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Algo Trading Myths Debunked | Truth About Automated Trading

When people hear the term Algo Trading, most people think of it as something that’s only for big companies and professional traders. Some consider it so complicated that they back off before even trying it. But the reality is that today, in 2025, technology and new SEBI regulations have made it easier for everyone. Now, even retail traders can automate their trading with the help of free APIs and no-code platforms. In this blog, we’ll debunk these Algo Trading myths with the truth.

What Exactly Is Algo Trading?

Algo Trading, or Algorithmic Trading, is a method in which trading decisions are made by a system based on predetermined rules and logic, rather than by humans. These rules include price, volume, time, and other market indicators. Its primary purpose is to make trading fast, accurate, and emotion-free, so that every decision is based on data, not guesswork.

How It Works

Algo Trading isn’t difficult to understand. The entire process involves a few simple steps:

Developing a strategy : First, a trader uses their own thinking and experience to establish a rule, such as buying or selling at a certain price level.
Building the system : This rule is set up in the system as code or logic.
Connecting to the API : The system connects to brokers’ APIs (such as Pocketful, Zerodha, Dhan, etc.) to access live market data.
Backtesting : Before running the strategy in the real market, the same strategy is tested on historical data to determine its performance.
Live running : When the strategy is successful in testing, the system uses it in real trading.
Monitoring : The trader continuously monitors whether the system is trading correctly and makes changes if necessary.

Myth 1: Algo Trading is only for large institutions

The Myth : Many people believe that Algo Trading is only for large fund houses, institutional investors, or hedge funds. They believe it requires significant capital, complex coding, and expensive servers. This is why many retail traders still shy away, believing that this technology is not for them.

The Reality : This thinking is now outdated. In 2025, Algo Trading will become simpler, more accessible, and more affordable than ever before. Today, even retail investors can easily start API-based trading without any complicated setup or large capital. Platforms like Pocketful have bridged this gap. Here, you can start automated trading by opening a Zero AMC Account and generating your own API in just a few minutes.

Step-by-Step Procedure to Start Algo Trading

Step	Description
1	Open a Free Account on Pocketful (Zero AMC)
2	Generate API by going to the dashboard
3	Connect your strategy to any Algo platform
4	Backtest and then deploy in Live Mode
5	Monitor your algorithm and optimize as needed.

Example : Let’s say you have ₹10,000 in capital and trade manually every day. By connecting to Pocketful’s API, you can automate your strategy such as “buy when the price rises above a certain level, sell when it falls below.” You no longer need to sit in front of the market; the system will automatically trade according to its rules.

Myth 2: Algo Trading requires coding or Programming skills

The Myth : Many new traders think they need to be proficient in Python or another programming language before they can start Algo Trading. This belief is so common that many people give up before even trying to learn. They believe that automated trading is impossible without coding.

The Reality : The truth is that knowing how to code is no longer necessary. There are many no-code and low-code platforms available today, where you can automate your trading strategy without writing a single line of code. Tools like the Pocketful API allow you to easily connect your trading logic to an Algo platform. There, you simply set conditions like, “Buy if the price goes above the support level, sell if it goes below.” The execution system handles the rest.

Example : Suppose you’re a retail trader with no programming knowledge. You activate Pocketful’s API, connect it to an algo platform, and enter your simple logic “If Nifty falls 1%, sell.”

Now, when the same market conditions arise, the system will automatically execute the trade without coding, without any technical hassle.

Algo Trading relies on thinking and strategy, not coding. Traders who intelligently craft their logic consistently outperform. Coding is now an option, not a necessity.

Myth 3: Algo Trading Always Leads to Profits

The Myth : Many traders assume that applying algorithms to trading will eliminate the possibility of losses. They believe that machines are more accurate than humans, so Algo Trading means “profit every time.” This belief is one of the most common and dangerous Algo Trading myths.

The Reality : Algo Trading is not a magic tool. It simply executes your strategy in a disciplined and emotion-free manner. If your strategy is incorrect or incomplete, the algorithm will produce the same results. Market conditions constantly change; the same logic doesn’t work all the time. Therefore, it’s important to constantly backtest, optimize, and review any strategy.

Furthermore, slippage, latency, and sudden market events (such as RBI policy announcements or geopolitical news) also impact performance. Therefore, an algorithm simply means automation, not a guarantee of profit.

Example : Suppose you’ve created a momentum-based algorithm that buys when the price rises. When the market is trending, it works very well. But when the market goes sideways, the same algorithm starts taking entries on incorrect signals, leading to losses. Therefore, it’s important to periodically refine the algorithm and optimize it according to changing market conditions.

The advantage of algo trading is that it brings discipline, but not certainty. Profit or loss depends on the quality of your strategy, market conditions, and risk management. A successful trader is one who constantly understands, tests, and improves their algorithm.

Myth 4: Algo Trading Requires a Lot of Money

The Myth : Most people believe that Algo Trading requires significant capital, an expensive setup, and numerous technical tools. They believe it’s only for those with millions of rupees in capital and high-end computer systems. This perception scares small traders away from even getting started.

The Reality : This is no longer the case. Today, in 2025, Algo Trading has become cheaper and easier than ever before. No longer does anyone need expensive servers or heavy software. On platforms like Pocketful, you can open a Zero AMC account and generate your own API for free. This API connects your trading to any Algo platform, allowing you to automate your strategy without significant capital. Cloud-based servers are now available for ₹300–₹500 per month, allowing even retail traders to take advantage of the automation.

Example : Let’s say you have just ₹5,000 or ₹10,000 in capital. You open an account on Pocketful, create an API, and set up your trading logic on a platform like Vertex. The system will now execute trades for you every day based on that logic, at no extra cost. This process is as cheap and easy as trading on a mobile app.

Myth 5: Once set up, Algo Trading “runs automatically”

The Myth : Many people believe that once they’ve set up Algo Trading, they don’t have to do anything; the system will automatically trade continuously, make money, and take care of everything. This is a “set it and forget it” approach. This thinking is a major misconception, often leading to losses for new traders.

The Reality : Many people believe that once they’ve set up Algo Trading, they don’t have to do anything; the system will automatically trade continuously, make money, and take care of everything. This is a “set it and forget it” approach. This thinking is a major misconception, often leading to losses for new traders.

Example : Suppose you’ve created a strategy that auto-trades Nifty futures twice a day.

One day, if the internet suddenly goes down or there’s a brief API glitch, your order could be delayed.

If you’re monitoring, you can immediately stop or correct it.

But if you leave the system completely unattended, that same delay could lead to losses.

Myth 6: Algo Trading is Completely Illegal in India

The Myth : Many people still believe that algo trading in India is against SEBI or exchange regulations.

The belief is widespread on social media and old forums that if a trader executes automated orders, their account may be blocked or they may face fines.

This fear keeps many new investors away from this modern technology.

The Reality : In fact, algo trading is completely legal in India provided you do it within the guidelines set by SEBI. SEBI already permitted API-based trading in 2022, and now every authorized broker is required to provide verified API access to its registered users.

This means that if you use the API of a recognized platform and execute your own strategy, it is considered completely compliant. Its purpose is to maintain market transparency and control, ensuring that no unregulated bot or auto-buy/sell script operates without oversight.

Example : Let’s say you’re running your strategy through a recognized API.

The system records every order associated with your name and client ID and verifies it within SEBI’s risk framework. If there’s a mistake or error, the order is immediately rejected or paused; this control is what makes it completely legal.

Myth 7: Algo Trading and High-Frequency Trading (HFT) are the same thing

The Myth : Many people believe that Algo Trading and High-Frequency Trading (HFT) are the same thing. According to them, each algorithm places millions of orders per second, and that’s why institutions control the market. This thinking is wrong and this misconception keeps many retail traders away from Algo Trading.

The Reality : In fact, Algo Trading and HFT are two different technologies. Both use algorithms, but the purpose and scale are completely different. Algo Trading refers to automated trading based on predefined logic, which can be performed by any trader, retail or professional. High-Frequency Trading (HFT) occurs at the institutional level, executing millions of orders in microseconds. This requires ultra-fast connectivity and co-location servers, which ordinary investors do not have.

Comparison

Aspect	Algo Trading	High-Frequency Trading (HFT)
User	Retail and Institutional Traders	Institutional Firms Only
Execution Speed	Milliseconds to Seconds	Microseconds
Cost	Cost-effective (Cloud or API)	Very expensive (Dedicated Servers)
Objective	Logical Automation	Speed-Based Arbitrage
Access	For everyone	Limited, under regulatory control

Example : Suppose you’ve created a strategy that trades the Nifty index based on RSI and moving averages. This strategy executes trades two or three times a day—this is Algo Trading.

Now a large firm is executing arbitrage trades in microseconds from a co-location server at NSE—this is HFT. Both have different objectives and are not substitutes for each other.

Myth 8: Algorithms are smarter than humans

The Myth: Many people believe that once an algorithm is created, it becomes smarter than humans and will make the right decision in every situation. They believe that machines are free from emotions and therefore can never make mistakes. This thinking leads many traders to blindly trust them, and this is where the mistakes begin.

The Reality : An algorithm is certainly fast, but not “smart.” It only does what you teach it, no more or less. If your rules are incomplete or market conditions suddenly change, even an algorithm can make the wrong trade. Machines can read data, but they don’t understand context. For example, if there is a major economic change in the budget one day, the algorithm may take a trade in the wrong direction based on past data. Therefore, human decisions and market sense are always essential. A successful trader is one who trusts the algorithm but monitors the final decision.

