay to purchase the option contracts. Usually consists of two parts

1. Intrinsic Value: The value of the options contract derived based on the difference between the current market valuation of the stock, and the strike price.

2. Time value: The value of an options contract derived based on the duration left before the expiry of the options contract. Typically, the larger the duration left before expiry, the higher the value of the options contact would be (as the possibility that the options contract's intrinsic value would increase in the meantime). This "decay" in value is called "theta".

4. Last: The price that was paid to purchase/received to sell the option the last time it was traded.

5. Bid: The price a buyer is willing to pay for the option. If you're the seller, you may either choose to sell the options at this price, or wait for a better price.

6. Ask: The price at which the seller is willing to accept the option.

7. Change: The change in price since the close of the previous trading day, usually expressed in percentage

8. Open Interest: The quantity of options contract that are currently traded in the market.

9. Volatility: A measurement of how much the price of the underlying asset can swing in a day.

 

Benefits of Intraday Options Trading

1. High Upside Potential, Limited Downside Potential - Options contracts allow you to cash in on all the positive price movements, while the negatives are limited only to the amount of premium paid to purchase the options contract. In other words, the sky is the limit when it comes to profit, but you don't stand to lose a single penny more than the amount you used to purchase the options contract.

2. Low Cost of Entry - Day trading in options allows you to enter and exit positions much quicker, and with much less capital than with other types of securities. These options contracts are cheaper than the underlying asset, enabling you to control the same number of shares with much less capital.

3. Improved Opportunities for Diversification - Since options contracts are way cheaper, when compared to the underlying asset, you can be exposed to multiple assets and asset classes.

4. Win-Win - Contrary to what most people say, Options trading is not "I win at your loss". Most options contracts are written by people looking to hedge their long term positions, and limit their market risk. They are insuring themselves against the risk of market volatility, and by trading in options you're essentially absorbing their market risk for a premium.

 

 Disadvantages Of Intraday Options Trading 

1. Low Liquidity - Options contracts, while priced way lesser than the underlying asset, can also suffer from limited liquidity. This leads to a wider bid-ask spread, leading to higher chances of lesser than optimal profitability.

2. Price Movement Reductions - Even if the stock/underlying asset moves favorably, the extent of such price movement can be undermined by the nearing expiry (recall time decay/theta). However, when day trading with options, the time value shouldn't be an issue as you're literally holding a position for a day, at the very max.

 

 How To Get Started with Intraday Options Trading 

This is one of the popularly asked questions, that we here at Goodwill get from time to time.

 

How to Get started with intraday Trading? Isn't Options Trading risky?What are the pre-requisites that I need to have before I begin my journey of trading options intraday?

 

Here's everything you need to know to begin your Intraday Options Trading Journey.

 

 Open Trading and Demat Account 

The first thing you need to do when you begin your options trading journey is to open your free Demat and trading account online. Different brokers have different fees, and regulations and it is best for you to do your own research and choose what's the best for you.

 

One of the best Options Trading Brokers - Goodwill Wealth Management Pvt Ltd. offers the best trading and Demat account online for absolutely free. Goodwill allows you to trade/invest in equities, mutual funds, futures and options, ETFs and Commodities - all from a single margin.

 

Here are some of the benefits that you can enjoy, should you choose to open a free trading account online with Goodwill.

1. Lowest Brokerage Ever - Flat INR 11 per intraday trade or 0.02%, whichever is lower, across all segments.

2. Free Multilingual Support - Language should not be a barrier for your successful trades. Don't miss out on important trading information and support due to language!

3. Free Real-time Research Calls - Join Goodwill to enjoy free real time research support from experts in the field.

4. 0 Hidden Charges - Opening Demat and Trading account is completely free. Annual Maintenance Cost is waived off for the first year.

5. Higher Exposure for Options Trading - Goodwill offers high levels of exposure for options writing. Used in combination with our real time research calls and expert support - sky is the limit for profitable trades.

6. Free Trainings and Webinars - Don't know how to use the different financial instruments differently? Don't worry - Goodwill has got you covered.

7. Access to Advanced, Free Tools - Along with access to state of the art mobile app - GIGA, you get access to free charting tools and research platform, enabling you to take informed decisions for decisive trades.

