MTF Pledge vs Margin Pledge: Explained in simple terms. Read now!

Stock trading in the market tends to demand greater amounts of capital than that of a trader who has the cash at hand. It is here that the leveraging tools find their use. Margin Trading Facility (MTF) and share pledging are two strong and widely used tools that enable traders to boost their purchasing power. Although both techniques offer access to additional funds, they operate in distinct manners and are suitable for different types of traders and trading situations.

This article provides an in-depth, yet easy-to-understand, explanation of these two amenities, exploring their definitions, primary distinctions, and when it is optimal to utilise each of them. This manual will assist an investor in knowing how to employ such instruments safely and efficiently to maintain one’s investments. The trader/investor should always know enough before employing such financial instruments so as not to get into potential pitfalls.

What is a Margin Trading Facility (MTF)?

A Margin Trading Facility (MTF) is a unique, SEBI-regulated product that allows traders to buy new shares with very little cash. Another name given to this facility is E-margin or “Pay Later.” MTF permits traders to purchase stocks by paying just a part of the total amount upfront. The broker finances the rest.

Example of Margin Trading Facility MTF:

For instance, if a share costs ₹800 and the leverage permitted under MTF is 4x, then one only has to pay ₹200, and the broker will pay the remaining ₹600. This gives the trader the ability to purchase more shares than they could with their own money. The only difference with MTF is that the pledging of investors’ shares is required, and this must be done within the specified time requirements. The instant a trader purchases shares via MTF, he/she is required to mandatorily pledge them back to the broker. They must complete this task by a deadline, typically 9:00 PM on the same day they acquired the shares.

Read the complete article here: https://bigul.co/blog/stock-market/mtf-pledge-vs-margin-pledge-know-the-difference 

How to Create Zero-Risk Strategies in F&O

Options trading in the futures and options (F&O) market can feel like a rollercoaster—exciting but full of risks. What if you could smooth out the ride and minimise those risks? That’s where zero-risk strategies come in. While no strategy is completely risk-free in the real world, specific approaches can significantly reduce your exposure. In this article, we’ll explore what these strategies are, walk through a practical example, and discuss how to put them into action.

Understanding Zero-Risk Strategies

Zero-risk strategies aim to limit losses while still giving you a shot at profits. They often involve combining call options (the right to buy an asset) and put options (the right to sell an asset) in ways that offset potential downsides. For example, a covered call involves owning a stock and selling a call option against it. If the stock price rises, you might cap your gains, but the option premium you collect cushions the blow. If it falls, you still have the stock, though its value drops.

You can also execute the strategy by selling protective puts. At this point, you acquire a put option for a stock you own. Should the price fall, you may choose to exercise the put and get out at the strike price, preventing your loss from growing. While these approaches aren’t always reliable, they do help traders become more secure when trading options.

Read full article here: https://bigul.co/blog/option-trading/how-to-create-zero-risk-strategies-in-future-and-options

How to Make a Profit Using Bullish Option Trading Strategies?

What is Option Trading?

If you are a beginner and trading in the stock market, you often wonder what option trading is. It’s basically a way to profit from the movement of stock price or Index price by buying or selling contracts at a set price. For example, an options trading for beginners scenario might be buying a call option on Reliance Industries at Rs. 1,400 if you believe its price will rise. If Reliance climbs to Rs. 1,500 before expiry, that call option becomes valuable and you make a profit. This strategy lets you gain from upward price moves with limited risk (the most you lose is the premium paid).

A Few Things You Need To Know Before Diving Into Options

Calls vs. Puts: It is good to know the basics before proceeding with the strategy. In option puts and calls, you would have a call option to purchase a stock at a set price (in case you think the stock will increase), and a put option to sell a stock at a set price (in case you think the stock will decrease). When the terms put option and call options are used, consider calls as the bullish side and puts as the bearish side.

Some traders even use a call and a put together, which they sometimes call an options call put strategy (like a straddle); but for now, we'll focus on straightforward bullish strategies.

When markets are rising, traders use bullish option trading strategies to capitalize on gains. These strategies let you potentially earn money when stocks like Infosys or TCS climb higher. We will look at five common strategies: buying a call (Long Call), Bull Call Spread, Covered Call, Cash-Secured Put, and Protective Put. 

Each one uses calls and puts in different ways to aim for profit. We’ll use real examples with Indian stocks and rupees to illustrate how each option trading strategy works.

