Zebu blog

Tag: market opportunities

  • The Indian Share Market in 2023 – The Opportunities And Challenges

    Recent years have seen strong performance from the Indian stock market, and 2023 is forecast to be no different. However, investors need also to be aware of a number of hurdles and risks as they plan to invest the next year.

    The world economy’s current condition is one consideration. The recent release of vaccinations against the COVID-19 pandemic has not prevented the pandemic from having a serious impact on the global economy, and this is unlikely to change in the near future. As a result of investors’ responses to these shifting economic situations, market volatility may rise.

    In addition, there is the problem of monetary and fiscal policy uncertainty. The Reserve Bank of India (RBI) has changed interest rates and introduced new measures to encourage credit growth to help the country’s economy weather the epidemic. The stock market might be affected by any adjustments in monetary policy that the RBI makes in the next year, although it is currently unclear what that position will be. The market may also react to the government’s fiscal policy, which includes budget choices and expenditures.

    Despite these difficulties, the Indian stock market in 2023 offers a lot of promising openings. It will be interesting to see how the technology industry, which has been a growth engine in recent years, fares in the next year. Numerous expansion prospects for tech firms have arisen thanks to rising demand for digital products and services, and this pattern is anticipated to persist until 2023.

    The government’s emphasis on infrastructure development is something to keep an eye on since it might lead to growth in the infrastructure industry. The National Infrastructure Pipeline is only one of the government’s plans to increase infrastructure expenditure and fuel industry expansion.

    Healthcare, consumer goods, and financial services are a few more areas that are anticipated to do well in 2023. To improve returns, investors may choose to spread their money around and invest in a variety of industries.

    In 2023, investors in the Indian stock market may expect to face both possibilities and problems. Before making any financial commitments, investors should think long and hard about their investment strategy and, if necessary, consult a financial counsellor or other qualified experts. Remember that your financial condition and investing goals should always come first when making any investment decisions and that no investment is risk-free.

  • Should You Invest During A Recession?

    After Russia invaded Ukraine, the stock markets in India went down a lot. India imports more than 80% of the energy it needs, and prices for crude oil are going through the roof around the world. Also, international institutional investors have been taking their funds out of the Indian stock markets slowly since October 2021. As investors from all over the world rush to the safety of US government bonds, the Indian stock markets may fall even more. Should you buy stocks during a recession?

    Why do investors think it’s a good time to buy stocks when the economy is down?

    During a recession, the value of stocks tends to go down. When the stock market goes down, you may be able to buy shares of strong companies for less money. It is a business that is financially stable and has good corporate governance.

    If you want to invest in stocks that will give you good returns over a long period of time, you should choose companies with an economic moat. These businesses have an edge over their competitors because they have things like strong brands or good distribution networks.

    During a recession, you might want to invest in the stock market, which is known for long-term growth. Also, a stock market drop happens before a recession, so the economy goes through a stock market crash before it goes through a recession.

    Before buying stocks, many people wait until the stock market is at its lowest point. Analysts of the stock market warn against using this strategy because it’s hard to know when the stock market will hit bottom. To invest in a stock market that is going down, you need to know how to do it right.

    How to invest your money when the stock market goes down

    If you’re new to the stock market, you might want to invest in a diversified equity mutual fund instead of buying stock in a single company. Investing in stocks from different industries and businesses gives you the chance to spread your risk. For example, weaknesses in one area can be made up for by strengths in another.

    With a systematic investment plan, or SIP, you can put your money into equity-diversified mutual funds. It is a way to invest a fixed amount of money in a mutual fund scheme on a regular basis. When stock markets go down, you will buy more equity fund units, and when markets go up, you will buy fewer units. It helps make the price of buying units of equity funds more stable over time.

    If you know a lot about the stock market and are willing to take on more risk, you can invest directly in stocks. It is helpful to do research and choose cyclical companies with strong fundamentals that could do well when stock markets recover. For example, changes in the economy’s big picture have an effect on cyclical stocks in industries like financial services, travel, and hospitality.

    During a bad market, you might want to invest in companies that are safe. Some examples of defensive stocks are those from the fast-moving consumer goods, pharmaceutical, and utility industries. These are the stocks of companies whose products and services are still in high demand even when the economy isn’t doing well.

    During a recession, you shouldn’t buy stocks from companies that have a lot of debt on their balance sheets. When the economy is bad, it can be hard for these businesses to pay their interest bills. You could fight the urge to stay away from the stock market when it goes down. If you don’t, you’ll miss out on important opportunities to make money from the market’s recovery and higher returns.

    During a recession, you might be able to buy fundamentally sound stocks at lower prices. Also, after doing a good job of researching stocks, you need to invest using a good investment strategy.

  • Reasons Why You Should Be Trading Options

    At least in India’s equities markets, options trading has clearly matured. In terms of daily volumes, options are not only liquid, but they are also many times larger than the cash and futures markets. We’ll look at the advantages of options trading, as well as the benefits of option trading for both buyers and sellers. Here’s a quick rundown of the advantages of trading options.