8. Free Intraday Tips delivered to your phone- Access to highly-rated, free intraday tips with an amazing track record, delivered right at your finger tips.

 

 How do I Open a Trading and Demat Account with Goodwill? 

Opening a trading and Demat account online is effortless with Goodwill. Fill out your KYC here, and wait for us to do the rest!  

 

Step 1: Enter The Required Personal Details.

Step 2: Fill Pan no, Date of Birth, Aadhar Number and the other required details.

Step 3: Fill Communication Address.

Step 4: Upload the necessary Documents

Step 4.5: Documents that you'll need - PAN card, Passport Size Photograph, Aadhar Card, Latest Salary Slip/Latest ITR/Bank Statement going back six months.

Step 5: E-Sign and complete the KYC process - Your account will be open for trading shortly.

 

That's it, 5 simple steps, and you're well within your journey to begin employing the best intraday options strategies that you've learned through the resources that we'll mention in the next section.

 

Where do I learn The Best Intraday Options Trading Strategies?

For you to pick out the best intraday options trading strategies online consistently, it is necessary that you develop a trading system based on some of the popular trading strategies. Different trading strategies vary in complexity, and the time taken to learn, and a good training resource can go a long way in helping you make your trades successfully. Goodwill offers training programs to all our clients, along with calls and webinars to help you generate wealth.

 

 

The derivatives market is one of the most profitable markets (definitely the largest) in the world. However, before making trades or investments, make sure you read all the related documents, and understand the associated risks.

 

What are you waiting for? Open a free Demat and Trading accounts now, and get started with your Options trading journey.

 

Where Can I Get Stock Market Training In India? Which One is the Best?

Unless you've been living under a rock for the past 200 years (an incredible feat, no doubt), you'd have definitely heard about the many benefits of investing in the share market. Often, these stock markets are often touted as the best way to generate wealth in the long run. 

However, once we decide to take the plunge, and begin trading or investing in the stock market, it is quite easy to get overwhelmed with all the nuances.

Alternatively, worse still, we all have that one person in our close circle, who has burnt their hands dealing with the stock market which instills fear in the rest of us.

While it is true that the share market is an extremely lucrative place to generate wealth, going completely blind may sooner lead to losses than you'll expect. Where do we learn the secrets of generating wealth consistently?

This is where some of the best stock market training programmes help us immensely.

In this article, we'll go through some of the best (and some, not so recommended) methods to earn consistently in the Stock Market. But first, let's cover the basics.

 

Benefits of Investing in the Stock Market

The Share market, without a doubt, is one of the best ways to generate wealth in the long run consistently. Historically, equity returns have been much better than other cash/fixed-income investments such as fixed deposits, gold or even government issued bonds.

 

In fact, Equity investments are seen as the perfect vehicle to beat inflation consistently year-on-year, and mitigate the effect of inflation over a period of time. A significant number of companies also pay dividends consistently, acting as a source of cash flow, even without selling off the initial investment.

The most important attribute of equity shares, is its ability to outperform inflation rates of our country consistently, making it an amazing instrument to protect against the decreasing time value of money.

How To Invest in The Stock Market

Investing in the Stock Market as an Indian is straightforward. All you need to do is open a free Demat and Trading account with a reputed stockbroker, registered with the Securities and Exchange Board of India (SEBI). Here's the simple 5 Step process to open Demat account online.

Open Trading Account Online India

1. Head on over to the Goodwill site to open a Free Demat account online. Enter your personal details, like name, contact information and email ID.
2. Once done, you'll be asked to fill in your PAN number, date of birth and Aadhar number on the next page.
3. You'll then be required to give your contact address - the address should match the address proof that you submit.
4. Upload the Necessary Documents. Here's a list of the mandatory documents that you'll need to upload to complete the eKYC process:
1. PAN Card and Passport size photograph
2. Identity Proof - PAN card/Aadhar Card.
3. Address Proof - Passport/Driving Licence/Aadhar Card/Bank Statement/Utility Bills.
4. Income Proof - Salary Slip/ITR/Bank Statement (going back 6 months).
5. E sign, and complete the In Person Verification (completely online, despite being called IPV).

That's that. Wait for us to work our magic, and create your credentials for you to begin your investment/trading (or both) journey.