Example : Suppose your algorithm is based on a trend-following strategy. It consistently buys at rising prices. One day, the government suddenly implements a new tax rule, and the market immediately reverses. The algorithm places an order in the previous direction, resulting in a loss. If you had monitored it, you could have prevented it.

Myth 9: If a strategy is successful in backtesting, it will yield similar profits in the live market.

The Myth : Many new traders think that if their strategy performs well in backtesting, they will achieve the same results in the live market. For them, backtesting means “final approval,” meaning that if the strategy showed a profit on past data, it will always work. But the reality is quite different.
The Reality : Backtesting is an initial test of any strategy, not a guarantee of success. Because conditions in live markets are constantly changing, many factors such as volatility, slippage, liquidity, internet delays, and human intervention affect results. Sometimes, traders optimize a strategy so much that it only performs well on past data; this is called curve fitting. Such strategies fail in real-time because they aren’t prepared for changing conditions. Therefore, successful algo traders always conduct forward testing and paper trading to verify the strategy in live conditions.
Example : Suppose you created a breakout strategy that consistently showed profits based on the past three years of data. But when you deployed it in the live market, false breakouts began occurring, and the strategy went into losses. The reason is simple: market behavior changed, but the strategy remained the same.

Myth 10: Complex Algorithms Are Always More Profitable

The Myth : Many traders believe that the more complex a strategy, the greater the profit.

They think that by adding a lot of indicators, ratios, and conditions to an algorithm, it will work perfectly in every market situation.

This is why many beginners waste both time and money creating unnecessarily complex systems.

The Reality : In the trading world, complexity doesn’t always mean efficiency.

In fact, the more conditions you add, the more your algorithm is prone to “curve fitting.” Such strategies may produce excellent results on historical data, but fail in the real market because they lose flexibility. The most stable and successful strategies are often simple ones, such as trend-following, momentum, or mean-reversion, which have fewer indicators and clear logic.

Simple systems are easier to understand, maintain, and optimize.

Example : Let’s say you’ve created an algorithm that incorporates RSI, MACD, Bollinger Bands, EMA crossovers, and five other filters. This strategy produces excellent results in backtesting, but when you run it live, performance drops due to lag and conflicting signals. In contrast, a simple moving average-based strategy works consistently because its logic is clear and stable.

Myth 11: Algo Trading doesn’t require risk management

The Myth: Many people think that when the system is trading automatically, there’s no need to worry about risk. They believe that the algorithm can handle every situation and prevent losses. This thinking is extremely dangerous, because automation doesn’t mean “risk-free.”

The Reality: Every strategy, whether manual or automated, comes with risks.

An algorithm does what it’s told. If you don’t include risk-control parameters, it can even increase losses. Therefore, it’s important to include rules like stop-loss, maximum drawdown limit, and position sizing in every algorithm. Furthermore, it’s wise to include emergency halt (kill switch) or circuit-breaker logic so that the system can stop itself in case of an unexpected situation.

Example: Suppose your strategy involves intraday scalping and you forget to set a stop-loss. If the market suddenly reverses, the algorithm will continue to take trades, increasing losses. However, if a risk limit is set in the system, it will automatically close at the set loss.

Myth 12: Algo Trading is Only in Equities

The Myth: Many traders believe that Algo Trading is limited to the stock market or the equity segment. According to them, it is not applicable in derivatives, commodities, or forex.

The Reality: Today, Algo Trading is used in almost every segment—equities, futures, options, commodities, and currencies. Trading APIs and cloud-based systems have made multi-segment trading much easier. Now, you can automate trades in Nifty futures, gold contracts, or USD-INR pairs from a single system.

Example: An options trader can automate their strategy—such as, “If Nifty goes up 1%, close a short straddle.” Or a commodity trader can set up auto-entries at moving average crossovers in gold futures.

Myth 13: Algo Trading Requires Expensive Data Feeds

The Myth: Many people believe that algo trading requires high-speed and expensive data feeds, which only large institutions have access to. Because of this, retail traders think they can’t perform well without accurate data.

The Reality: Today, almost all registered brokers in India offer real-time market data APIs to their clients at a very low cost. Furthermore, cloud platforms come with pre-integrated data connections, eliminating the need for a heavy subscription. Historical data is also now easily available online, making backtesting and analysis easier than ever.

Example: A retail trader can run a daily strategy by pulling intraday prices and volume data from their broker’s basic data API. They don’t need an institutional-grade feed; just reliable internet and a stable platform are sufficient.

Myth 14: Algo Trading Means Zero Emotional Involvement

The Myth: Many traders think that emotions have no place in Algo Trading and that once automation is introduced, the role of humans is eliminated.

They believe that factors like fear, greed, or patience no longer matter.

The Reality: Although Algo Trading reduces emotional errors, the role of humans does not disappear. Behind every strategy lies a trader’s thinking, logic, and judgment.

The algorithm only executes what the human tells it. If the trader changes their strategy or stops early in panic, those same emotions also affect the automation.

Example: Sometimes a trader believes the market will move in the opposite direction and shuts down the system mid-trade, even though the system’s logic is still valid. In such cases, it is human emotion that causes the loss, not the algorithm.

Myth 15: Algo Trading will completely replace humans

The Myth : Some people believe that in the future, the need for human traders will disappear and algorithms and AI will take over. This fear is especially prevalent among traditional traders, who believe that automation will take over their jobs.

The Reality: Algo Trading doesn’t replace humans, but rather empowers them. Machines are fast, but they lack judgment, creativity, and adaptability. When a market event occurs, such as a policy change, a geopolitical crisis, or an emotional panic, only humans can make the right decisions. In fact, the world’s most successful funds adopt a human-machine approach, where logic is based on automation. It is based on data, but the direction is determined by humans.

Example: Suppose geopolitical tensions increase in the global market one day. The algorithm takes normal trades based on historical data, but an experienced trader immediately stops the strategy and saves capital. This is the difference between humans and machines.

Conclusion: The future of Algo Trading is not “machine vs. human,” but “machine with human.” The trader who balances both will be the real winner in the future.

Read Also: Top Algorithmic Trading Strategies

Conclusion

Ultimately, Algo Trading isn’t magic, but rather a clever tool. It frees you from emotions and brings discipline and precision, but success still depends on human thinking, strategy, and control. Technology helps the decision is still yours.

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Frequently Asked Questions (FAQs)

Is Algo Trading profitable?
Yes, with the right strategy and discipline, but making profit is not guaranteed.
Do I need coding for Algo Trading?
No, now it’s easy to start with no-code tools.
Is Algo Trading legal in India?
Yes, API-based trading is completely legal under SEBI regulations in India.
Does Algo Trading work automatically?
Yes, but monitoring is necessary it’s not advisable to abandon it completely.
Can small traders use Algo Trading?
Absolutely. Now anyone can start with little capital and a free API.

October 27, 2025

Dividend Distribution Tax – Meaning, Rate & Calculation

When a company shares profits with its investors, it’s called a “dividend.” But the tax on this dividend has always been a bit confusing for many. Dividend Distribution Tax is a tax that companies previously paid to the government before distributing dividends to investors. This tax reduced investors’ actual earnings. Later, the government made changes to the tax system to make it simpler and more transparent. In this blog, we’ll understand what dividend distribution tax is, how it works, and its impact on investors.

What Is Dividend Distribution Tax (DDT)?

When a company distributes a portion of its profits to its investors, it’s called a dividend. However, before this dividend could reach investors, a tax had to be paid called the Dividend Distribution Tax (DDT). This meant that even after paying taxes on its earnings, the company had to pay another tax to the government before distributing the dividend. This kept the tax burden directly on the company, but the impact fell on investors’ pockets.

How was DDT implemented?

Dividend Distribution Tax was implemented under Section 115-O of the Income Tax Act, 1961. Under this rule, whenever a company decided to pay a dividend to its shareholders, it had to first deposit this tax with the government. The company had to make this payment within 14 days. This means that the company could not transfer the dividend until the tax was paid. This system made tax collection easier for the government, but imposed an additional financial responsibility on companies.

Key Features of DDT

Legal Basis : DDT was implemented under Section 115-O of the Income Tax Act, 1961.
Tax Payer : This tax was paid by companies or mutual funds, not investors.
Applicable Area : Only domestic companies and mutual funds distributing dividends.
Payment Deadline : Taxes were required to be paid within 14 days of the declaration or payment of dividends.
Indirect Impact : Investors were not required to pay taxes directly, but received the dividend amount only after tax deductions.
Main Objective : Simplify tax collection and stabilize government revenues.

How Corporate Dividend Tax Was Calculated

Whenever a company wanted to pay a dividend to its shareholders, it first had to determine how much tax it would have to pay to the government on that amount. Corporate Dividend Tax was calculated using the “Gross-up Method.

Formula : DDT = (Declared Dividend × Tax Rate) / (1 − Tax Rate)

Example : Suppose a company declared a dividend of ₹100,000. According to the tax calculation, the investor should receive ₹100,000 after the company pays taxes on this amount. Therefore, the tax calculation was as follows

Description	Calculation	Amount (₹)
Dividend declared (receivable by the investor)	–	1,00,000
Tax Rate	–	15%
Grossed-up Base	1,00,000 ÷ (1 − 0.15)	1,17,647
Dividend Distribution Tax (DDT)	1,17,647 − 1,00,000	17,647
total company expenses	Dividend declared + DDT	1,17,647

Dividend Distribution Tax Rate in India – Historical Timeline

Dividend Distribution Tax (DDT) was first introduced in India in 1997. At that time, the tax rate was set at 10%. Its purpose was to simplify the tax process on dividend income so that the tax could be collected directly at the company level.

