How to Open a Trading Account for Futures & Options?

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Market wrap-up (09 SEPT 2015):

– Indian markets closed higher today on the back of positive steps announced by the Chinese government to support their economy. Chinese government has decided to reduce their tax rates which will leave money with the consumers and helps in creating demand for the industry. On the other hand, People’s Bank of China is preparing to go for rate cuts which will provide cheap loans to business and thus will help in boosting economic activity by reducing loan costs (interest rates). China has also planned to create fund to finance stalled (stuck) infrastructure projects.

– Stocks from mining, metal and auto sector led the rally for key indices. Metal & mining stocks surged after China announced measures tostimulate economic growth. Bank stocks were in demand. Telecom stocks jumped after the Union Cabinet approved guidelines allowing telecom spectrum trading. Telecom companies can now share their spectrum (companies get licenses for particular regions and geographical territory) with other companies and can have revenue sharing model based upon this sharing of spectrum.

– Yes Bank has announced to open its centralized operation management and service delivery facility at Chennai, employing 12000 employees in two phases. M&M signed MoU (Memorandum of Understanding) with the Tamil Nadu government to invest Rs 2500 crores in next five years. Hero Moto Corp has started its production facility in Colombia, a first establishment outside India.

– Metal companies went up as China is the biggest consumer of steel, copper and aluminum. Oil companies too gained because of the fact that international crude oil prices moving up. Many Indian firms are involved in the refining process of the Crude oil and then exports them to another countries; higher oil prices will make them earn more revenue.

– Comex Gold and Crude both are expected to take their immediate support levels of USD 1116 and USD 45; closing below the support levels will trigger selling for few more dollars.

– Indian markets went up over positive global sentiments backed by Chinese stock market rally. Chinese markets responded positively to the series of steps taken by their government in order to reduce volatility from the stock markets and push economic growth. China introduced “circuit breaker” system for indexes which was missing earlier. Chinese government has also decided to reduce tax rates in order to push consumption with in an economy.

– Another reason for the markets to cherish is the probable decision of government on removal of STT (Securities Transaction Tax) from the F and O markets. Recently a report has been tabled by a select committee, in which a suggestion has been made to abolish STT from the market. This may turn out as a big relief for the domestic as well as for foreign investors.

– Steel shares led rally in metal and mining stocks after media reports suggested that an Indian government body has found evidence that rising imports of hot-rolled steel products pose a threat to the domestic industry. Government might take some steps in order to support domestic steel producers by increasing duty on imported steel; this will make imported steel expensive and will become in-competitive in domestic markets.

– Tata Power Company rose 4.17% after the company announced that the company is setting up a defence production facility at Vemagal in Karnataka today, 8 September 2015. Over the next one year, Tata Power will make an investment of Rs 450 crore in this unit.

– However, the long term economic view is still weak as Chinese export data falls by 6.1% for the month of August. Japanese economy contracted by 1.2 percent in the quarter ended on June. The decline in Japanese economy is less than the real estimates. US Federal Reserve will have its policy meeting (FOMC Meeting) on September 16 and 17, 2015. Going by the current global macro economic indicators, Fed might delay its rate hike till next quarter. European markets cherished high export and import data of Germany. Germany is the biggest economy of Eurozone.

Market gains on China stimulus hopes; Nifty reclaims 7800 mark.

Markets end on a robust note for the second straight day in a row after signs of stability in Chinese markets & the highest single day gains posted by Japan’s Nikkei boosted investor sentiment which led Sensex to gain 400 points and ends at 25720 and Nifty managed to reclaim 7800 marks gains 130 points to finally settle at 7819.

HEADLINES FOR THE DAY:

  • Telecom stocks surged as Cabinet clears spectrum trading norms.
  • Bank Nifty gains more than 5 pct in two days.
  • Mahindra & Mahindra and HCL plans to invest in Tamil Nadu; Stock gains.
  • Metal stocks moved higher; NMDC surged 8%.
  • Chennai Petroleum rallied on the back of heavy volumes.
  • Tyre stocks were in limelight in today’s trading day; Ceat Ltd, Jktyre gains.
  • Shares of NTPC gains on the back of Block Deal.