Best Share Market Training In India

Goodwill's Webinars - Best Share Trading Training in India

Goodwill understands that for long term success in share markets, consistent educational knowledge sharing/training programs are absolutely essential. Here, at Goodwill, training is never ending, and is considered as an ongoing process that runs parallel to our investing/trading efforts.

All investors and traders do have a smart and sharp brain that's necessary to generate wealth in the stock market. The major bottleneck that we've observed is for traders to execute their trading and investment plans.

At Goodwill, your training will start with a thorough understanding of your different financial goals and objectives. We've come to realize that a trading/investing system is only as strong as the reason the system was established in the first place. The ulterior motivation fuels people to learn the necessary basic skills, and take the necessary action to generate wealth consistently in the long run.

We guarantee that you'll receive appropriate training and guidance till you're ready to venture into the financial markets independently.

The Goodwill Promise

1. Our Trainers are quite literally, the best in the industry.
1. We'll truly understand what you require
2. We'll prioritize sessions based on what's truly important.
3. We'll provide sound, unbiased advice.
4. We'll focus on delivering actionable results.
2. We provide up-to-date courses about the Indian Financial Market at absolutely 0 cost to you. This course will cover
1. Indian Stock Market Basics
2. Derivative Trading
3. Trading Strategies
4. Technical Analysis

YouTube

YouTube is quite literally a goldmine for amateur investors. The knowledge base contained here is quite literally inexhaustible, but like a literal goldmine, you'll have to dig a lot to arrive at the actually important videos. There are plenty of great Creators out there (ourselves included, check our channel out here).

However, on the flip side, there are plenty of scam artists and content creators who give out financial advice without having a basic understanding of the foundational concepts. If you strike out and follow the advice of someone who shouldn't be trusted, you might end up losing your hard-earned money.

Even if you do luck out, and find an amazing resource on YouTube, there is no one comprehensive guide which covers all the necessary skills and strategies that you need to know. In other words, you need to know what you're looking for beforehand, if you're to have any degree of success on YouTube. Personalized content, curated to suit your specific needs and requirements is not possible, unless you hire an expert to curate a list of videos/content for you to watch.

 

Stock Market Coaching in India

Another noteworthy avenue to pursue education when it comes to stock markets is to avail services of personalized coaches. Share Trading Training in India is an extremely common service offered by many professionals in the industry - and if cost is no concern, perhaps the best way to learn the secrets of stock market trading in India. However, like YouTube, there is no real way to judge the credibility of any particular coach, at least to an extent where you can trust your hard-earned money to follow their advice.

There are plenty of good coaches out there, who could teach you everything you need to know - starting from the basics of trading to little tips and tricks that will help you truly master the art of trading. One of the main advantages that these personalized coaches offer is the fact that they can customize your learning experience, and curate the topics that you learn based on what you need, and what your current level of understanding of the stock markets is.

 

However, as you may expect, personalized coaching doesn't come for free. In fact, it is one of the costliest methods when it comes to learning stock markets - and quite rightfully so. If you've the money to spend to afford personalized coaching from reputed trainers and traders - then sure, it's the perfect way to start. 

 

Demo Trading

Does it surprise you that one of the most commonly asked questions in Google, when it comes to the subject of learning the secrets of stock market is "What is Demo Trading in India?". Demo trading is often touted as one of the best ways to learn stock market trading strategies. Is that really the case?

 

Many financial institutions offer a demo trading account for their clientèle. After opening one, you'll get access to the full features of a demat and trading account - except for the fact that none of the trades would be real, and all transactions would be effected using paper money (virtual money, non-existent money, dummy money - you name it - however they brand it as).

 

Theoretically, it would allow the demo-account holder to test out how the market functions, without having to invest any real money into it. On paper, it would give the beginners the required knowledge and confidence to begin trading with real money.

 

Here, at Goodwill, we don't believe in the concept of Demo Trading, and do not offer a demo trading account to our clients. Without actual money involved, beginners will tend to have the "nothing to lose" mentality, and tend to take risky decisions. The biggest mistake beginners tend to make is the tendency to make emotional decisions. Having a demo account makes the matter worse, and destroys the confidence of novice traders when they don't replicate the results that they achieved in the demo trading system.