Evolution of Rates

Year/Period	Nature of Change
1997–2000	First time application rate 10%
2000–2002	DDT abolished
2003–2006	DDT reintroduced, rate increased
2007–2015	Rate increased to 15% (surcharge and cess exclusive)
2016–2019	Additional tax added on high income earners
After 2020	DDT completely eliminated

The Abolition of Dividend Distribution Tax in 2020

The government has implemented a major reform of the dividend tax system, completely eliminating the Dividend Distribution Tax (DDT). Previously, this tax was paid by companies, leading to double taxation once on company profits and again when dividends were distributed. It was removed to reduce this burden and make the tax structure more equitable.

How does the new system work?

Companies no longer have to pay any tax when they pay dividends.
Instead, the dividend received by an investor is considered part of their total income.
It is now taxed according to the investor’s income tax slab rate.
This change reduced the tax burden on companies and shifted the tax responsibility to the investor.

Pros and Cons of the Dividend Distribution Tax Regime

Aspect	Pros	Cons
Tax collection process	Tax collection became easier for the government as DDT was collected directly from companies.	Additional tax burden on companies increased, which reduced profits.
Investor convenience	Investors received dividends after tax deduction, so they did not have the hassle of tax filing.	The actual returns to investors were reduced because the company paid the tax in advance.
Stability of revenue	Every time a dividend was declared, the government received a fixed amount of tax, which kept the revenue stable.	Due to high tax rates, many companies opted for buybacks instead of paying dividends, which affected tax collection.
Transparency	Paying taxes at the company level kept the process clear and consistent.	Foreign investors suffered losses because they were unable to take credit for taxes paid in India in their own country.
Impact of the tax system	Initially, DDT simplified the tax system and made compliance easier.	Due to double taxation, this system became cumbersome and ineffective over time.

Old vs. New Dividend Tax Regime

Aspect	DDT Regime	Investor-Based Taxation
Who paid the tax	The company used to pay tax (Dividend Distribution Tax)	Now the investor pays tax as per his income tax slab
Tax rate structure	Effective rate	Slab rates vary according to income
Tax deduction process	The company used to pay DDT before paying a dividend.	TDS is deducted on dividends above ₹5,000
double taxation	Yes, indirect impact on both the company and investors	No, tax is now levied only on the investor’s income
Impact on foreign investors	Disadvantageous because tax credits could not be claimed	Beneficial, now tax credits can be claimed easily
Impact on the company’s cash position	Tax burden on the company, which reduced cash flow	Reduced tax burden, dividend policy becomes more flexible
Transparency of the system	Limited, as the tax would stop at the company level	More transparent, as taxes are directly reflected in investor income

Conclusion

Previously, the dividend tax system was a bit complicated. Companies paid the tax, while investors’ earnings were also reduced. When the government removed this, the entire structure became simpler and more transparent. Now, the tax is levied where the income is earned, in the hands of the investor. This reduced pressure on companies and provided greater clarity to investors. Overall, this change proved to be a correct and necessary step for the market.

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Frequently Asked Questions (FAQs)

Who was responsible for paying DDT?
DDT was paid by the company or mutual fund, not the investor.
Why was Dividend Distribution Tax removed?
It was removed to eliminate double taxation and make the tax structure transparent.
How are dividends taxed now?
Dividends are now added to the investor’s income and taxed according to their income tax slab.
What was the main disadvantage of DDT?
Taxing the same profit twice increased the burden on both companies and investors.

October 27, 2025

What is a Confidential IPO Filing?

Financial Data of a company plays a key role for an investor willing to invest in a company. And in case a company is going public for the first time, DHRP plays a key role for them to analyse the company. However, with the recent introduction of Confidential Pre-filing DHRP, the general public does not get insight into the company’s key financial data.

In today’s blog, we will introduce a concept called “Confidential IPO Filing” by a company, along with its key benefits and risks.

Meaning of Confidential IPO Filing

A confidential IPO Filing is a process in which a company submits its IPO document, known as the Draft Red Herring Prospectus, to the Securities and Exchange Board of India. But this filing is not made public. This process allows the company to evaluate the feedback from the regulating authorities. This is a part of the pre-IPO process.

How Does the Confidential IPO Process Work?

The working of the Confidential IPO is mentioned below:

Appointing Merchant Banker: Appointment of a merchant banker or lead manager is the first step towards the IPO filing process. They help in preparing the draft red hearing prospectus (DRHP).
Submission of DRHP: Once the merchant banker prepares the DRHP then it must be filed with the SEBI without disclosing the details to the public. This document carries key parameters of the company’s financial ratios, business model, etc.
Review by SEBI: After the documents are submitted to SEBI, they will be reviewed by SEBI. And if there are any observations, they will be made to the merchant banker and the company.
Revised DRHP: In case of any observation by the SEBI, it will be rectified on an immediate basis, and the revised DRHP will be filed with SEBI.
Public Issue: Once the DRHP is approved by the SEBI, then the company is ready to go ahead with its public issue and can make a public announcement of its issue.
Listing: As soon as the IPO allotment process is completed, the company can get its shares listed on the exchanges.

Difference Between Confidential and Traditional IPO Filing

The key differences between confidential and traditional IPO filings are as follows:

Particular	Confidential IPO Filing	Traditional IPO Filing
Filing	The IPO filing is done privately.The company files a public version later, after addressing SEBI’s comments.	The IPO is filed publicly, and every investor gets to know about the details. All details are visible to investors from day one.
Flexible	It offers great flexibility. The company can delay or modify the IPO.	Any withdrawal of the IPO by the company comes to the knowledge of the public and can impact the company’s reputation significantly.
Speculation	This can avoid speculation by the public, as early details are not available.	Because of the availability of early IPO details, the chances of speculation related to the grey market premium will increase.
Suitability	The confidential IPO filing is suitable for micro, small, and medium-scale companies.	These types of IPOs are generally opted for by large companies.
Information	The chances of getting the details are very low, since the filings are not disclosed publicly.	All financial, operational, and risk disclosures are public from the start, open to competitors and the media.

Benefits of Confidential IPO Filing

The key benefits of confidential IPO filing are as follows:

Privacy: Through a confidential IPO filing, the companies can keep their important data private at the early stage of the IPO process. This can help them avoid getting unwanted attention from the competitors.
Improve Final Draft: Confidential IPO filing helps in making necessary corrections before making the issue public.
Less Media Coverage: Companies can easily prepare for their public issue without worrying about the media coverage, market speculations, etc.

Risk of Confidential IPO Filing

There are significant risks related to Confidential IPO filing for the companies, a few of which are mentioned below:

Lack of Investors’ Feedback: Due to the limited availability of information, the investors’ feedback is not available to the company.
Risk of Insider Trading: Although SEBI mandates strict confidentiality, sensitive details shared with intermediaries like merchant bankers or auditors could still be at minor risk of misuse.
Trust: Because of secrecy, it can sometimes lead to the creation of a perception among the investors that the company is hiding something.

Is a Confidential IPO Filing Allowed in India?

Yes, the Confidential IPO filing is allowed in India according to the regulations specified by the Securities and Exchange Board of India (SEBI) in November 2022. The regulations are defined under “Pre-Filling of Offer Document”. According to this regulation, a company can submit their draft document to SEBI without making it public.

Conclusion

On a concluding note, through Confidential IPO Filing, companies can smartly go public. They can file their IPO documents with SEBI without letting the public be aware of it. It allows the company’s management to fine-tune the errors in the IPO document without having any impact on its reputation. This mechanism was introduced by SEBI in November 2022. However, this IPO filing benefits the company directly; along with this, it also carries certain disadvantages for them. Hence, an investor should consult their investment advisor before making any investment in an IPO and go through their prospectus.

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Frequently Asked Questions (FAQs)

Is a confidential IPO allowed in India?
Yes, a confidential IPO filing is allowed in India after it was introduced by SEBI in 2022.
Who can opt for confidential IPOs?
Confidential IPOs can be filed by any company. However, they are generally filed by companies in the IT and pharma sectors.
When does an investor get to know about the confidential IPO filed by a company?
When the company launches their marketing campaign about the IPO after incorporating the regulatory feedback from the SEBI. The general investor or public gets to know about it.
Can a company withdraw their IPO after its filing with SEBI?
Yes, a company can easily withdraw their IPO after its initial filing with SEBI. This step is generally taken by the company when they think market conditions are not favourable or require significant changes.
Can an investor have access to the Pre-filing DHRP of a company filing a Confidential IPO?
No, an investor does not have any access to the Pre-filing DRHP of a company filing it confidentially. They are reviewed by the SEBI privately.

October 26, 2025

How to Start Algorithmic Trading?

When it comes to trading, it is not just about selecting the right stocks. But it is also about selecting the right trading strategy so that you can earn more. This is where algorithmic trading comes into play. Allowing you to trade using the computer softwares, it allows you to earn better. Also, it avoids the chances of missing small opportunities.

In fact, in the past few years, algorithmic trading in India has grown rapidly. It is more common these days. People are able to trade with no need for constant checks. This saves time and ensures better results for starters as well.

But do you know how you start algo trades? Well, if you are also looking for the answer, read this guide. Know how to do algo trading and all the details you need here in this guide.