Bullish Strategies For The Indian Market

Long Call: This is the simplest bullish strategy. You pay a premium to buy a call option, which gives you the right to buy shares at a strike price. For example, if Reliance is trading at Rs. 1,400, you could buy a Rs. 1,500 strike call option for, say, Rs. 50. This costs you Rs. 50 per share (the premium). If Reliance moves up to Rs. 1,600 by expiry, your call option (which lets you buy at 1,500) is worth at least Rs. 100, so you make a net profit of Rs. 50 per share. The most you risk is the premium paid, and option trading for beginners love this strategy for its simplicity and unlimited upside.

Bull Call Spread: This strategy uses two call options to reduce cost. You buy a call at a lower strike and sell another call at a higher strike. For instance, imagine Infosys is at Rs. 1,400. You buy a Rs. 1,400 call for Rs. 100 and sell a Rs. 1,500 call for Rs. 50. Net, you pay Rs. 50 in premium. If Infosys rises to Rs. 1,500 by expiry, the 1,400 call is worth Rs. 100 and the 1,500 call expires worthless, giving you Rs. 50 profit (Rs. 100 value minus Rs. 50 cost). This caps both your profit and loss but is a popular option trading strategy to boost gains when the stock rises moderately.

Covered Call: If you have shares of a company, then you can sell a call on the stock to earn.For example, you hold 100 shares of TCS at Rs. 3,000. You sell a Rs. 3,200 strike call and collect about Rs. 60 per share in premium (Rs. 6,000 total). If TCS stays below Rs. 3,200 by expiry, you keep the premium and still own your shares. If TCS rises above Rs. 3,200, you must sell your shares at that price, but you still keep the premium. This option trading strategy gives you income in a rising market, though it limits extra gains beyond the strike.

Cash-Secured Put: This strategy is selling a put option on stock while having enough cash to buy the stocks later. For example, if Infosys trades at Rs. 1,400 and you believe it won’t drop below Rs. 1,300, you could sell the Rs. 1,300 put option for Rs. 40 premium. If Infosys stays above Rs. 1,300 by expiry, you keep the Rs. 40 per share premium as profit. If Infosys falls to Rs. 1,200, you must buy 100 shares at Rs. 1,300 (using your cash), but your effective cost is Rs. 1,260 (Rs. 1,300 strike minus Rs. 40 premium).

Protective Put: If you have a stock and you think it will drop then you should buy a Put for the insurance.For example, say you own 100 shares of Reliance at Rs. 1,400. You buy a Rs. 1,300 put for Rs. 30. If Reliance stays above Rs. 1,300, you lose the Rs. 30 premium but still profit from any higher stock price. If Reliance crashes to Rs. 1,200, you can sell at Rs. 1,300 using the put, capping your loss. Protective puts cost a premium but give peace of mind, letting you stay bullish in trading in stock market with limited downside.

Read more here: https://bigul.co/blog/option-trading/how-to-make-a-profit-using-bullish-option-trading-strategies

Top 5 Commodities To Invest In Through The Indian Stock Market

India’s commodity market is no longer the exclusive preserve of large industrial buyers or institutional funds. Supported by electronic, tighter regulation and a surge in digital‐first brokerages, retail investors now enjoy near-instant access to bullion, base metals and energy derivatives. 

This guide explores—in detail and with hard data—the five most liquid commodity segments in India’s stock market and shows you exactly how to invest, hedge and trade them profitably.

How to Invest in the Commodities Market in India? 

Retail participation begins with opening a demat + trading account at a registered broker that offers direct routing to the appropriate exchanges for bullion, energy and base-metal contracts, as well as commodity ETFs. After verification, you receive a unique client code that lets you place orders via web, mobile or API. Clearing and settlement are handled centrally, using risk-based margining to ring-fence counterparty risk. Contracts are cash-settled in rupees, although they align with international commodity benchmarks.

You can invest through:

• Exchange-traded futures (e.g., mini gold, crude oil mini, copper, natural gas) that trade on extended market hours, with small tick sizes and lot values starting relatively low for mini variants.

• Physically-backed ETFs which track spot bullion prices net of expense ratios.

• Bonds and electronic receipts for gold that carry sovereign backing and no storage risk.

• Digital bullion platforms that allow small, regular SIPs in gold or silver, which is securely stored.

• Options on futures contracts in copper or crude oil, offering limited-risk and lower margin entry points.

Margin requirements for most contracts range from 4% to 10% of notional, enabling efficient leverage but also magnifying mark-to-market swings. Beginners should start with mini lots, use bracket orders, and never allow mark-to-market losses to exceed 2% of trading capital per session. Silver trading, crude oil futures, copper futures, natural gas MCX quotes and investing in gold and silver all become straightforward once you combine real-time price feeds with an audited risk plan.

Let's understand the top 5 commodities to invest in the Indian stock market.

Read more here: https://bigul.co/blog/stock-market/top-5-commodities-to-invest-in-through-the-indian-stock-market