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@stocktalk_in

25 Mar

⭐️ HOW MARKET DEPTH WORKS

🔸 A lot of traders (especially intraday) look at a stock’s market depth table to determine the upcoming moves and accordingly take their BUY / SELL decisions.

🔸 Read below how market depth data can sometimes be misleading and lead to losses

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Here's how most traders read the market depth:

🟢 If there are higher number of buyers (bids) means the stock is in demand and will go up.

🔴 If there are higher number of sellers (offers) means the stock is in supply and will go down.

But that is not how it works.

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🔸 Let’s say, for a given stock the market depth shows as below (1 qty):

- Total Buyers: 50,000

- Total Sellers: 2,000

🔸 Many will interpret this as a high demand stock & expect it to go up.

🔸 But still sometimes the stock rapidly goes down despite more buyers.

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StockTalk

@stocktalk_in

14 Sep 20

📕 HOW CREDIT CYCLE WORKS

One day a man visits a debt ridden hotel.

1⃣ He gives the owner ₹10,000 as advance for booking his one week stay in the hotel.

2⃣ The hotel owner takes the ₹10,000 and goes to pay his debt to his food supplier.

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3⃣ Food supplier rushes to pay the farmer and dairy.

4⃣ Farmer runs to pay the land lord from whom he took a loan for his crop.

5⃣ The land lord rushes to pay the event manager who managed his daughter’s wedding on credit.

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6⃣ The event manager then runs to pay for the wedding event which was hosted in the same hotel.

7⃣ The hotel owner receives ₹10,000 from the event manager.

8⃣ The man who had booked the hotel, cancels his booking and takes a refund of ₹10,000 from the hotel manager.

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Read 4 tweets

StockTalk

@stocktalk_in

1 Sep 20

https://twitter.com/stocktalk_in/status/1300435218537410561

⭐️ SEBI SELLING MARGINS

Here's the logic behind SEBI's new rule to impose margins on selling shares from your holdings.

Say you sell shares from your holdings on Monday.

As per the current settlement cycle of T+2 days, the shares will be debited from your demat on Wed.

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https://twitter.com/stocktalk_in/status/1300435218537410561

But that T+2 days cycle leaves a possibility of you transferring those shares to someone on Tuesday i.e. before the shares are debited from your demat on Wednesday.

This creates a short delivery settlement risk.

Brokers already have systems in place to avoid this.

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But still this might happen for about 5% of the times whereas 95% of the times the settlement is done correctly.

Now, SEBI's new rules will make sure that those 5% cases are also taken care of and the risk is completely avoided.

There's a workaround for this.

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Read 5 tweets

StockTalk

@stocktalk_in

31 Aug 20

📕 #SEBI GUIDELINES FOR MARGINS

1⃣ As per new SEBI rules, buying and selling of shares will require upfront margin.

Eg: If you want to buy shares worth ₹1 lakh then you must have ₹20K margin cash in your trading account & the balance of ₹80K to be paid within 2 days.

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2⃣ If you want to sell ₹1 lakh worth of shares from your holdings then too you must have minimum ₹20K margin cash in your account, failing which penalties will be levied.

You can keep extra cash / or can pledge your other holdings for the stipulated margin required.

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3⃣ Buy Today Sell Tomorrow (BTST) closed.

Shares bought today cannot be sold tomorrow.

Eg: If you bought shares on Monday then you can sell those shares only after recieving the delivery of shares in your demat account i.e. you can sell on T+2 day, Wednesday.

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StockTalk

@stocktalk_in

28 Jul 20

⚡️ #YESBANK RESULTS DECLARED!

FINANCIAL HIGHLIGHTS (Q1-FY21)

🟢 Interest Income: ₹1908 Cr

🟢 Total Income: ₹2529 Cr

🟢 Net Profit: ₹45 Cr

🟢 Interest Margin: 3%

🔴 Advances: ₹1,64,510 Cr

🟢 Deposits: ₹1,17,360

🔴 Balance Sheet: ₹2,55,485

🔴 CASA: 25.80%

⚡️ #YESBANK RESULTS DECLARED!

ASSET QUALITY (Q1-FY21)

🔴 Gross NPA (%): 17.30%

🟢 Net NPA (%): 4.96%

🟢 Provisions (%): 75.10%

🟢 CET-1: 13.40%

🟢 CAR: 20%

🔴 Book Value: ₹14.60

🟢 EPS: ₹0.04

🟢 ROE: 0.8%

⚡️ #YESBANK RESULTS DECLARED!

PRELIMINARY ANALYSIS (Q1-FY21)

🔸 The bank has reported fair result as a starting point post the management reshuffle and moratorium saga of last quarter.

🔸 Biggest issue of capital adequacy is now sorted. The bank is now well capitalized.

Read 5 tweets

StockTalk

@stocktalk_in

27 Jul 20

📕 A Quick Guide on SUPPORT LEVELS & DEMAND ZONES

🔸 Have you ever noticed how a stock quickly moves up after it drops to a certain price level?

🔸 People say "the stock has taken support" or "bounced back from support level"

Let's understand why the bounce happens;

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🔸 The basic logic behind support level (also known as demand zone) is related to how big institutional investors buy shares.

🔸 When institutional investors take a position they have a huge qty of shares to buy & so they want the order to be filled at a particular price.

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🔸 Let's say the stock of XYZ Ltd. is currently trading at ₹525.

🔸 But institutional investors want to buy 5 crore shares of XYZ Ltd. at ₹500.

🔸 So they put in a buy limit order of 5 crore shares at ₹500.

🔸 This order now remains pending in the order book.

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