What Is Algorithmic Trading?

Algorithmic trading is simply using computer programs. It uses proper strategies with algorithm analysis to make trade calls. This is valid for the buy and sell . You can use it in the stock market easily and save time. It’s fast, disciplined, and helps you trade without letting emotions take over.

Key Features

Automatic Execution: Set the rules once, check, and get going ahead.
Data-Driven Decisions: Say yes to logic and facts and no to guesswork.
High Speed: Algorithms react to market changes within milliseconds.
Error-Free Trading: Reduces mistakes that usually come with manual trading.
24/7 Monitoring: Keep an eye on markets even when you are not online.
Customisable Strategies: Design your strategies based on what you need.

Read Also: Best Algorithmic Trading Books

Step-by-Step Guide to Starting Algorithmic Trading

Getting started with algorithmic trading may sound technical at first. But this is not true. You need to start with logic. Once you know, you can start with algo trading easily.

Here’s how to begin your journey into algorithmic trading in India in a simple, structured way.

Step 1: Learn the Basics

Every great trader starts with the fundamentals. The same is applicable when you start algo. Learn how markets move, what triggers price changes, and how trading instruments work. You should understand market orders, stop loss, indicators, and strategy design.

Ensure that you check the SEBI rules for algorithmic trading. This means margin requirements, trade limits, and order approvals. This will help you trade confidently and within regulations.

Step 2: Pick a Programming Language

You don’t need to be a developer to get started. Even if you do not know how to code, you can start algo trading. The most common language used in it is Python. You will find multiple pre-made strategies and tools that you can use to automate the trades.

Then there are powerful libraries like Pandas, NumPy, and TA-Lib for analysis. The no-coding ones are great for beginners. This will help you learn how to do algo trading.

Step 3: Select a Trading Platform

Once you understand the basics, choose where your algorithm will run. To learn algo trading, you can go for:

API-Based Platforms: You will get full control over strategies. This is good for experienced traders.
Broker-Integrated Platforms: You will get the readymate tools to use. This is better for new people in algo trading.

Select a SEBI-registered broker only. This will avoid the chances of any issues or penalties. Hence, compare and take time to find the right one.

Step 4: Build Your Trading Strategy

Your algorithm is only as good as your strategy. So, you must first start with a simple one. This can be based on any of the following ideas:

Trend Following Strategy: Uses indicators like moving averages or MACD to follow price direction.
Arbitrage Strategy: Exploits small price differences between related securities.
Mean Reversion Strategy: Works on the idea that prices tend to return to their average value.

Keep it simple in the beginning and refine as you gain experience.

Step 5: Backtest Before You Trade

Before going live with algorithmic trading in India, ensure you test. This is known as backtesting. Here you will check your strategy on the past data. It will be during different time periods. The idea is to know if it works well or not.

You can use platforms for real simulations as well. Once you get a positive outcome of your testing, you can start working in the market.

Step 6: Try Paper Trading

After backtesting, start paper trading. Here you will use simulated money instead of real money to do trading. When you start algo trading in India this way, you can avoid the risk of losses. You can learn, and when you are sure, you can start real trading in the market. This step lets you observe order speed, data accuracy, and execution quality, preparing you for actual trades.

Step 7: Open a Trading Account with API Access

To execute automated trades, open a Demat and trading account with a broker. Ensure that the broker offers you API access like Pocketful. This is important to sync algo trading strategies. Complete KYC and link your bank account. Now, apply for API keys. These keys connect your algorithm directly to the broker’s system, allowing safe and fast trade execution.

Step 8: Go Live and Monitor

When everything is ready, start small. Deploy limited capital and monitor how your strategy performs in live markets. Keep checking for system errors, delays, or data mismatches. Ensure that you are monitoring as well. This is key to ensuring better results from trades.

Read Also: Top Algorithmic Trading Strategies

Pros and Cons of Algorithmic Trading

Like every trading method, algorithmic trading has its strengths and limitations. So, here are the key ones that you should be aware of:

Pros of Algorithmic Trading

Faster Execution: Algorithms analyse the trades faster. They can check millions of data in seconds. So, the chances of making mistakes are reduced and you gain better outcomes.
Emotion-Free Decisions: Automated systems follow logic, not feelings. This ensures consistency and prevents impulsive trades.
High Accuracy: You just need to define the logic once. Then the system will work on trading on its own. There is low human intervention needed.
Backtesting Capability: Before you trade live, you can test your strategy. This is on the past data, but gives assurance. The better the results, the higher the chances of performance.
Scalability: You can manage multiple trades or instruments. All this can be done at once and this will help with profits.
Learning Advantage: When you learn algo trading, you gain both market knowledge and technical skills that can enhance your long-term trading performance.

Cons of Algorithmic Trading

Technical Complexity: Building or customising algorithms is not easy. You must know logic and code. A mistake can lead to losses.
System Failures: Even well-designed systems can malfunction. This can be due to the internet or software problems. This can lead to delays.
Over-Optimization Risk: Excessive fine-tuning can be bad. It will make the strategy valid for certain situations only. This will consume time as well.
Market Volatility: Algorithms may react too quickly to false signals. Such instances can lead to losses or even miss out on better opportunities.
Initial Investment: Setting up tools, APIs, and software for algorithmic trading in India involves upfront costs that beginners should plan for.

In short, when you start algo, the key is balance in how you combine technology with strategy. You must monitor regularly and never rely entirely on automation. This will help to ensure better outcomes.

Read Also: Best Algo Trading Platform

Conclusion

Algorithmic trading brings structure, speed, and discipline to every trade. For anyone exploring algorithmic trading India, the key is to learn first. Start small, and then you can go in with higher capital.

Once you learn algo trading, you’ll see it’s more about logic than luck. With the right guidance from Pocketful, you can build confidence, automate smarter, and grow steadily with every trade.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	What is Insider Trading?
2	What is Options Trading?
3	What Is Day Trading and How to Start With It?
4	What is Quantitative Trading?
5	How to Trade in the Commodity Market?
6.	What is Price Action Trading & Price Action Strategy?
7	Is Algorithmic Trading Legal and Profitable in India?
8	Best AI-Based Trading Strategies Explained
9	How to Backtest Trading Strategy – Tools, Tips & Examples
10	Highest Rated Trading Apps in India

Frequently Asked Questions (FAQs)

Is algorithmic trading legal in India?
Yes, SEBI allows algorithmic trading. But you must work with a registered broker or APIs only.
How can I start algo trading as a beginner?
You can start algo trading easily. There are platforms that help you learn with simulation. Then you can go in with a small amount and start trading eventually.
Do I need coding skills for algo trading?
Not always. Many no-code tools are there that can help with the algo trading. Just ensure you test the same before you start.
What are the benefits of algorithmic trading?
It improves accuracy, reduces emotional decisions, and executes trades faster.
How much money is required to start algo trading in India?
You can start with a small capital, usually between ₹10,000 and ₹25,000, depending on your strategy.

October 26, 2025

Best Material Stocks in India

Whenever you look around India, one thing is clear construction is taking place everywhere. New roads are being built, flyovers, and new housing projects. This is why the materials sector (materials sector stocks) is in the news these days.Building material stocks like steel, cement, pipes, tiles, and adhesives are no longer just part of construction, but have become the engines of the country’s growth. In this blog, we’ll discuss the best material stocks in India for 2025 which could create significant opportunities for investors in the future.

What Are Material Stocks?

Material stocks are shares of companies that produce materials used in basic construction and manufacturing, such as steel, cement, glass, pipes, tiles, and adhesives. These companies transform raw materials into solid forms for further use in infrastructure, housing, manufacturing, and industry. Simply put: when a new house is built, a road is constructed, or a factory is opened, companies in this sector must procure the materials. For this reason, building material stocks and the broader materials sector remain important investment options.

Best Material Stocks in India (2025)

S. NO.	Company	Current Market Price (INR)	Market Capitalisation (in INR crore)	52-Week High	52-Week Low
1	UltraTech Cement Ltd	₹ 12,305	₹ 3,62,602	₹ 13,097	₹ 10,048
2	JSW Steel Ltd	₹ 1,142	₹ 2,79,466	₹ 1,179	₹ 880
3	Tata Steel Ltd	₹ 174	₹ 2,17,937	₹ 178	₹ 123
4	Grasim Industries Ltd	₹ 2,884	₹ 1,92,882	₹ 2,914	₹ 2,276
5	Vedanta Ltd	₹ 482	₹ 1,88,715	₹ 527	₹ 363
6	Ambuja Cements Ltd	₹ 569	₹ 1,40,274	₹ 625	₹ 453
7	Shree Cement Ltd	₹ 28,980	₹ 1,04,525	₹ 32,490	₹ 23,500
8	Jindal Stainless Ltd	₹ 803	₹ 66,275	₹ 819	₹ 497
9	Berger Paints India Ltd	₹ 540	₹ 63,051	₹ 605	₹ 438
10	UPL Ltd	₹ 683	₹ 54,431	₹ 741	₹ 493

(Data as of 23 Oct 2025)

Read Also: Best Manufacturing Stocks in India

A brief overview of the Best Material Stocks in India is given below:

1. UltraTech Cement Ltd

UltraTech Cement‘s story is deeply intertwined with India’s construction sector. Founded in 1983, the company is today considered one of the country’s most trusted cement brands. Headquartered in Mumbai, UltraTech is part of the Aditya Birla Group and has a presence in almost every state. The company has established itself not just as a cement manufacturer, but as a symbol of quality and durability. UltraTech’s contribution is visible across India’s major infrastructure projects whether highways or housing construction. Gradually, the name has become synonymous with the country’s strength and growth.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
14%	94.41%	165.19%