KEY STOCKS FOR THE DAY:

  • Hindustan Unilever tanks for the second day as the company sold its bread and bakery business under the brand ‘Modern’ to Everstone Group.
  • YES Bank shares rallied as the bank is planning to set up its largest service facility in Chennai.
  • Jewelry shares moved higher after cabinet approves Gold Monetisation & Gold Bond Schemes.
  • Indiabulls Housing dips in a positive market as the company plans to raise up 600 million dollars from the market.
  • Wockhardt Pharma shares gain today on the media, news that the company received for Alzheimer’s drug memantine hydrochloride.
  • Tara Jewels gains for the second day in a row as company wins new order from Walmart.
  • Shares of TCS gains and ends on a flat to positive note after IT company clarify on visa violation charges in the US.
  • Tata Power had started work started work to set up its Rs. 4.5 billion Defense manufacturing facilities.
  • Kalpataru Power today said that company need board nod to issue securities for up to Rs3bn on a private placement basis.

Stock Tips & Calls For Next Trading Session:

  • Rolta EQ gains in the beginning of the trading day and consolidates for the whole session. More buying seen if able to break it and sustain above it. Buy above 101.50 targets 102.50/103.60/104.70 SL 100.40.
  • Rushil EQ is heading towards its important mark/ resistance, i.e. of 146 above it fresh buying is expected with huge volumes. Buy above 146 targets 147.40/149/150.40 SL 144.40.

NEWS TO BE WATCH OUT THIS WEEK:

  • Watch out for the IIP (India, Industrial Production) numbers this week, i.e. on 11th September 2015 (Friday).

How to Open a Trading Account

For stock & commodity market trading in futures & options an investor or traders first need to open a new trading account with a good broker which can provide Good stock And Commodity Tips for trading. If an investor previously has a trading account for money markets, then only an option & futures trading account is to be opened by giving necessary documents. No Demat account is required for option & futures trading in India does not include any delivery of the securities. Simply a trading account and a money savings bank account are enough to commence trading. A traders can select to trade online (internet based) or the conservative off-line technique. An investor would want to fill in a customer registration form and put forward documents that will confirm his identity, residential address and income details, etc. A passport, voter‟s ID, driving license, ration card etc. are few of the documents for address proof. The Permanent Account Number (PAN) would be necessary for opening a stock & commodity market trading account and is also used as an evidence of identity. The trading members give investors a customer registration kit, which contains all the information & details for opening an account. The traders should read every document carefully, fill in the all necessary information in form and submit them beside with necessary proofs.

Generally the following document is required for the opening a Stock & commodity trading account:-

  • Know Your Client (KYC) form – Document captures the basic information about the trader & investor. Please fill this form properly and strike off blank fields in the form.
  • Risk Disclosure Document – This paper contains important data & information on risks related to trading in the Futures & Option (F&O) Segment of the stock exchanges. Investors or traders should read & understand this document previous to trading on the F&O segment of the Exchange.
  • Power of attorney PoA (non-mandatory) – a vital important document approving your trading member to manage your bank account. The PoA must be specific and not a common one.

For identity proof, residential address proof, income proof:-

  • Two recent passport size photographs.
  • Proof of bank account : any one of the following may be submitted
  • Copy of bank statement.
  • Copy of first page of the bank pass book.
  • A cancelled cheque.
  • Proof of identity: Pan Card, Aadhar, passport etc.

Proof of address: any one of the following:-

  • Passport copy.
  • Voter ID card copy.
  • Copy of ration card.
  • Driving license copy.
  • Bank pass book copy.
  • Electricity bill or telephone bill in the investor‟s name.
  • Leave and license agreement/agreement for sale.

Identity card/document with address, issued by:-

  • Central/state government and its departments.
  • Statutory /regulatory authorities.
  • Public sector
  • Scheduled commercial banks.
  • Public financial institutions.
  • Colleges affiliated to Universities.

Copy of tax return

Copy of salary slip

Bank statement for last six months:-

Originals of the documents should be presented for verification along with the self-attested copies of the documents. Trading, member would assign a Unique Client Code (UCC) to the investor. The traders should place orders and make sure his trades are performed only in the UCC assigned to him.

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