Here, at Goodwill, we strongly do not recommend using demo trading accounts. If stock market experience is what you're after - you can always start small. Invest a few hundred bucks that you are completely comfortable with losing, and begin trading - you'll get the actual experience you need, much better than the simulated experience you gain from a demo trading account.

 

What are you waiting for? Open a free demat and trading account online with goodwill, and begin your trading journey now. If you're looking for knowledge, head on over to our webinar page, and register yourself for the next session now! 

Where Should I Invest Large Amount Of Money In India

Investing money for the long run is a surefire way to generate enough wealth to attain financial freedom or work towards a particular financial goal. Whether it's your retirement, or a year-long vacation in Cancun, it's pertinent that you stick to your investment regime till you attain your financial goals.

 

While SIPs are an amazing way for a beginning investor to get started on investments, investing a large amount of money directly in the different instruments available can also prove beneficial. If you have a windfall, or a lump-sum saved up, and are wondering how to invest large amount, don't worry - you are in the right place.

 

Before going into the details of where you should invest money in India, you should understand certain basic principles first. For instance, while investing a lump-sum amount, it is important that your portfolio is diversified a bit to ensure that your risks are hedged to a manageable level. Here are some of the key principles that you'll need to follow before beginning your investment journey.

 

1. Understand your risk-profile - The quantum of risk that you're willing to take with your investments is usually defined by your risk profile. For instance, equity investments are considered to be a risky instrument, while government bonds and Fixed Deposits are considered relatively safe.
2. Understand Your Financial Goals - Long term investments usually happen to reach a certain financial goal. Whether it's your retirement, or the purchase of your dream house - you'll need to define your goal monetarily, along with an understanding of when you'll need the money.
3. Your risk profile will directly depend on your financial goal, and the time frame. The longer the time frame (and higher the percentage of money necessary to be earned), the higher the risk you should be willing to take. As the goal gets closer, both monetarily and in terms of the time-frame, your risk profile should naturally levitate to some of the safer instruments, in an effort to safe-guard your investments.
4. Try not to put all your eggs in one basket. Keep your portfolio diversified. This will minimize your exposure to any one type of risk - for instance, even if the Equity market is on a bear run, your debt instruments and gold bonds will continue to rake in money.

 

Now that we've understood the basics, let's now go into the different instruments that you can utilize for investing a lump-sum.

 

Share Markets- Equity

Equity Investments are considered to be one of the most attractive forms of investments in India. When you invest money online in Equity shares of a company, you're essentially buying into the ownership of the company. Each stock represents a share of ownership, and if the business you've invested in performs well over time, the value of your investments are bound to increase.

 

The short term volatility is high, and there is a non-insignificant risk that your principal gets wiped out - the reasons why the equity market are considered risky. However, the upside potential is also high - 17% returns per annum, on average (as of 2017). In comparison, when you invest money in FD (Fixed Deposits), you can expect an average return of around 5%, and the annual inflation rate in India is somewhere around 7%. You do the math.

 

It is no surprise that the percentage of share market investment in India is gradually growing year-on-year, thanks to increased financial literacy levels in our country.

 

Share Market - ETFs

ETFs or Exchange Traded Funds are becoming extremely popular in the recent times. ETFs are a type of financial security that passively tracks any index, asset class, sector, or a commodity, and can be traded/purchased/sold in a stock exchange just like an equity share can be.

Different ETFs can track different indices, or even asset classes. For instance, the SBI Nifty 50 ETF tracks the performance of the NIFTY 50 Index, while Gold BeES tracks the performance of gold as an asset class.

 

Market risk is the biggest thing you've to worry about when it comes to ETFs, as short term volatility can tempt you to take a loss, and withdraw money prematurely. The risk is directly dependent on the underlying asset/sector/index. For instance, the Gold BeES are considered relatively less risky, as compared to say an ETF which tracks the automobile sector in India.

 

Debt Instruments

Debt instruments are the asset classes that require a fixed payment to the asset holder, usually along with interest. The institutions/companies/organizations that issue debt instruments borrow your funds, and in turn, are obligated to pay you back the principal after a set amount of time, along with a fixed rate of interest. The rate of interest depends on the organization issuing the debt instrument.

