Indian Budget 2013: Highlights

Budget 2013: Highlights

Fiscal deficit:

> Fiscal deficit seen at 5.2 pct of GDP in 2012/13.

> Fiscal deficit seen at 4.8 pct of GDP in 2013/14.

> Faced with huge fiscal deficit, India had no choice but to rationalise expenditure.

Growth:

> Indian economy faces challenge of getting back to its potential growth rate of 8%. India must unhesitatingly embrace growth as highest goal.

Spending:

Total budget expenditure seen at 16.65 trillion rupees in 2013/14.

India's 2013/14 plan expenditure seen at 5.55 trillion rupees.

Non-plan expenditure estimated at about 12 trillion rupees in 2013/14.

Revised estimate for total expenditure is 14.3 trillion rupees in 2012/13, which is 96 pct of budget estimate.

Set aside 100 billion rupees towards spending on food subsidies in 2013/14.

Revenue

> Expect 133 billion rupees through direct tax proposals in 2013/14.

> Expect 47 billion rupees through indirect tax proposals in 2013/14.

Current account deficit

> India's greater worry is the current account deficit - will need more than $75 billion this year and next year to fund deficit.

Inflation

> Food inflation is worrying, will take all steps to augment supply side.

Tax

> Proposes surcharge of 10 pct on rich taxpayers with annual income of more than 10 million rupees a year.

> To increase surcharge to 10 pct on domestic companies with annual income of more than 100 million rupees.

> To continue 15 pct tax concession on dividend received by India companies from foreign units for one more year.

> Propose to impose withholding tax of 20 pct on profit distribution to shareholders.

> Amnesty on service tax non-compliance from 2007 * 10 bln rupees for first installment of balance of GST (Goods and Services Tax) payment.

> Propose to reduce securities transaction tax on equity futures to 0.01 pct from 0.017 pct.

> Time to introduce commodities transaction tax (CTT) * CTT on non-agriculture futures contracts at 0.01 pct.

Corporate sector and markets

> Plans to issue inflation-indexed bonds.

> Proposes capital allowance of 15 pct to companies on investments of more than 1 billion rupees.

> Foreign institutional investors (FIIs) can use investments in corporate, government bonds as collateral to meet margin requirements.

> Insurance, provident funds can trade directly in debt segments of stock exchanges.

> FIIs can hedge forex exposure through exchange-traded derivatives

Top 10 Expensive Stocks in the World

Enjoy the rush of investing in stocks and following the ups and downs of markets? Well, here are some sought-after stocks that would add to the thrill. There's just one catch: These are extremely expensive stocks.

Let's take a look at some of the most expensive stocks in the world.

Berkshire Hathaway

Industry: Conglomerate

Stock price: $145,505 per share

Global rank: 1

Seaboard Corporation

Industry: Agriculture and ocean transport business

Stock price: $2,639.72 per share

Global rank: 2

NVR Incorporated

Industry: Real estate

Stock price: $1,040.86 per share

Global rank: 3

Google, Incorporated

Industry: Internet

Stock price: $753.83 per share

Global rank: 4

Priceline.com Incorporated

Industry: Travel

Stock price: $695.09 per share

Global rank: 5

Intuitive Surgical Incorporated

Industry: Robotic surgical systems

Stock price: $573.00 per share

Global rank: 6

MasterCard Incorporated

Industry: Banking

Stock price: $516.00 per share

Global rank: 7

Markel Corporation

Industry: Insurance

Stock price: $470.46 per share

Global rank: 8

Apple, Incorporated

Industry: Technology

Stock price: $456.83 per share

Global rank: 9

Biglari Holdings, Incorporated

Industry: Restaurants

Stock price: $369.42 per share

Global rank: 10

Benefits of Currency Derivative Trading

BENEFITS

• Low Commissions – Brokerage fees are very low as the market is highly competitive.
• No Middlemen – Standardized lot size – Futures/Options currency trading does away with the middlemen and allows clients to interact directly on the exchange platform.
• Standardized Lot Size – Low transaction cost – In the futures markets, lot or contract sizes are determined by the exchanges which are fixed in nature. This allows traders to trade multiple lots.
• Low Transaction Cost – The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. In large deals, the spread could be as low as 0.07 percent.
• High Liquidity – With an average trading volume of over $4 trillion per day, FOREX is the most liquid market in the world. It means that a trader can enter or exit the market at will in almost any market condition.
• Almost Instantaneous Transactions – This is a very advantageous by–product of high liquidity.
• Low Margin (3 – 5 percent), High Leverage – These factors increase the potential for higher profits (and losses).
• Online Access – The big boom in FOREX came with the advent of online (Internet) trading platforms.
• Interbank Market – The backbone of the FOREX market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and by telephone. There are no organized exchanges to serve as a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets. The FOREX market operates in a manner similar to that of the NASDAQ market in the United States; thus it is also referred to as an over-the counter (OTC) market.
• No one can corner the market – The FOREX market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffectual and short-lived. Thus central banks are becoming less and less inclined to intervene to manipulate market prices.
• No Insider Trading – Because of the FOREX market's size and non-centralized nature, there is virtually no chance for ill effects caused by insider trading. Fraud possibilities, at least against the system as a whole, are significantly less than in any other financial instruments.
• Limited Regulation – There is but limited governmental influence via regulation in the FOREX markets, primarily because there is no centralized location or exchange. Nevertheless, most countries do have some regulatory say and more seems on the way. Regardless, fraud is always fraud wherever it is found and subject to criminal penalties in all countries.