(Data as of 23 Oct 2025)

2. JSW Steel Ltd

JSW Steel is one of the companies in India’s steel industry that has given a new direction to the country’s industrial identity. Established in 1982, the company has today become synonymous with modern steel production. As part of the Mumbai-based JSW Group, it has carved a niche for itself by combining technology, quality, and innovation. The company’s plants are spread across India and it is considered the backbone of the construction, automobile, and infrastructure sectors. The hallmark of JSW Steel is its visionary approach – its ability to turn every change into an opportunity. This is why this name has become the pride of Indian steel today.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
18.85%	87.01%	250.77%

(Data as of 23 Oct 2025)

3. Tata Steel Ltd

When we talk about India’s industrial history, Tata Steel’s name comes first. Its foundation was laid by Jamsetji Tata in 1907, when the steel industry did not exist in the country. Its first plant in Jamshedpur showed India the path to self-reliance. This Tata Group company has always identified itself with trust, integrity, and quality. For years, it has not only manufactured steel but also promoted the “Tata values” that are the backbone of India’s industry. Today, Tata Steel is not just a company, but has become a story of the nation’s growth and trust.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
16.22%	71.87%	323.22%

(Data as of 23 Oct 2025)

4. Grasim Industries Ltd

Grasim Industries is the flagship company of the Aditya Birla Group, one of India’s oldest and most prestigious industrial conglomerates. It was established in 1947, when the country was just beginning its industrial journey after independence. The company initially began its foray into textiles, but gradually expanded into sectors such as cement, chemicals, and fibers. Today, Grasim is recognized as a company that has mastered the art of blending tradition and modernity. Over the years, it has been a reliable contributor not only to the industry but also to the country’s economic progress.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
8.64%	69.79%	264.71%

(Data as of 23 Oct 2025)

5. Vedanta Ltd

Vedanta Ltd is one of the few Indian companies that has shaped the country’s natural resources sector. Founded in 1976 and headquartered in Mumbai, Vedanta began as a small mining firm, but today it is active in various sectors, including oil, gas, metals, zinc, aluminum, and power. Vedanta has established itself as an organization that believes in responsible resource use and technological innovation. It has not only increased energy supply for India’s industrial development but also created employment and development opportunities in local communities. This is why Vedanta is considered a vital part of India’s progress.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
4.93%	69.24%	357.51%

(Data as of 23 Oct 2025)

6. Ambuja Cements Ltd

The story of Ambuja Cements began in 1983, when the construction sector in India was slowly growing. The beginnings were small, but the ambitions were big to produce superior cement and lay a foundation of trust. Within a few years, Ambuja earned the trust of the people through its work. Today, the name is not just a company, but an identity that is associated with the strength of every building. Headquartered in Mumbai, it has a presence across the country. Ambuja’s greatest strength has been its quality-first approach and its commitment to maintaining balance with the environment.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
1.29%	9.95%	122.50%

(Data as of 23 Oct 2025)

7. Shree Cement Ltd

Shree Cement was founded in Rajasthan in 1979, when the cement industry in India was not yet fully organized. Initially, it was a small company, but its honest work ethic and dedication to quality gradually gained recognition across the country. Today, Shree Cement is among the few companies that have built their reputation without much fanfare. The company’s focus on superior technology and energy efficiency has always set it apart from others. With its “low cost, high productivity” model, Shree Cement has now become a strong foundation of India’s cement industry, a foundation upon which the nation relies.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
18.54%	41.82%	36.57%

(Data as of 23 Oct 2025)

8. Jindal Stainless Ltd

Jindal Stainless Ltd was founded in 1970, when the use of stainless steel in India was very limited. At that time, the company reshaped the industry and gradually established itself not only domestically but also globally. Originating in Hisar, Haryana, the company has now become the largest manufacturer in India’s stainless steel sector. Jindal Stainless is characterized by its reliance on innovation and a strict quality approach. The company produces high-grade stainless steel used in automobiles, railways, construction, and household appliances. With its extensive experience and innovative thinking, Jindal Stainless has become a vital part of India’s industrial development story.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
22.85%	495.86%	1,267.10%

(Data as of 23 Oct 2025)

9. Berger Paints India Ltd

Berger Paints India Ltd was founded in 1923, when the paint industry in India was still in its infancy. At that time, it was a small company, but gradually gained recognition across the country for its innovation and quality of colors. Headquartered in Kolkata, Berger Paints is today considered one of India’s most trusted paint companies. The company’s focus has always been on providing customers with superior and sustainable solutions whether it’s interior paint or industrial coatings. Over its 100-year journey, Berger has proven that color can transform not just walls, but people’s lives.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
0.88%	11.71%	6.31%

(Data as of 23 Oct 2025)

10. UPL Ltd

UPL Ltd, formerly known as United Phosphorus Limited, was founded in 1969. At that time, India’s agricultural products and pesticide production was limited, but UPL pioneered a new approach. Based in Mumbai, the company is today one of the world’s leading providers of agri-chemicals and sustainable farming solutions. UPL’s mission has always been to provide farmers with technologies and products that protect crops and increase yields. With its innovation, environmentally friendly approach, and global presence, UPL Ltd is no longer just a company, but a powerful story of India’s agricultural revolution.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
34.41%	10.37%	55.20%

(Data as of 23 Oct 2025)

Read Also: Best Textile Stocks in India

Key Performance Indicators (KPIs)

The key performance metrics of the Best Material Stocks in India are mentioned below:

Company	Operating Margin (%)	Net Profit Margin (%)	ROE (%)	ROCE (%)	P/E (x)
UltraTech Cement Ltd	12.22	7.96	8.54	9.16	56.06
JSW Steel Ltd	8.46	2.25	4.44	7.93	74.04
Tata Steel Ltd	7.51	1.36	3.75	8.49	56.29
Grasim Industries Ltd	15.67	5.02	3.80	5.86	46.99
Vedanta Ltd	22.82	13.42	36.36	26.92	11.89
Ambuja Cements Ltd	17.53	14.68	7.79	9.16	31.67
Shree Cement Ltd	7.86	5.82	5.21	6.67	98.02
Jindal Stainless Ltd	10.17	6.46	15.01	17.46	19.12
Berger Paints India Ltd	13.83	9.94	19.18	23.64	49.38
UPL Ltd	11.44	2.77	3.07	8.97	64.59

(Data as of 23 Oct 2025)

Why Material Stocks Are Important for Investors in 2025 ?

In India, it’s not just long-term investment that matters, but timely investment – and the materials sector is making significant strides in that direction. For example, Budget 2025-26 targets infrastructure investment at ₹11.21 lakh crore (US$128.6 billion), representing approximately 3.1% of the economy. This investment isn’t limited to roads and bridges, but extends to new housing projects, smart cities, logistics, solar, and metro networks. Consequently, companies manufacturing material stocks such as steel, cement, and adhesives and pipes are likely to benefit directly. Furthermore, input costs in this sector are improving, with manufacturing units adopting more integrated and low-cost models, resulting in a better return-on-investment profile.

Risks & Challenges in Material Stocks

Fluctuations in Raw Material Prices : Material companies’ earnings are directly dependent on the prices of coal, petcoke, iron ore, and electricity. When these costs rise, profit margins immediately come under pressure. Therefore, it is important to constantly monitor input costs.
Risk of Demand Volatility : This sector is linked to infrastructure and real estate. If government spending decreases or construction projects are delayed, sales may decline, impacting companies’ growth.
Increasing Competition and Overcapacity : Many new players have entered the market in the past few years. This has increased price pressure, and some companies have over-expanded production capacity, which could reduce profits.
Impact of Government Policies and Tax Changes : Changes to tax structures or carbon regulations by the government can increase costs. For example, the new carbon tax impacts the operating costs of cement and metal companies.
Energy Costs and Environmental Regulations : This sector is highly dependent on electricity and fuel. Increased energy prices or environmental compliance costs can increase production costs. Companies are now forced to invest in green energy and waste heat recovery.
Impact of Global Markets and Currency Rates : Many Indian material companies export, so their earnings can fluctuate due to changes in international demand or the dollar-rupee exchange rate. Steel and aluminum companies are particularly vulnerable to this risk.
Capital Costs and Interest Rates : This is a capital-intensive sector, requiring significant investment. If interest rates rise or funding becomes expensive, both project costs and debt increase, which can reduce net profits.

Read Also: Best Silver Stocks in India

What to Consider Before Choosing Material Stocks

Analyze the company’s financial position : Before selecting any material stock, review its balance sheet. Low debt, consistent profits, and a good ROCE (Return on Capital Employed) indicate long-term sustainability of the company.
Understand raw material costs and sourcing : The earnings of steel, cement, or pipe companies depend on their input costs. Companies with their own mineral sources or long-term supply contracts are better at controlling costs.
Monitor sector demand and economic cycles : It is important to understand future demand in the sector the company operates in. Government infrastructure plans and real estate growth are the biggest drivers for this sector.
Trust the credibility and experience of management : The transparency and decision-making of the company’s leadership are crucial. Good management keeps debt under control and maintains growth trajectory even during difficult times.
Prioritize Sustainability and Energy Efficiency : Investors are now choosing companies that are adopting green energy and carbon reduction technologies. This not only reduces costs but also mitigates future regulatory risks.
Pay Attention to Dividend and Return Policy : Companies that pay regular dividends or conduct share buybacks are generally financially strong. This provides investors with reliable cash flow.
Balance Risk with Diversification : Avoid investing all your money in a single sector. Maintaining a balanced portfolio across sectors such as cement, steel, pipes, and adhesives provides lower risk and greater stability.