    While Options Trading has multiple benefits, trading using Zebu’s online trading platforms has its own set of benefits. We offer the lowest brokerage on intraday trading and are one of the best share broking company so we can make your investment journey seamless.

    Benefits of Options Trading

    Hedging risk is possible with options trading. If you are buying stocks of a company and purchase a put option for the same underlying, for example, your risk is minimised. If you are long a stock at Rs. 1000 and buy a Rs. 900 put option at a premium of Rs.10, your maximum loss will be Rs.110. That is the strength of options, since no matter how low the price drops, you will only lose a set amount of money.

    Options can assist you in lowering the cost of keeping a stock. For example, if you’re holding stock and the price isn’t changing, you can sell greater call options to earn the premium and lower your asset’s cost of ownership.

    Options are far more cost-effective in terms of costs, which is one of the key advantages of options trading. The trader might establish an options position with a little margin because of options. For example, an investor must pay Rs.20,000 to purchase 100 shares of a stock at a price of Rs.200. However, if he purchased equal-weighted call options, the premium required would be roughly Rs 5,000.

    Options have the potential to provide huge returns, or a multiplier effect. Here’s how to do it. If the strike is picked correctly, the option pays the same profit as straightforward stock buying. Because we are obtaining options at a lower margin while maintaining the same profitability, the percentage return would be significantly higher, at least in terms of ROI or return on investment.

    One of the major benefits of options is that they allow for the systematic transfer of risk from someone who wants to remove risk for a fee to someone who is willing to take on that risk for a fee. One of the most significant advantages of options trading is that it provides a genuine secondary market for risk, which is what distinguishes the options market.

    One of the most essential aspects of options is that they provide liquidity while also allowing price discovery in the underlying market. Options are a useful way of pricing complex risk characteristics, hence this is an important feature.

    The fact that the options-related data usually works as a lead indication is a significant advantage of the options. Data points such as option strike accumulation, changes in options interest across strikes, and significant spikes in implied volatility in options, for example, are all crucial leading indications of the future shape.

    Risks of Options Trading

    There are five disadvantages to trading options in general, and these are the same whether you are a buyer or seller of options.

    When naked options are sold, the potential losses might be enormous. As a result, vigilance is advised. Furthermore, even if you are buying options and frequently see your options expire worthless, it can reduce your trading capacity.

    Options pricing, option valuations, options trading, and other complexities make this a difficult trading landscape. Many traders are unaware of the basic hurdles of options trading and are quick to jump in.

    With Nifty or Bank Nifty options, or even very liquid stock options, liquidity may not be an issue. However, in mid-cap equities where options are authorised, liquidity is unquestionably a problem.

    If you’re working on a complex strategy, costs will be multiplied. Then there are statutory charges, exchange costs, tax costs, and so on, all of which must be taken into account.

    Time decay benefits the seller of the option but puts the buyer at risk because the option loses time to value with each passing day, even if the price isn’t changing much.


    As we mentioned earlier, trading using Zebu’s online trading platform has its own set of benefits. We offer the lowest brokerage on intraday trading and are one of the best share broking company so we can make your investment journey seamless.

  • Why You Should Trade In Commodities During A Global Crisis

    Commodity trading has a long history in India. The Bombay Cotton Trade was established in 1875, marking the first significant milestone. Then, in 1991, came the liberation policy, which boosted commodities trading. Futures were reintroduced in 1994 after being discontinued owing to war and food shortages. Agricultural goods were included as a result of the reintroduction.

    Before we get into the benefits of trading in commodities we would like you to know that at Zebu, one of the fastest-growing brokerage firms in the country, we have created the best Indian trading platform with the lowest brokerage for intraday trading.

    Commodities are traded on six markets in India.

    They are as follows:
    MCX stands for Multi Commodity Exchange.
    NCDEX stands for National Commodity and Derivatives Exchange.
    NMCE stands for National Multi Commodity Exchange.
    ICEX stands for Indian Commodity Exchange.
    ACE stands for Ace Derivatives Exchange.
    UCX stands for Universal Commodity Exchange.
    When it comes to market share, MCX has a 70 percent stake, NCDEX has a 25 percent share, and NMCE has a 5 percent share.

    Here are a few benefits of commodity trading in India:

    1. A Reliable Option in a Crisis
    There aren’t many people interested in trading commodities. A trader, on the other hand, may consider investing in metals such as gold, silver, platinum, and other precious metals. In times of inflation and economic uncertainty, these provide security.

    2. Diversification of your portfolio
    If you’re an investor who already invests in equities and bonds, you might want to examine commodities as well. You can diversify your portfolio and develop a risk-adjusted strategy this way.

    3. Transparent
    Commodity trade has become more transparent in India because to online commodity trading. Price discovery is fair, and it is regulated by large-scale involvement. When there is such a large degree of engagement, it also aids in gauging the perception and outlook of commodity traders.