 

Even if you haven't made any huge steps into your personal finance yet, you've probably already invested in debt instruments. For instance, when you invest money in FD, you're essentially purchasing a debt instrument. The bank has to pay you back the principal, along with a fixed rate of interest, usually around 5-6%.

 

Debentures, company deposits, public provident funds, National Savings Certificates, etc are some of the most popular debt instruments in India.

 

When compared to equity investments, the risk element involved is definitely less. Some debt instruments are considered safer than others - for instance, company deposits are considered riskier than say, investing in the National Savings Certificate. In most cases, you'll get at least your principal back, but there is definitely a non-insignificant risk of default.

 

Mutual Funds

If you don't have the time or resources to research individual shares, or debt instruments, you can choose to entrust your money to professionals who will invest in your stead. Professional investors, managed by prominent Asset Management Companies (and regulated by the Securities and Exchange Board of India), will pool the funds from many other retail investors, and come up with a strategy to invest in the different instruments. In return for investing your money for you, conducting regular research and coming up with stocks to invest in, the asset managers charge a small percentage as a fee.

 

There are many different types of Mutual funds in India, and are classified based on multiple criteria. This could be the level of involvement of asset managers (active funds, and passive funds), market capitalization of the companies involved (large cap, mid cap, small cap and hybrid funds), instrument invested in (equity funds, debt funds), or tax savings benefits (Equity Linked Savings Schemes, and other funds).

 

Irrespective of the type of mutual funds, all mutual funds investments are subject to market risks. Investors are advised to thoroughly read all the scheme related documents, understand the risks involved before investing.

 

Investing In Gold

In India, you can't visit a single household without someone asking you to invest money in physical gold. Gold is almost "holy" so to speak, and is the investment instrument of choice for many individuals, despite there being many "better" alternatives available (speaking purely from an investment perspective). Gold has returned an average of 5.7% CAGR (Compound Annual Growth Rate) over the last decade, despite being considered less risky than some of the other instruments available.

 

However, there are also other costs involved in investing in physical gold. The making and wastage charges eat away a significant percentage of your investments, lowering your already low returns on investment.

 

"But, how else do I Invest my money in Gold?". We hear you. The Government has heard you as well. The Government has come up with special instruments called "Sovereign Gold Bonds", which allow you to invest money in gold, without the handling or wastage charges. When you invest money in gold bonds, not only are you exposed to gold as an asset class, the government also pays you a hefty 2.5% simple interest on your investment per annum (making gold a relatively attractive alternative for risk averse individuals).

 

However, the Indian sentiment towards gold jewelry shouldn't be undermined. The ornaments also have other functions, which aren't covered in this article - this post purely looks at physical gold from an investment perspective.

 

Investing In Real Estate

Real Estate Investment in India is another popular vehicle to grow wealth in the long run. Real Estate here doesn't only mean investing in houses for you to live in. It can also involve commercial real estate (extremely lucrative, with a high barrier to entry), and real estate investment trusts (funds that invest in real estate on your behalf - think of REITs as mutual funds for real estate).

 

The Indian Real Estate market is considered to be extremely lucrative, with expected valuations to reach over $1 trillion by 2030. However, the value of the property depends on many factors, including the location, condition, and quality of the real estate asset purchased.

 

The returns gained from real estate investments are two fold.

1. The Capital Appreciation of land and buildings, over a period of time.
2. Rental Income gained.

 

The main barrier to investing in Real Estate is that there is a high cost to entry. Depending on where you're purchasing, a half-decent apartment can cost you north of INR 1 crore easily.

 

Alternate Investments

If you're particularly wealthy, and want to diversify your portfolio even wider, alternate investments like vintage cars, valuable paintings, pieces of art, NFTs and cryptocurrencies come to mind. Keep in mind that these investments are considered particularly risky, and are not advisable unless you know what you're doing. If you're a beginner investor, it is highly recommended that you stay away from alternate investments.

Cryptocurrencies in particular have gained in popularity over the last couple of years. However their volatility and the number of scam and memecoins involved make it particularly risky for amateur investors to start investing in them.

 

How to Invest in These Different Asset Classes?