Conclusion

India’s materials sector has become the true foundation of the country’s progress. Whether it’s steel, cement, or building materials companies, each brand is shaping India’s growth story in its own right. Growing demand for infrastructure and housing will further strengthen these companies in the coming years. It’s time for a savvy investor to understand this sector deeply and trust the right companies because these are the industries that will shape the future of India.

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Frequently Asked Questions (FAQs)

What are material stocks?
Companies that produce raw materials used in construction.
Which are the top material stocks in India for 2025?
UltraTech, JSW Steel, Tata Steel, Shree Cement, and Berger Paints.
Are material stocks good for long-term investment?
Yes, these are considered stable investments for the long term.
What should investors check before investing?
Look at the company’s reputation, costs, and management.
Do material stocks face risks during a slowdown?
Yes, profits may decline if demand decreases.

October 25, 2025

What Is High-Frequency Trading (HFT)?

When thousands of trades are completed in the blink of an eye, this is the true speed of High Frequency Trading (HFT). It uses advanced algorithms and superfast computers, which make trading decisions in just a few microseconds. Today, approximately 60% of transactions in the Indian stock market involve HFT trading and algo trading. In this blog, we’ll explore what is HFT, how it works, which HFT companies are leading the way, and what its growing influence in India indicates.

What is High-Frequency Trading?

HFT or High-Frequency Trading, is an advanced trading technique that uses high-speed computers and complex algorithms to execute orders extremely quickly, sometimes thousands of trades per second. Human intervention is virtually nonexistent, as the entire process is fully automated.
Speed and Co-location Advantage: HFT’s greatest strength is its speed. As soon as market data is generated, these systems process it within microseconds and execute trades instantly. Co-location also plays a significant role when an HFT company’s server is located very close to the exchange’s server. This reduces data transmission time and can yield milliseconds of trading gains.

Read Also: Top Algorithmic Trading Strategies

How Does High-Frequency Trading Work?

Real-Time Data Feeds: HFT systems read live price quotes, order-book updates, and trade ticks from the exchange in microseconds. The faster and cleaner the data, the faster the algorithms can identify opportunities.
Signal Generation: Quant models look for patterns in the incoming data such as minor price mismatches, order-book imbalances, or short-term momentum. Many firms now also use adaptive ML models so that the models can update themselves in response to changing markets.
Order Routing & Execution: As soon as a signal is received, the system immediately creates an order and sends it to the exchange’s matching engine. Orders are changed or canceled at the same speed. The goal is to achieve entry/exit speed while minimizing slippage, even with very small price gaps.
Co-location & Low-Latency Infra: To reduce latency, servers are co-located within/near the exchange’s data center. Packet processing is further accelerated using high-speed fiber, microwave/millimeter-wave links, smart NICs, and sometimes FPGA-based computing.
Risk Controls & Compliance: Strict guardrails operate with speed—maximum position limits, kill switches, order-rate limits, and real-time P&L/variance checks. This allows the system to immediately reduce exposure in the event of an error or malfunction and ensure compliance with regulatory requirements (e.g., OTR, logging, circuit breakers).
Monitoring & Post-Trade Analytics: Granular analysis of latency, fill rates, and slippage is performed after a trade. This data is what tunes models next time—which venues are faster, which strategies work best at what time, where to optimize the network/code, etc.

HFT Process Flow Table

Step	Description	Goal
Data Collection	Acquire and process live market data in real time	Making decisions based on the latest information
Signal Generation	Identifying patterns or opportunities through algorithms	Finding potentially profitable trades
Order Execution	Send or cancel trade orders in microseconds	Fastest transaction completion time
Co-location Setup	Keeping the server close to the exchange	Minimizing Latency
Risk Controls	Enforcing trading limits and security checks	Protection against damage and system errors
Post-Trade Analysis	Post-trade performance data analysis	Improving the algorithm for the next trades

Read Also: Best Algo Trading Platform

Key Strategies Used in HFT

High-Frequency Trading (HFT) isn’t just a game of fast computers and algorithms; its true strength lies in its strategies. Each HFT firm develops unique strategies to make profits by making accurate decisions in microseconds.

1. Market Making

In this strategy, HFT firms maintain liquidity in the market by continuously placing orders on both the bid and ask sides. Profits are generated from the small spread between the bid and ask. For example, if a stock is being bought at ₹100 and sold at ₹100.05, the HFT system profits by replicating this small spread multiple times.

2. Statistical Arbitrage

This strategy is based on mathematical models and data patterns. The system searches for temporary price gaps in two or more related stocks or indices.

3. Latency Arbitrage

This strategy relies solely on a speed advantage. HFT firms co-locate their servers to minimize data transfer delays. If a price change is first visible on one exchange, and another exchange shows it a few microseconds later, the system can immediately capitalize on the earlier change.

4. Momentum Ignition

In this strategy, the system identifies an ongoing trend and trades in that direction to capture market momentum. Sometimes, the system attempts to trigger momentum by placing small orders, as if to signal increased buying in the market.

5. Event-Based Arbitrage

Whenever major news breaks, such as RBI policies, company quarterly results, or economic data, the HFT system immediately reads the news and trades within seconds.

For example, if a company’s profits are better than expected, the system can immediately buy its shares, even before humans can react to the news.

6. Liquidity Detection

Some HFT models attempt to predict when and where large institutional investors are likely to place orders. If the system detects a buy order from a large fund, it preemptively positions in that direction. This allows the HFT firm to profit from market movements before they even begin.

HFT in India: Growth, Regulations & Major Players

Current Situation : Algorithmic/high-frequency trading is now a significant part of the market in India. According to some reports, approximately 55–60% of total trades on the NSE/BSE are believed to be algo/HFT-based. This figure may vary depending on the segment and source, but the dominance of fast-trading is clear.
Major Firms (Who’s Active) : Both international and domestic prop-trading and HFT firms are active in India. Examples include Tower Research, QuadEye Securities, Graviton Research/Graviton Capital, AlphaGrep, and Estee Advisors; these firms focus on low-latency trading and quantitative strategies. (Lists and profiles are available in public sources).
Infrastructure and History : Co-location services in India, introduced around 2010, offered the potential to reduce server-based latency, contributing to the growth of HFT. The nature of co-location and data feeds made speed-based strategies viable. (This issue has also generated public scrutiny and controversy, which has been subject to appropriate regulatory scrutiny.)
Regulations and Reforms (SEBI’s Approach) : SEBI has tightened the requirements and monitoring protocols for algorithmic/HFT activities, including co-location access, order-to-trade limits, audit trails, and agency/broker-level transparency. Additionally, SEBI has published recommendations/advisories on a framework for algorithmic trading for retail investors to balance risk and transparency.

HFT vs. Algorithmic Trading

Aspect	High-Frequency Trading (HFT)	Algorithmic Trading
Definition	Ultra-fast technology, executing trades in microseconds.	The process of automatically placing trades according to set strategies or rules.
Speed	Extremely fast—trades in microseconds or milliseconds.	Relatively slow trades can take seconds, minutes or hours.
Goal	Making repeated profits from small price differences.	Making decisions based on long-term strategies.
Technical Requirement	High-speed servers, co-location and low-latency networks.	Also possible with common server and brokerage APIs.
Risk level	Very high dependent on speed and technical errors.	Relatively low dependence on the success of the strategy.
User	Large institutional firms or quant trading houses.	Used by both retail and professional traders.
Regulation	Strict monitoring by SEBI and the exchange.	Relatively simple regulatory oversight.

HFT vs. Traditional Trading

Aspect	High-Frequency Trading (HFT)	Traditional Trading
Method of trading	Fully automated done by algorithms and computers.	Manual Humans place orders and make decisions.
Speed	Thousands of trades in microseconds.	Limited trades in minutes or hours.
Decision making process	Based on data and machine learning models.	Based on experience, emotions and market sentiment.
Cost	Very low spreads and minimal fees.	Relatively high due to time, brokerage and manual errors.
Risk	Major losses are possible due to technical glitches and wrong codes.	The potential for harm due to human judgment or emotional error.
Accuracy	Highly accurate, as there is no human intervention.	Limited accuracy, human error possible.
User	Institutional investors and quant trading firms.	Retail investors and traditional traders.
Control and monitoring	Under high-level surveillance systems and regulatory rules.	Less oversight, relying on individual responsibility.

Benefits of High-Frequency Trading

Improved Market Liquidity: HFT firms continuously place buy and sell orders, ensuring buyers and sellers are present in the market at all times. This reduces the bid-ask spread (the difference between the buy and sell prices) and allows investors to obtain better deals. Consequently, the presence of HFT makes the market more liquid and active.
Faster Price Discovery: When news or economic data is released about a company, HFT systems immediately identify it and trade accordingly. This helps the stock price reach the “right level” faster, meaning the market absorbs the new information more quickly. In the long run, this makes the market more efficient.
Lower Transaction Costs: HFT reduces trading spreads and increases execution speed, thereby reducing transaction costs. This benefits both large institutions and ordinary investors, as they are able to complete trades with a shorter timeframe.
Improved Competition and Transparency: The emergence of HFT firms has required brokerages and trading platforms to provide better technology and faster services. This not only increases competition but also brings transparency to the market. The record and execution of every trade can now be tracked within seconds.
Technological Improvements and Market Stability: Technologies developed for HFT such as low-latency networks, faster servers, and co-location systems are now strengthening the entire market infrastructure. These improvements have made trading more secure, stable, and faster.

