What is Historical Volatility? Historical volatility, often abbreviated as HV, is a statistical measure that quantifies the degree of price fluctuations of a financial asset over a specific period. It’s calculated by measuring the standard deviation of the asset’s daily or weekly returns. Essentially, it provides a historical snapshot of how much an asset’s price […]

Historical volatility, a statistical measure of price fluctuations over a given period, is a fundamental tool for traders and investors. However, its misuse can lead to significant losses. This article will delve into the five most common mistakes traders make when using historical volatility and provide insights on how to avoid them. 1. Overreliance on […]

Hedging can be considered one of the fundamental mechanisms of any financial market since it allows companies, investors, and traders to control risk, particularly in the foreign exchange market, which is characterised by high volatility. Cross currency swaps and forward contracts make up a considerable part of the instruments that are used for such a […]

Futures contracts are finding a widening acceptance in Indian stock markets thanks to their functional nature as well as their utility in enabling trading strategies. Such contracts enable traders and investors to mitigate risk as well as bet on the future price movement of an underlying asset, including shares, commodities, and indices. It becomes imperative […]

Forward contracts are of great importance in the financial markets, commonly used by traders, businesses, and investors to hedge against risk or speculate on the price movements of various assets. Although they might seem complicated at first, mastery of how they are structured and how they function in trading gives investors the power to make […]

Various tools and instruments are available for investors and traders to manage risks and speculate on price movements. Among these instruments, forward contracts and futures contracts play significant roles. While they may appear similar at first glance, these two types of contracts have distinct features that set them apart. This blog will explore the differences […]

Understanding Bonus Shares Bonus shares, a corporate action where a company distributes additional shares to its existing shareholders without any additional cost, can significantly impact your investment portfolio. While they might seem like a windfall, understanding how they affect your investment is crucial. Types of Bonus Shares How Bonus Shares Are Issued Companies typically issue […]

When a company distributes a portion of its profits to its shareholders, it’s typically done through dividends. But there are two primary ways to do this: bonus shares and stock dividends. While both methods involve giving shareholders additional shares, they differ in their implications and the underlying mechanisms. This article will delve into the distinctions […]

Margin trading facility (MTF) offers investors a way to amplify their trading capabilities by borrowing funds to buy more securities than they could with their own capital alone. This approach can be particularly beneficial in portfolio diversification, a strategy that aims to spread investments across various assets to reduce risk and enhance stability. In this […]

The National Stock Exchange (NSE) of India has become a significant platform for companies seeking to raise capital through Initial Public Offerings (IPOs). Institutional investors, such as mutual funds, insurance companies, pension funds, and foreign institutional investors (FIIs), play a crucial role in the success of these IPOs. Their participation not only brings credibility to […]

In the stock market, averaging is a well-known strategy that helps investors in managing their investments over time. It involves making investments in a manner that will help manage shares’ average costs per share while reducing market fluctuations. While constructing portfolios using the average method can be an effective move, many mistakes are common among […]

Averaging is an established technique in the stock market that has finally assisted investors to navigate market instability and grow their portfolios gradually over time. Rather than trying to time the market perfectly for long-term investors, it’s important to adopt strategies like averaging that can help smoothen the rough patches along the way. However, before […]