Wednesday, May 27, 2015

What is 52-Week High/Low?

Prices of commodities, securities and stocks fluctuate frequently, recording highest and lowest figures at different points of time in the market. A figure recorded as the highest/lowest price of the security, bond or stock over the period of past 52 weeks is generally referred to as its 52-week high/ low.

It is an important parameter for investors (as they compare the current trading price of the stocks and bonds to the highest/lowest prices they have reached in the past 52 weeks) in making investment decisions. It also plays an important role in determination of the predicted future prices of the stock.

Monday, May 25, 2015

PEG Ratio

Popularized by the legendary Peter Lynch, It’s a  ratio that will help you look at future earnings growth  You calculate the PEG by taking the P/E and dividing it by the projected growth in earnings.
  • PEG = (P/E) / (projected growth in earnings)
For example, a stock with a P/E of 20 and projected earning growth next year of 10% would have a PEG of 20 / 10 = 2.

If you have a stock with a low P/E. Since the stock is has a low P/E, you start to wonder why the stock has a low P/E. Is it that the stock market does not like the stock? Or is it that the stock market has overlooked a stock that is actually fundamentally very strong and of good value?
To find that answer, PEG ratio will help. If the PEG ratio is big (or close to the P/E ratio), you can understand that this is probably because the “projected growth earnings” are low. This is the kind of stock that the stock market thinks is of not much value.
On the other hand, if the PEG ratio is small (or very small as compared to the P/E ratio, then you know that it is a valuable stock) you know that the projected earnings must be high. You know that this is the kind of fundamentally strong stock that the market has overlooked for some reason.

Saturday, May 23, 2015

What is IPO

The initial sale of stock by a private company to the public which turns it into a public company. IPOs are typically offered by smaller, younger companies who are seeking to expand through the infusion of capital from the IPO. It can also be done by large privately owned companies looking to become publicly traded.
Most IPOs use the services of an underwriting firm, which helps it determine the type of security to issue. The underwriting firm also helps select the price and timing for the IPO.
The initial day of trading as well as the near term can see huge swings in price.  For small private investors, this makes IPOs tough to predict and highly risky for small investors. Most companies with an IPOs are going through a transitory growth period, which adds to the  uncertainty regarding their future values.

Wednesday, May 20, 2015

Online Trading

Online trading is nothing but trading via the Internet with the help of trading software provided by the broker. But for many of us this trading platform can be very confusing. You can also transfer funds online from your bank account to your share trading account with the click of a button.
The advantages of using online trading are:
  • Fully automated trading process which is broker independent.
  • Access to advanced trading tools to perform technical analysis
  • Investors have direct control over their trading portfolio.
  • Ability to trade multiple markets and/or products. You can trade in BSE / NSE.
  • Real-time market data.
  • Faster trade execution.
  • Easy to operate and manage account
  • No geographical limits i.e. you can be anywhere in the world you can invest in Indian share market through online trading platforms.

Monday, May 18, 2015

Types of Price Gaps

Common gaps: Common gaps are ‘common’ and ‘uneventful’. If a Gap is formed when the markets are moving in a narrow range, it is called a Common Gap.

Breakaway Gaps: A “breakaway” gap ends a consolidation pattern and happens as prices break out. Often, they would be accompanied by huge volumes. Break-out Gaps are generally not filled for a long time, i.e. in the case of an uptrend, the price does not fall back to wipe off the gains. They may be filled as and when the prices retrace after a substantial up move. If the breakout happens to be a downtrend, the prices may not rise soon to wipe off the loss.

Runaway Gaps:Runaway gaps are best described as gaps that are caused by increased interest in the stock. For runaway gaps to the upside, it usually represents traders who did not get in during the initial move of the up trend and while waiting for a retracement in price, decided it was not going to happen. Increased buying interest happens all of a sudden, and the price gaps above the previous day’s close. This type of runaway gap represents an almost panic state in traders. Also, a good uptrend can have runaway gaps caused by significant news events that cause new interest in the stock. Runaway gaps can also happen in downtrends. This usually represents increased liquidation of that stock by traders and buyers who are standing on the sidelines. These can become very serious as those who are holding onto the stock will eventually panic and sell – but sell to whom? The price has to continue to drop and gap down to find buyers. So, in either case, runaway gaps form as a result of panic trading.