Read Also: What is Scalping Trading Strategy?

Criticism, Risks & Controversies

Market Manipulation: Some firms use techniques like spoofing, i.e., misleading the market by placing fake orders. This can cause temporary price swings, leaving small investors at a disadvantage.The NSE co-location case demonstrated that unequal data access can impact “fair play.”
Risk of a Flash Crash: When thousands of algorithms work together, a technical or emotional movement can trigger a flash crash. This is what happened in the US in 2010, when the market plummeted by billions of dollars in a matter of minutes. Such accidents raise questions about market stability.
Unequal Access: HFT firms locate their servers very close to exchanges to gain a microsecond advantage. This makes it difficult for retail investors to compete, as “speed” becomes the driving force.
System Failures: Even a minor programming error can lead to losses worth crores. For example, in 2012, Knight Capital suffered massive losses in a matter of minutes due to a software bug. Therefore, firms now use real-time risk control and kill-switch systems.
Ethical and Regulatory Challenges: When some players profit solely through technological advantage, questions of fairness arise. If multiple HFT systems trade in the same direction, the market can become volatile. For this reason, regulators like SEBI are continuously increasing surveillance to ensure that the market remains transparent and balanced.

Conclusion

High-frequency trading has made the world of trading faster and more data-driven than ever before. Trades are now completed in the blink of an eye, and markets appear more dynamic than ever. This provides investors with better prices and liquidity, but it has also presented challenges such as technical glitches and unequal access. The way forward is to use technology wisely to keep markets both fast and fair for all.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	What is Insider Trading?
2	What is Options Trading?
3	What Is Day Trading and How to Start With It?
4	What is Quantitative Trading?
5	How to Trade in the Commodity Market?
6.	What is Price Action Trading & Price Action Strategy?
7	Arbitrage Trading in India – How Does it Work and Strategies
8	What is Spread Trading?
9	Silver Futures Trading – Meaning, Benefits and Risks
10	What Is an Option Contract?

Frequently Asked Questions (FAQs)

Is HFT legal in India?
Yes, HFT is fully legal in India and is regulated by SEBI.
How is HFT different from algorithmic trading?
HFT is based on speed, while algorithmic trading focuses on strategy and analysis.
Can retail investors use HFT?
Not directly, but some brokers now offer limited automation through API trading.
What are the main risks of HFT?
System failure, uneven data access, and market volatility are the main risks.

October 25, 2025

Top Gold Mutual Funds in India

Putting money in gold is a timeless tradition in India, but buying the jewellery or coins can have some concerns like safety, purity, and high making charges that can reduce your profits. What if you could get all the benefits of owning gold in a smarter, simpler, and digital way.

This is where we see the Gold Mutual Funds in the picture, by investing in gold mutual funds, you can invest in gold digitally. These funds are the modern way to invest in gold, where the investors can own pure 24-karat gold on their phone or computer, without ever needing a locker. These mutual funds can be perfect for beginners and smart investors who want the safety of gold without the old-school hassles.

In this blog we will understand what a gold mutual fund is. Also, this blog will explain to you how gold funds work, why starting a gold SIP is a great idea, and list some of the best gold mutual fund options available in India today.

Understanding Gold Mutual Funds

How Gold Mutual Funds Work

A gold mutual fund takes money from investors and then collectively invests in gold, here a fund manager manages the investment and gold on behalf of the investors. By investing in gold like this you can actually buy real gold without the hassle to store the gold.

In India gold mutual funds work as a ‘Fund of Funds’ (FoF) meaning:

You invest your money in a gold mutual fund.
The fund manager collects money from all investors like you.
They use this money to buy units of a Gold ETF (Exchange Traded Fund).
This Gold ETF holds real, 99.5% pure physical gold in very secure vaults.

By investing using this method you get pure gold and the value of your investments move up or down depending upon the price of gold in the market.

Read Also: Best Gold ETFs in India

Top 10 Gold Mutual Funds in India

Fund Name (Direct Plan – Growth)	AUM (Rs.Cr)	Expense Ratio (%)	1-Year Return (%)	3-Year Return (% p.a.)	5-Year Return (% p.a.)	Minimum SIP Amount (Rs.)
Nippon India Gold Savings Fund	4131	0.13	53.5	33.2	17.7	100
HDFC Gold Fund	6,329	0.18	54.3	33.3	18.01	100
SBI Gold Fund	7,033	0.10	53.7	33.3	18.03	500
Axis Gold Fund	1,557	0.17	53.0	33.04	17.94	100
Kotak Gold Fund	4153	0.16	53.75	33.18	17.9	100
ICICI Prudential Regular Gold Savings Fund	3,305	0.09	53.07	33.03	17.85	100
Aditya Birla Sun Life Gold Fund	909	0.20	53.55	33.50	18.08	100
DSP Gold Fund	194	0.66	52.47	N/A	N/A	100
Invesco India Gold Fund	244	0.10	51.85	32.84	17.75	500
Quantum Gold Fund	300	0.04	53.96	33.50	17.90	500

Data as of October 24th 2025

1. Nippon India Gold Savings Fund

This is the biggest gold fund in India and is also one of the oldest funds in India. Nippon gold fund gives customer returns that are closely matched to the performance of its underlying ETF, the Nippon India ETF Gold BeES.

2. HDFC Gold Fund

This is considered to be one of the most trusted fund houses of India, this fund invests in units of the HDFC Gold ETF. If you are looking for a reliable fund for your gold investments, this is the most popular choice.

3. SBI Gold Fund

This is the largest AUM in the gold funds category, which is backed by India’s most trusted bank, State Bank of India. This gold fund provides returns that correspond to the SBI Gold ETF.

4. Axis Gold Fund

Here, the fund invests in the Axis Gold ETF that copies the performance of physical gold. It allows investors to start investing in small SIP amounts.

5. Kotak Gold Fund

In this gold fund the returns are generated by investing in units of Kotak Gold ETF. This also acts as a diversified fund that combines gold and silver together to give broader precious metal exposure to the investors.

6. ICICI Prudential Regular Gold Savings Fund

This fund has the lowest expense ratio in this category and the fund generated its returns by investing in ICICI Prudential Gold ETF, making it cost-effective for the new investors.

7. Aditya Birla Sun Life Gold Fund

Here the returns are tracked based on the performance of Aditya Birla Sun Life Gold ETF, which offers another solid option from a well-known fund house.

8. DSP Gold Fund

Here the investment is done by investing in units of DSP Gold ETF and the returns are generated by this. For investors it is a simple way to invest in gold and diversify your portfolio.

9. Invesco India Gold Fund

In this gold fund the performance of Invesco India Gold ETF is tracked to get returns, it has a straightforward option for investors seeking to track gold prices.

10. Quantum Gold Fund

This fund invests in units of the Quantum Gold ETF and also has one of the lowest expense ratio compared to others which helps in cutting down the cost of investing and making increased profits.

Now that we have gone through some of the Top Gold Funds in India you might be thinking how can you invest in these gold mutual funds but platforms like Pocketful make this extremely simple for the investors as they can search for different gold mutual funds, complete their KYC digitally and start investing in different gold SIPs or even invest a lump sum amount. Pocketful gives a user-friendly interface to its users making investing in gold much easier.

Read Also: Best Gold Stocks in India

Benefits of Investing in Gold Mutual Funds

1. Simple & Secure Investment

By investing in these gold mutual funds investors don’t need to take on the headache of storing the gold safely. Here the fund house takes care of storing the gold in highly secured vaults; investments are stored in a digital format safely, making them safe from theft.

2. Diversified Portfolio

Gold mutual fund investments can help the investors in diversifying their portfolio. During the stress period, when the stock market might perform poorly, these gold investments can help in stabilizing one’s portfolio. This helps in protecting your overall portfolio during uncertain times.

3. Protection from Inflation and Market Volatility

It saves the investors from the inflation, as during inflation the price of commodities goes up and the value of money goes down. Gold has acted as an asset that has been guarded during inflation times. It is witnessed that when the currency depreciates during inflation, the price of gold rises helping the investor protect their wealth.

4. High Liquidity and Convenience

If you require cash instantly, selling the physical gold can be a challenge in terms of buyers, current price of the gold and even the making charges as you may not get the fair price. But buying these gold mutual funds can sell your units on any business day and get the money directly in your bank account within a few days. The process is transparent and hassle-free.

Factors to Consider Before Investing

Fund Performance History: Investors shall look for how funds have performed over the last 1, 3, and 5 years, as it helps in showing you how consistently it has tracked the price of gold. Though the previous performance doesn’t predict the future, it helps the investors in tracking the record of the fund.
Expense Ratio: Think of it as a service charge that is levied annually by the fund manager to manage your investments. A small difference in the expense ratio can affect the investor’s profit, so one should always look for the expense ratio and prefer a lower ratio.
Asset Under Management (AUM): This is a collective total amount that all the investors have put into the specified fund, here a large AUM shows the trust of investors. A good AUM also means that the fund has liquidity meaning you can easily buy or sell the units.
Tracking Error: This helps in telling the investors if the fund is working properly or not as this is used to track the performance of gold price in the actual market. Investors shall look for lower tracking error as this means that the return on your investment is very close to the actual gold returns.
Fund Manager’s Experience: While most gold funds are passively managed (they just follow the underlying ETF), it’s good to invest with a fund house that has a long history and trusted reputation in the industry. This adds a layer of reliability to your investment.