major Fundamental factors that affect currency movements

• Trade Balance – This refers to imports and exports, and is probably the most important determinant of a currency's value. When imports are greater than exports, you have a trade deficit. When exports are greater than imports, you have a surplus. A shift in the trade balance between two countries tends to weaken the currency of the country with greater deficit
• Wealth – Wealth is a country's reserves, in the form of gold, cash, natural resources, and so on. Basically any factor that affects a country's ability to repay loans, finance imports, and affect investments impacts the market's perception of its currency and the currency's value.
• Internal budget deficit or surplus – A country running a current account deficit has, on balance, a weaker currency than one that runs a budget surplus. This is tricky, however, in that the direction of the surplus or deficit affects perceptions and currency valuations too.
• Interest Rates – Funds move around the world electronically in response to changes in short-term interest rates. If three-month interest rates in Germany are running 1% less than three-month rates in the United States, then all other things being equal, "hot money" flows out of Euro into the Dollar.
• Inflation – Inflation in each country, and inflationary expectations, affect currency values. What good is a 10% short-term return in some country if inflation is running 15%?
• Political factors – Taxes, stability, whatever affects the international trade of a country, or the perception of "soundness" of the currency affect its valuation.

How to Multiply Your Money with Nifty Options Trading Strategy

Nifty options buying has limited risk but unlimited profit potential, I am going to teach you a trading strategy that can easily multiply your trading capital (money). Before starting with this strategy you need to keep at least Rs. 1,00,000 in your trading account, so that you don’t have to risk much of your trading capital. Now here first thing to do is start looking at Nifty futures chart i.e. daily chart, in that chart just see in which direction the market is moving (up or down), If market is trading sideways then there is no trade. Let us see when market is up (forming higher tops and higher bottoms), We will wait for a decent pullback of about 50 to 80 point to participate in that up move. Whenever that pullback happens, you will need to buy Nifty Call Option, now I am tell how to choose correct strike price for nifty options, just look at this example: If nifty spot is 5400 then buy nifty 5500call options i.e. out of money options. Set target as double of your buy price, stop loss half of your buy price. This was all about buying, now let’s see how much quantities to buy; you will use 40% of your trading capital for buying this nifty option. So if you have Rs.1,00,000 in your trading account then you will buy nifty options worth Rs.40,000/- Before trading with options remember trading options always involves high degree of risk, moreover it’s your hard earned money invest it wisely.

How selling out of the money Call / Put will make you rich by few years? How it is 1000 times better than Gambling by buying Lottery Tickets?

Trading often appeals to impulsive people, to gamblers, and to those who feel that the world owes them a living. If you trade for excitement, you are liable to take trades with bad odds and accept unnecessary risks. The markets are unforgiving, and emotional trading always results in losses -Alexander Elder in Trading for living.

This above quote of Alexander Elder represents typical retail options trader. Most retail option traders are attracted by the huge volatility in options and buy cheap calls/put with hope of getting rich overnight. The most common strategy that retail option traders prefer is buying out-of-the-money straight calls and puts.

Out-of-the-money straight calls and puts are sold at very cheap rate. These calls and puts require huge move by stock/index to get profit. This is equivalent of buying a lottery ticket.

The distinct between lottery and calls/put is that in former case seller of the ticket pays only a small portion of the overall proceeds in the form of winnings, options are a zero-sum game in the truest sense of the description – winner’s profits are loser’s losses. And the majority of loser’s losses typically come in the form of speculative out-of-the-money plays.

The winners know how to bias the results. Moreover, they know the risk-reward and the probability of success before each trade. In the options world the gambler is defined by a trader who buys a call or put with a low delta. (Keep in mind, delta is the probability that an option will expire in the money.)

Like lottery tickets sold in streets, options with deltas this low have a low probability of success. But because of their low-priced sale and high-profit potential, they attract in retail options traders.

For this reason, I prefer to take the other side in this zero-sum game. I do so by basically taking the other side of the trade – by selling options to the speculative crowd. I prefer to sell options with low delta. The probability of making profit is above 80% and it moves further higher as I sell further out-of-the-money options. The lower delta higher is the probability of success in the trade.