Different asset classes require a different method of investments. For instance, for purchasing physical gold, you'll have to visit a gold smith, real estate, you'll have to meet with the seller, and in the case of equity shares, you'll have to open a Demat and Trading account. While we can't provide you the details of the best place to purchase real estates from, we can surely tell you where you can invest money online - through Goodwill.

Goodwill Wealth Management is a well reputed name in the brokerage industry, and offers you the ability and the tools to purchase a variety of assets. Whether you want to invest in mutual funds, IPOs, Pre-IPOs, equity shares, REITs or even ETFs - all you need to do is open a free Demat and TradingAccount online. Goodwill assures you access to all these different instruments at a very low cost - Equity delivery, for instance, is completely free! What are you waiting for, sign up with Goodwill now!

Currency Trading Online India - Top 15 Things You Need To Know

Investing in Foreign Exchange is becoming more lucrative with every passing day. With growing awareness of the different financial instruments and tools available, trading in currency pairs can be used to great effect. Currency derivatives are often looked at as an excellent asset class that is perfect for diversification, along with providing other hedging benefits.  

If you're new to the world of Currency Trading, don't worry, this blog post will educate you on everything you need to know. 

15 Things About Currency Trading Online India

What is Currency Trading?

Being the single largest investment market in the world, with a whopping $4 trillion transacted on a daily basis, the currency market is the home to a lot of traders looking to trade and generate profits. Currencies are usually traded in two different markets.

1. Spot Market / Cash Market - Where you physically buy/sell currencies for cash.

2. Derivatives Market - The most common avenue for Currency trading in India. This is the most common method utilized to trade in currency pairs in our country.

 

Currency trading happens through financial instruments called derivatives. Derivatives are contracts that allow users to purchase/sell the underlying asset (in this case, currencies), at an agreed upon date and price.

Furthermore, these derivatives can be classified into two categories - Futures, and Options. While a futures contract gives the holder the obligation to purchase/sell the underlying asset at the agreed upon price, an options contract gives the holder the choice to purchase/sell the underlying asset at the agreed upon price.

Most participants in this market are speculators. They don't actually take delivery of the currency, but rather settle the transaction before the expiry date. Usually, participants tend to gain/lose money based on the prices of the futures/options contract. In the industry, this type of transaction is called "cash-settled" transactions.

Is Currency Market truly Open 24/7?

Yes, and no. The currency markets usually operate in different sessions - European Session, Asian Session and the United States Trading session. There are a few overlaps between the three sessions, but the main currencies of the different countries are only traded during the active hours of their respective sessions.

For instance, currency pairs based on the GBP will have more volume during the European session, while currency pairs involving the USD will be more actively available during the United States Trading session.

 

What Is A Currency Pair?

Now that you have a solid understanding of what derivatives mean, it is time to look at the most important aspect of currency trading - the currency pair.

In a foreign exchange market, a currency pair can be defined as the price of one currency, as quoted against the other currency. There are two components to a currency pair - the base currency and the quote currency.

Base Currency - The first currency that appears in the currency pair quotation.

Quote Currency - The second currency that appears in the currency pair quotation.

 

Let's take a GBP/INR pair for instance, which is quoted at say, 102.

 

In this instance, GBP - Base currency, INR - Quote Currency. The number 102 refers to the units of the quote currency that is required to purchase a single unit of the base currency.

 

In this instance, the quote should be read as, 102 INR is required to buy 1 GBP.

 

Usually, each currency in a currency pair will be referred to by their ISO abbreviations, where the first two letters represent the country, and the last letter describes the currency.

 

Why Is Currency Trading So Predominant?

The $4 trillion transaction value in the foreign exchange markets surely make you wonder "why is currency trading extremely lucrative?". With the rapid advancements in technology and infrastructure, importing and exporting of goods and services have become common. These import/export transactions usually take several days to complete, during which time they will be exposed to fluctuations in the currency values.

Importers/exporters use these currency derivatives to help them hedge against these risks - one of the many benefits of currency trading in India. In other words, they put out futures contracts that would enable them to sell their currencies at a fixed price, after the whole transaction is completed.

This creates opportunities for traders who can spot a good deal. If the currency increases in value in the meanwhile, the traders can pocket the increase, which, in many's eyes, is worth the risk taken.

 

Who Are the Major Players in the Currency Trading Market?