Exhaustion Gap: An “exhaustion” gap occurs at the end of a price move. If there have been two or more gaps before it, then this kind of gap should be regarded very skeptically. A genuine “exhaustion” gap is filled within a few days to a week. It is generally not easy to distinguish between the Runaway and Exhaustion Gaps. Experience in reading charts will help in due course. The best clue available is that Exhaustion Gaps are not the first Gaps in the chart, i.e. they follow the Runaway Gaps and usually occur when the runaway Gap is nearing completion. Exhaustion Gaps do not indicate whether the trend will reverse, they only call for a halt in the price movement.


Friday, May 15, 2015


Forex is a commonly used abbreviation for "foreign exchange," and it is typically used to describe trading in the foreign exchange market by investors and speculators. For example, imagine a situation where the U.S. dollar is expected to weaken in value relative to the euro. A forex trader in this situation will sell dollars and buy euros. If the euro strengthens, the purchasing power to buy dollars has now increased. The trader can now buy back more dollars than they had to begin with, making a profit. It is similar to stock trading. A stock trader will buy a stock if they think its price will rise in the future and sell a stock if they think its price will fall in the future. Similarly, a forex trader will buy a currency pair if they expect its exchange rate will rise in the future and sell a currency pair if they expect its exchange rate will fall in the future.

Wednesday, May 13, 2015

World's Currencies

Afghanistan - Afghani
Albania - Lek
Algeria - Dinar
Andorra - Euro
Angola - New Kwanza
Antigua and Barbuda - East Caribbean dollar
Argentina - Peso
Armenia - Dram
Australia - Australian dollar
Austria - Euro (formerly schilling)
Azerbaijan - Manat
Bahamas - Bahamian dollar
Bahrain - Bahrain dinar
Bangladesh - Taka
Barbados - Barbados dollar
Belarus - Belorussian ruble
Belgium - Euro (formerly Belgian franc)
Belize - Belize dollar
Benin - CFA Franc
Bhutan - Ngultrum
Bolivia - Boliviano
Bosnia and Herzegovina - Marka
Botswana - Pula
Brazil - Real
Brunei - Brunei dollar
Bulgaria - Lev
Burkina Faso - CFA Franc
Burundi - Burundi franc
Cambodia - Riel
Cameroon - CFA Franc
Canada - Canadian dollar
Cape Verde - Cape Verdean escudo
Central African Republic - CFA Franc
Chad - CFA Franc
Chile - Chilean Peso
China - Yuan/Renminbi
Colombia - Colombian Peso
Comoros - Franc
Congo, Democratic Republic of the - Congolese franc
Congo, Republic of - CFA Franc
Costa Rica - Colón
Côte d'Ivoire - CFA Franc
Croatia - Kuna
Cuba - Cuban Peso
Cyprus - Cyprus pound
Czech Republic - Koruna
Denmark - Krone
Djibouti - Djibouti franc
Dominica - East Caribbean dollar
Dominican Republic - Dominican Peso
East Timor - U.S. dollar
Ecuador - U.S. dollar
Egypt - Egyptian pound
El Salvador - Colón; U.S. dollar
Equatorial Guinea - CFA Franc
Eritrea - Nakfa
Estonia - Kroon
Ethiopia - Birr
Fiji - Fiji dollar
Finland - Euro (formerly markka)
France - Euro (formerly French franc)
Gabon - CFA Franc
Gambia - Dalasi
Georgia - Lari
Germany - Euro (formerly Deutsche mark)
Ghana - Cedi
Greece - Euro (formerly drachma)
Grenada - East Caribbean dollar
Guatemala - Quetzal
Guinea - Guinean franc
Guinea-Bissau - CFA Franc
Guyana - Guyanese dollar
Haiti - Gourde
Honduras - Lempira
Hungary - Forint
Iceland - Icelandic króna
India - Rupee
Indonesia - Rupiah
Iran - Rial
Iraq - U.S. dollar
Ireland - Euro (formerly Irish pound [punt])
Israel - Shekel
Italy - Euro (formerly lira)
Jamaica - Jamaican dollar
Japan - Yen
Jordan - Jordanian dinar
Kazakhstan - Tenge
Kenya - Kenya shilling
Kiribati - Australian dollar
Korea, North - Won
Korea, South - Won
Kuwait - Kuwaiti dinar
Kyrgyzstan - Som
Laos - New Kip
Latvia - Lats
Lebanon - Lebanese pound
Lesotho - Maluti
Liberia - Liberian dollar
Libya - Libyan dinar
Liechtenstein - Swiss franc
Lithuania - Litas
Luxembourg - Euro (formerly Luxembourg franc)
Macedonia - Denar
Madagascar - Malagasy franc
Malawi - Kwacha
Malaysia - Ringgit
Maldives - RufiyaMaliCFA Franc
Malta - Euro
Mauritania - Ouguiya
Mauritius - Mauritian rupee
Mexico - Mexican peso
Moldova - Leu
Monaco - Euro
Mongolia - TugrikMontenegroEuro
Morocco - Dirham
Mozambique - Metical
Myanmar - Kyat
Namibia - Namibian dollar
Nauru - Australian dollar
Nepal - Nepalese rupee
Netherlands - Euro (formerly guilder)
New Zealand - New Zealand dollar
Nicaragua - Gold cordoba
Niger - CFA Franc
Nigeria - Naira
Norway - Norwegian krone
Oman - Omani rial
Pakistan - Pakistan rupee
Palau - U.S. dollar used
Palestinian State (proposed) - New Israeli shekels, Jordanian dinars, U.S. dollars
Panama - balboa; U.S. dollar
Papua New Guinea - Kina
Paraguay - Guaraní
Peru - Nuevo sol (1991)
Philippines - Peso
Poland - Zloty
Portugal - Euro (formerly escudo)
Qatar - Qatari riyal
Romania - Leu
Russia - Ruble
Rwanda - Rwanda franc
St. Kitts and Nevis - East Caribbean dollar
St. Lucia - East Caribbean dollar
St. Vincent and the Grenadines - East Caribbean dollar
Samoa - Tala
San MarinoEuro
São Tomé and Príncipe - Dobra
Saudi Arabia - Riyal
Senegal - CFA FrancSerbiaYugoslav new dinar. In Kosovo both the euro and the Yugoslav dinar are legal
Seychelles - Seychelles rupee
Sierra Leone - Leone
Singapore - Singapore dollar
Slovakia - Koruna
Slovenia - Slovenian tolar; euro
Solomon Islands - Solomon Islands dollar
Somalia - Somali shilling
South Africa - Rand
Spain - Euro (formerly peseta)
Sri Lanka - Sri Lanka rupee
Sudan - Dinar
Suriname - Surinamese dollar
Swaziland - Lilangeni
Sweden - Krona
Switzerland - Swiss franc
Syria - Syrian pound
Taiwan - Taiwan dollar
Tajikistan - somoni
Tanzania - Tanzanian shilling
Thailand - baht
Togo - CFA Franc
Tonga - Pa'anga
Trinidad and Tobago - Trinidad and Tobago dollar
Tunisia - Tunisian dinar
Turkey - Turkish lira (YTL)
Turkmenistan - Manat
Tuvalu - Australian dollar
Uganda - Ugandan new shilling
Ukraine - Hryvna
United Arab Emirates - U.A.E. dirham
United Kingdom - Pound sterling (£)
United States - dollar
Uruguay - Uruguay peso
Uzbekistan - Uzbekistani sum
Vanuatu - Vatu
Vatican City - Euro
Venezuela - Bolivar
Vietnam - Dong
Western Sahara (proposed state) - Tala
Yemen - Rial
Zambia - Kwacha
Zimbabwe - Zimbabwean dollar