Delta is the first “Greek” that most traders learn about when they get started with options. Most people learn that delta tells us how much the price of an option will change if the underlying stock or ETF changes in rupees

For example, if you own a call option with a delta of 0.50, every 1 rupee increase in the stock or ETF equates to a 50 paise increase in the price of the option. Remember, we make money with a credit spread when the options contracts expire worthless.

Next important consideration is position sizing. Using delta to calculate your probability of success will help you make intelligent choices about your position sizes.

Keeping position sizing in mind along with the probability of success will keep you in the game for the long haul. And that’s the only way you’re going to have sustainable success as an options trader.

Lot Size of Stock Futures in MCX -SX

Following is the list of stocks that will be available for trading in F&O segment:

Underlying	Symbol	Lot Size
ADITYA BIRLA NUVO LIMITED	ABIRLANUVO	250
ACC LIMITED	ACC	250
ADANI ENTERPRISES LIMITED	ADANIENT	2000
ADANI PORT & SEZ LTD	ADANIPORTS	2000
ADANI POWER LTD	ADANIPOWER	8000
ALLAHABAD BANK	ALBK	2000
AMBUJA CEMENTS LTD	AMBUJACEM	2000
ANDHRA BANK	ANDHRABANK	4000
APOLLO TYRES LTD	APOLLOTYRE	4000
ARVIND LIMITED	ARVIND	4000
ASHOK LEYLAND LTD	ASHOKLEY	9000
ASIAN PAINTS LIMITED	ASIANPAINT	125
AUROBINDO PHARMA LTD	AUROPHARMA	2000
AXIS BANK LIMITED	AXISBANK	250
BAJAJ AUTO LIMITED	BAJAJ-AUTO	125
BANK OF BARODA	BANKBARODA	500
BANK OF INDIA	BANKINDIA	1000
BATA INDIA LTD	BATAINDIA	250
BHARAT FORGE LTD	BHARATFORG	1000
BHARTI AIRTEL LIMITED	BHARTIARTL	1000
BHEL	BHEL	1000
BIOCON LIMITED.	BIOCON	1000
BHARAT PETROLEUM CORP LT	BPCL	1000
CAIRN INDIA LIMITED	CAIRN	1000
CANARA BANK	CANBK	1000
CENTURY TEXTILES LTD	CENTURYTEX	1000
CESC LTD	CESC	1000
CHAMBAL FERTILIZERS LTD	CHAMBLFERT	4000
CIPLA LTD	CIPLA	1000
COAL INDIA LTD	COALINDIA	1000
COLGATE PALMOLIVE LTD.	COLPAL	250
CROMPTON GREAVES LTD	CROMPGREAV	2000
DABUR INDIA LTD	DABUR	2000
DENA BANK	DENABANK	4000
DISH TV INDIA LTD.	DISHTV	4000
DIVI'S LABORATORIES LTD	DIVISLAB	250
DLF LIMITED	DLF	1000
DR. REDDY'S LABORATORIES	DRREDDY	125
EXIDE INDUSTRIES LTD	EXIDEIND	2000
FEDERAL BANK LTD	FEDERALBNK	500
GAIL (INDIA) LTD	GAIL	1000
GMR INFRASTRUCTURE LTD.	GMRINFRA	10000
GODREJ INDUSTRIES LTD	GODREJIND	1000
GRASIM INDUSTRIES LTD	GRASIM	125
GUJARAT STATE PETRO LTD	GSPL	4000
HAVELLS INDIA LIMITED	HAVELLS	500
HCL TECHNOLOGIES LTD	HCLTECH	500
HDFC LTD	HDFC	500
HDFC BANK LTD	HDFCBANK	500
HOUSING DEV & INFRA LTD	HDIL	4000
HERO MOTOCORP LIMITED	HEROMOTOCO	125
HEXAWARE TECHNOLOGIES LTD	HEXAWARE	2000
HINDALCO  INDUSTRIES  LTD	HINDALCO	2000
HINDUSTAN PETROLEUM CORP	HINDPETRO	1000
HINDUSTAN UNILEVER LTD.	HINDUNILVR	500
HINDUSTAN ZINC LIMITED	HINDZINC	2000
INDIABULLS REAL EST. LTD	IBREALEST	4000