    4. Possibility of High Returns
    When it comes to commodities trading, there’s always the possibility that a trader will strike it rich. However, this is only achievable if a sound trading plan is in place.

    5. Hedging
    Hedging is the practice of managing price risks in the futures market by taking an equal and opposite position. Certain factors in commodity trading, such as natural disasters, economic crises, or war, might cause commodity prices to rise. These commodities can be used as a risk hedge.

    6. Anti-inflationary protection
    Commodity prices typically rise during periods of inflation. Investing in the right commodities will not only help you beat inflation but also help you make excellent profits.

    7. Trading with a Smaller Margin
    Commodity trading allows you to trade with a reduced margin of 5% -10%. You can take bigger positions with less capital if you have a lower margin.

    8. There will be no cut-offs
    Time decay is a constraint while trading Options. As the expiration date approaches, there is less time to cash in on the option financially. Time decay is not an issue in commodities futures because there is no expectation of a strike price at expiration.

    As we mentioned before, trading strangles requires thebest Indian trading platform and the lowest brokerage for intraday trading. As one of the best brokerage firms in the country, we have created a powerful trading platform that makes analysis easy for you. To know more about its features, please get in touch with us now.

  • Here’s How Arbitrage Trading Works

    Every day, thousands of traders and investors participate in the capital markets. All of the participants’ primary goal is to make a profit. To trade in the stock market, you can use a variety of techniques and strategies. A trading strategy, on the other hand, becomes applicable only if the asset’s price moves in a favourable direction. Arbitrage is a unique but simple method of profiting from the capital markets.

    Before we get into arbitrage trading… To do any form of trading, you need a reliable brokerage trading firm that gives you thebest stock trading platform that helps you analyse the right trading opportunities. Zebu gives you one of the best online trading platforms in the country with a fast-growing customer base. Please get in touch with us to know more.

    What exactly is arbitrage? To understand how arbitrage works, it is essential to first define arbitrage. Arbitrage is defined as the simultaneous purchase and sale of the same asset in different markets in order to profit from the price difference in both markets. While arbitrage opportunities can arise in any asset class that is traded in different markets in a standardised form, currency and stock markets are the most common. Arbitrage opportunities are frequently fleeting, lasting only seconds or minutes. Contrary to popular belief, markets are not completely efficient, creating arbitrage opportunities. As you may know, the price of an asset is determined by the supply and demand for it. A price difference arises as a result of a difference in supply and demand for an asset in different markets, which can be used for arbitrage trading.

    What is the process of arbitrage trading? As mentioned earlier, arbitrage trading is based on the trader’s ability to capitalise on the price gap of the same asset in different markets. Because arbitrage opportunities are limited, most traders use algorithms to execute arbitrage trades. Let us look at a stock market example to see how arbitrage works. Assume XYZ is a stock that is traded on the National Stock Exchange and the New York Stock Exchange. On the NYSE, the price of XYZ is quoted in US dollars, while on the NSE, it is quoted in Indian rupees. On the NYSE, the share price of XYZ is $4. The share price on the NSE is Rs 238. If the USD/INR exchange rate is Rs 60, the NYSE share price of XYZ in INR will be Rs 240. If the USD is converted to INR, the same stock is quoted at Rs 238 on the NSE and Rs 240 on the NYSE. To take advantage of the arbitrage opportunity, a trader will purchase XYZ shares on the NSE at Rs 238 per share and sell the same number of shares on the NYSE for Rs 240, earning a profit of Rs 2 per share. While participating in arbitrage trades, traders must consider certain risks. The price difference is the result of a favourable exchange rate, which is constantly changing. Any significant change in the exchange rate while the trade is being carried out can result in losses. The transaction fees are another important factor to consider. If the transaction cost exceeds Rs 2 per share, the price gain will be lost.

    In India, how does arbitrage work? There is a scarcity of companies that are listed on both the Indian and foreign stock exchanges. However, India has two major exchanges—the BSE and the NSE—and the majority of companies are listed on both, creating an opportunity for arbitrage. Even if the price of a particular share differs between the NSE and the BSE, an arbitrage trade cannot be conducted. On the same day, traders are not permitted to buy and sell the same stock on different exchanges. For example, if you buy XYZ shares on the NSE today, you cannot sell them on the BSE the same day. So, how exactly does arbitrage work? One can sell shares that he or she already owns on one exchange and buy the same amount on another. For example, if you already own XYZ shares, you can sell them on the BSE and purchase them on the NSE. If you already own the stock, you are not engaging in an intraday trade on different exchanges, which is not permitted.

    Conclusion Because the price differential does not last long, automated systems are commonly used for arbitrage trading. Though spotting arbitrage opportunities is simple, profiting from them manually is extremely difficult. As we mentioned earlier, arbitrage trading needs the best online trading platform for you to instantly capitalise on any price difference between NSE and BSE. Zebull from Zebu is the fastest growing and best stock trading platform that comes with a mind-boggling number of features to help traders. Zebu is also becoming the fastest-growing brokerage firm in the country – please get in touch with us to know more about our products and services.