Traditionally, the currency market was dominated by institutional investors and import/export companies hedging their bets against currency volatility. The Central banks of different countries, (The Reserve Bank of India, in our case) tend to exert influence from time to time, to uphold the value of their respective currencies.

 

However, with the rapid growth of internet technologies, and growth of leading brokerage platforms like Goodwill, retail interest has significantly increased in the currency market. 

 

Do I Need To Open A Demat Account For Currency Trading in India?

Demat Account is used only when you take actual delivery of the assets involved. In India, since the Foreign Exchange trades are cash settled - i.e, there is no physical delivery of the associated currency, there is no need for you to open a Demat account.  However, a trading account is required to execute all your currency trades.

However, if currency trading is just one of your many avenues of generating wealth, you should perhaps consider opening a Demat account nonetheless. While there are many platforms that you can consider, Goodwill is hands down the best platform that you can choose to open free demat and trading accounts online.

How to Open Currency Trading Account Online

Opening a currency trading account online is effortless with Goodwill. Fill out your KYC here, and wait for us to do the rest! 

 

Step 1: Enter The Required Personal Details.

Step 2: Fill Pan no, Date of Birth, Aadhar Number and the other required details.

Step 3: Fill Communication Address.

Step 4: Upload the necessary Documents

Step 4.5: Documents that you'll need - PAN card, Passport Size Photograph,                                                     Aadhar Card, Latest Salary Slip/Latest ITR/Bank Statement going back six months.

Step 5: E-Sign and complete the KYC process - Your account will be open for trading shortly.

 

That's it, 5 simple steps, and you're well within your journey to invest in the top currencies in India.

 

Why Should I Open An Account With Goodwill

We understand, you're sceptical about us as the self-proclaimed "best currency trading broker in India". But we assure you, our clients call us that only because of the 100% satisfaction that we're able to provide them with our services. Take a quick sneak peek at some of the services we offer:

 

The Goodwill Advantage:

1. Goodwill makes it super simple for you to open an account and begin trading. 5 simple steps, and you're all set to begin trading.
2. Expert guidance to help enrich your knowledge - in best investment and trading practices.
3. The currency market is open 24/7 - so is our platform. You can trade at your fingertips with Goodwill's Next Gen Trading App - GIGA. Get access to the state of the art web trading platform, and desktop app, along with GIGA, all with your free Demat and Trading account.
4. Don't have access to the internet? don't worry, take advantage of our call and trade facility to truly stay connected to the markets.
5. Hassle-free, timely support guaranteed to all Goodwill clients.
6. Option to trade in currency futures, currency options to inter-currency trading.
7. Flexibility to trade across all exchanges - MCXSX-CD & BSE-CD
8. No Separate Investments Required - Make use of our single margin account. Utilize margins and collaterals across Equity, Futures and Options, and Currency Segments.

 

Oh, did we mention the advanced trading and charting tools that come with the Goodwill account? Go ahead, give us a try, and see if you don't believe we're the best currency trading platform online in India.

 

How to do Currency Trading In India?

Once you've opened your Forex Trading account, you're required to deposit a margin account that will be utilized to make trades. Once Goodwill completes the verification of your KYC, we will share with you the credentials for your trading account. There are multiple methods and strategies that are involved in trading currency pairs. Learning how to make, say, daily Fibonacci pivot trades can take quite some time and effort to understand truly and grasp the concepts.

 

Amateur traders in the Forex market usually start with Scalping - where retail traders attempt to make multiple small trades (with multiple small profits through the day). Another strategy which is popularly employed is called the positional trading strategy, which again, might take a while to understand, and employ to generate profits consistently.

 

Where do I learn Currency Trading Strategies?

For you to pick out the top currency pairs for trading in India consistently, it is necessary that you develop a trading system based on some of the popular trading strategies. As mentioned in the previous segment, different trading strategies vary in complexity, and the time taken to learn, and a good training resource can go a long way in helping you make your trades successfully. Goodwill offers training programs to all our clients, along with calls and webinars to help you generate wealth.

 

The Forex market is one of the most profitable markets (definitely the largest) in the world. However, before making trades or investments, make sure you read all the related documents, and understand the associated risks.

What are you waiting for? Open afree Forex Trading account now, and get started with your Forex trading journey.