ICICI BANK LTD.	ICICIBANK	250
IDBI BANK LIMITED	IDBI	4000
IDEA CELLULAR LIMITED	IDEA	4000
IDFC LIMITED	IDFC	2000
IFCI LTD	IFCI	8000
INDRAPRASTHA GAS LTD	IGL	1000
THE INDIAN HOTELS CO. LTD	INDHOTEL	4000
THE INDIA CEMENTS LIMITED	INDIACEM	4000
INDUSIND BANK LIMITED	INDUSINDBK	1000
INFOSYS LIMITED	INFY	125
INDIAN OVERSEAS BANK	IOB	4000
INDIAN OIL CORP LTD	IOC	1000
IRB INFRA DEV LTD.	IRB	2000
ITC LTD	ITC	1000
IVRCL LIMITED	IVRCLINFRA	8000
JINDAL STEEL & POWER LTD	JINDALSTEL	1000
JAIN IRRIGATION SYSTEMS	JISLJALEQS	4000
JAIPRAKASH ASSOCIATES LTD	JPASSOCIAT	4000
JAIPRAKASH POWER VEN. LTD	JPPOWER	8000
JSW ENERGY LIMITED	JSWENERGY	4000
JSW STEEL LIMITED	JSWSTEEL	500
JUBILANT FOODWORKS LTD	JUBLFOOD	250
KOTAK MAHINDRA BANK LTD	KOTAKBANK	500
KARNATAKA BANK LIMITED	KTKBANK	4000
LIC HOUSING FINANCE LTD	LICHSGFIN	1000
LARSEN & TOUBRO LTD.	LT	250
LUPIN LIMITED	LUPIN	500
MAHINDRA & MAHINDRA LTD	M&M	500
MARUTI SUZUKI INDIA LTD.	MARUTI	250
UNITED SPIRITS LIMITED	MCDOWELL-N	250
MCLEOD RUSSEL INDIA LTD.	MCLEODRUSS	1000
MRF LTD	MRF	125
NHPC LTD	NHPC	12000
NMDC LTD.	NMDC	2000
NTPC LTD	NTPC	2000
ORACLE FIN SERV SOFT LTD.	OFSS	125
OIL AND NATURAL GAS CORP.	ONGC	1000
OPTO CIRCUITS (I) LTD.	OPTOCIRCUI	2000
ORIENTAL BANK OF COMMERCE	ORIENTBANK	1000
PANTALOON RETAIL (I) LTD	PANTALOONR	2000
PETRONET LNG LIMITED	PETRONET	2000
POWER FIN CORP LTD.	PFC	2000
PUNJAB NATIONAL BANK	PNB	500
POWER GRID CORP. LTD.	POWERGRID	2000
PTC INDIA LIMITED	PTC	4000
PUNJ LLOYD LIMITED	PUNJLLOYD	8000
RANBAXY LABS LTD	RANBAXY	500
RAYMOND LTD	RAYMOND	1000
RELIANCE COMMUNICATIONS L	RCOM	4000
RURAL ELEC CORP. LTD.	RECLTD	1000
RELIANCE CAPITAL LTD	RELCAPITAL	1000
RELIANCE INDUSTRIES LTD	RELIANCE	250
RELIANCE INFRASTRUCTU LTD	RELINFRA	500
SHREE RENUKA SUGARS LTD	RENUKA	8000
RELIANCE POWER LTD.	RPOWER	4000
STEEL AUTHORITY OF INDIA	SAIL	4000
STATE BANK OF INDIA	SBIN	125
SESA GOA LTD	SESAGOA	2000
SIEMENS LTD	SIEMENS	500
SINTEX INDUSTRIES LTD	SINTEX	4000
SHRIRAM TRANSPORT FIN CO.	SRTRANSFIN	500
STERLITE INDS (IND) LTD	STER	4000
SUN PHARMACEUTICALS IND.	SUNPHARMA	500
SUN TV NETWORK LIMITED	SUNTV	1000
SYNDICATE BANK	SYNDIBANK	4000
TATA CHEMICALS LTD	TATACHEM	1000
TATA COMMUNICATIONS LTD	TATACOMM	1000
TATA GLOBAL BEVERAGES LTD	TATAGLOBAL	2000
TATA MOTORS LIMITED	TATAMOTORS	1000
TATA MOTORS DVR 'A' ORD	TATAMTRDVR	2000
TATA POWER CO LTD	TATAPOWER	4000
TATA STEEL LIMITED	TATASTEEL	1000
TATA CONSULTANCY SERV LT	TCS	250
TECH MAHINDRA LIMITED	TECHM	250
TITAN INDUSTRIES LTD	TITAN	1000
UCO BANK	UCOBANK	4000
ULTRATECH CEMENT LIMITED	ULTRACEMCO	125
UNION BANK OF INDIA	UNIONBANK	2000
UNITED PHOSPHORUS LIMITED	UNIPHOS	2000
UNITECH LTD	UNITECH	10000
VIJAYA BANK	VIJAYABANK	4000
VOLTAS LTD	VOLTAS	2000
WELSPUN CORP LIMITED	WELCORP	2000
WIPRO LTD	WIPRO	1000
YES BANK LIMITED	YESBANK	1000
ZEE ENTERTAINMENT ENT LTD	ZEEL	2000