Friday, May 8, 2015

Technical Analysis: Price GAP

A gap is an area on a price chart in which there were no trades. It is easy to see gaps if you take candle stick charts. Let us try to understand gaps in another way. The fluctuations in stock prices are coherent in nature. That means that the price rises or falls gradually.  Thus, in rising scrip, if on one day the low was Rs 100 and the high was Rs 135, on the next day the low would be Rs 130 and the high Rs 140. Here, the low for the next day falls within the high-low range of the previous day. But suppose for the second day, the low was Rs 145 and the high Rs 150. Then, the low for the next day has fallen above the previous day High-Low range, or it was higher than the previous day’s high. So, when one draws bar charts showing High-Lows every day, there would be a discontinuity, termed as a ‘Gap’ in technical theory. An interesting feature of Price gaps is that it gets filled within a short amount of time. That is, the price would come back to fill the price gap of Rs 140 – Rs145, where there was no trade in the previous days.
In simple terms-a gap occurs when the current bar opens above the high or below the low of the previous bar. On a price chart, a space appears between the bars indicating the gap.

Wednesday, May 6, 2015

Debt Funds

Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills. Gilt fund, monthly income plans, short term plans, liquid funds, and fixed maturity plans are some of the investment options in debt funds. Apart from these categories, debt funds include various funds investing in short term, medium term and long term bonds.
Debt funds are preferred by individuals who are not willing to invest in a highly volatile equity market. A debt fund provides a steady but low income relative to equity. It is comparatively less volatile.