Conclusion

Investing in gold has changed for the better. You no longer need a large sum of money or a bank locker to own this precious metal. Gold mutual funds offer a simple, affordable, and smart way to add the stability of gold to your investment portfolio.

One should think of them as a long-term investment that protects your wealth, fights with rising inflation and brings diversification to your portfolio. You should be clear about the future goals that you want to meet and make the decision accordingly.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	A Guide To Investing In Gold In India
2	How to Invest in Gold ETF
3	What is Gold ETF? Meaning & How to Invest Guide
4	Top 10 Reasons to Invest in Gold
5	Best Silver Stocks in India
6	Digital Gold vs Gold ETF: Which is Better?
7	Mutual Fund vs ETF. Are They Same Or Different?
8	Sovereign Gold Bonds vs. Gold ETF: Which is a Better Investment?
9	Gold BeES vs Gold ETF: Meaning, How It Works, Taxation
10	Best ETFs in India to Invest

Frequently Asked Questions (FAQs)

What is the main difference between a Gold Fund and a Gold ETF?
To buy or invest in a gold ETF you need to have a Demat account but to invest in Gold Funds (which are funds of funds) you can directly do it from your bank account and there is no requirement for a Demat account.
Do Investors need a Demat account to start a Gold SIP?
No, to invest in Gold SIP you don’t require a demat account you can start a Gold SIP with just your bank account after completing your KYC.
How are Gold Mutual Funds taxed?
Gold mutual funds are taxed like non-equity or debt funds, if the units are sold within 3 years then the profit is added to your income and taxed according to your tax slab.
What is the minimum amount I can invest?
Most gold mutual funds allow you to start a SIP with as little as Rs.100 or Rs.500 per month, making gold investing accessible for everyone.
Shall I invest a lump sum amount or start a SIP in a Gold Fund?
SIP (Systematic Investment plan) helps in investing a fixed amount regularly whereas a lump sum is a one-time investment that you can consider if you have a large amount of money ready, so look according to the funds availability and your future goals.

October 24, 2025

Best Free Stock Portfolio Tracker in India

There are multiple financial investments that you make as an investor, like stocks, mutual funds and some Fixed deposits in the bank. To keep a track of all these investments you have to use multiple platforms and different apps to look how your investments are doing which can sometimes be complicated or confusing for you to track your investments.

This is where the role of portfolio tracker comes in, it is a simple tool that puts all your investments in one place and tracks the price movements. With the right free investment tracking app in India, you can see your entire portfolio on a single screen, track price movements, monitor returns, and review allocation. It’s like having a report card for your money, so you always know where you stand.

What is a Portfolio Tracker?

It’s a simple app or website that consolidates all your investments in one place and gives you a clear picture of their performance—showing your portfolio’s total value and whether you are making a profit or a loss. The tracker works in two ways, first is the Manual Entry where every time you purchase or sell something you need to open the app and mention your buy and sell manually. Second is where this happens automatically where if you buy or sell something it automatically gets registered to your tracker. For this you need to link your broker account with the tracker app for shares and commodities but for mutual funds there is a special report called a Consolidated Account Statement (CAS). It’s like a single passbook for all your mutual funds, no matter where you bought them. You can let the tracker app read this report, and it will add all your funds to your screen automatically. This is a very useful feature, especially now that many people buy mutual funds from different apps to save money.

Best Free Stock Portfolio Tracker in India

1. Pocketful

Pocketful is a new age platform designed for both active traders and long-term investors. It lets you track a wide range of investments, including stocks, ETFs, bonds, and even Futures & Options (F&O). For tax purposes, there are different reports that you can go through, as it gives you separate Profit & Loss reports for stocks, F&O, and commodities, making tax filing much simpler.

What’s really exciting about Pocketful is its focus on technology. It is soon launching a “Portfolio Analyzer” that will use AI to give you a detailed health report of your portfolio based on multiple different factors. For traders, it offers powerful tools like unlimited trading plans, extra payout, MTF at lowest rates, advanced order types, and free algo trading APIs.

2. INDmoney

INDmoney is a wholesome app that lets users track almost everything at one place. In this app you can look at your Indian stocks, US stocks, mutual funds, EPF, NPS, and even your credit card bills. This app gives you a single number for all your total investments (total net worth).

One of its most popular features is making it easy to invest in US stocks like Apple or Google, even with as little as $1.The app is also very helpful during tax season, as it can give you a consolidated tax report for your investments. It is one of the features that helps users in managing their financial life and making more informed decisions.

3. ET Money

ET Money is a fantastic choice if you are serious about your mutual fund investments. It has a special feature called the “Portfolio Health Check” where you can upload your mutual fund portfolio, and the app gives you a detailed report card for your investments. It also tells you how much money you have pooled in one industry and if your funds are at any risk, or if they are not performing well compared to others.

While it is great for mutual funds, it also helps you track other things like NPS and Fixed Deposits. ET Money has a paid service known as “Genius” that lets you use advanced tech to give you personalized investment advice based on one’s risk and preference.

4. Value Research

Value Research is one of the oldest names in the investment world and even trusted by so many users. Value Research’s portfolio tracker is suitable for investors who like to get the deep details and analysis of the desired stocks. The app has simple navigating functions and provides detailed high quality analysis of your stocks and mutual funds.

The platform also provides investment advice which helps you to decide whether to buy, hold, or sell a particular stock or fund. The platform also gives you detailed tax statements that can directly be filed. If you like data and are comfortable with technical analysis then this is a perfect research app for you.

5. MProfit

MProfit is a platform specially for investors that have different demat accounts with multiple brokers. The platform has the ability to automatically import your investment data from multiple brokers making it easy for you to analyse everything at one place, this automation helps in saving time and effort to enter everything manually, the app automatically fetches data for your broker and provides the analytics.

MProfit can keep a track of multiple types of investments like stocks, mutual funds, F&O, and even PMS and AIFs. MProfit is also a favorite among Chartered Accountants because it generates capital gains reports in the exact format required for filing income tax returns. The platform’s customer support is even excellent and its collective management of multiple accounts is praised by the users.

6. Tickertape

Tickertape acts as a smart toolkit for the new age users as it can connect with most of the stockbroking platforms like Zerodha, Angel One, and Upstox, making it simpler for you to see all your stock holdings in one dashboard. Its unique analysis tools makes this platform special for the users as it has a “Diversification Score” that tells you if your portfolio is well-balanced or too concentrated in one area.

It also has a “Redflags” feature that warns you about potential risks attached to your stocks in your portfolio, such as companies with high promoter debt. Beyond tracking, it has a powerful stock screener with over multiple filters that helps users to find out new hot investment options.

7. Groww

Groww came into the Indian market as a simple investing platform for mutual funds and has gradually become one of the most popular investment apps in India, which offer stock investment as well. The platform has an in-built tracker that analyzes everything in the app itself so that you can get everything in one place. Groww has a clean, simple, and user-friendly design, which makes investing hassle free and not confusing, especially for beginners.

In this app you can import all your external mutual funds investments and then analyse them and similarly by using CAS option all your fund data gets to your Groww dashboard, giving you a complete picture in one place. It also provides the necessary Profit & Loss reports you need for tax filing.

8. Kuvera

Kuvera is a platform that not only focuses on your individual investments but investments of your families as well, as it gives you a feature called the “Family Account” that helps in managing investments of your spouse, children and parents all from one single place. This feature helps in overlooking the entire family’s financial health.

The app has some interesting features like goal based investing where you can set up your future goal like “child’s marriage” or “buying a house” and link your investments to them, which helps you stay on track. Kuvera also offers smart tools like “Tax Harvesting,” which helps you save on long-term capital gains tax, and “TradeSmart,” which helps you switch from regular to direct mutual funds efficiently.

9. Zerodha Coin

Coin is the mutual fund investment platform from Zerodha, India’s largest stockbroker. It is famous for making mutual fund investing incredibly simple and completely free of commissions. Since it offers only direct mutual funds, you can earn up to 1.5% extra returns every year compared to regular funds.

The app has a very clean user interface and there are no ads, no distracting notifications, just a straightforward platform to buy, sell, and track your mutual funds. You do need a Zerodha demat account to use it, but it allows you to hold both your stocks and mutual funds in one place. It also provides all the tax reports you need from its main ‘Console’ dashboard.

10. Scripbox

Scripbox is designed for people who find investing confusing and want a helping hand. Its main goal is to help investors or beginners with how to invest and where to invest their money. Scripbox gives its users a tailored list of recommended funds based on smart data based funds that have potential to grow.

This approach is often described by users as “low effort and high reward” because it makes it very easy to start investing in a disciplined way. The platform is also great for goal-based investing, with specific plans for long-term wealth building, tax saving, and even creating an emergency fund.

Read Also: Best Trading Apps in India

Key Indicators of Best Free Stock Portfolio Tracker in India

Company	Assets Covered	Auto-Sync	Key Analytics	Tax Reporting	Platforms	Best For
Pocketful	Stocks, ETFs, F&O, Bonds, SGBs	Brokerage Account		Yes (Tax P&L Desk)	iOS, Android, Web	Traders and tech-savvy investors
INDmoney	Stocks,MFs,US Stocks,EPF,etc	Broker Sync,Email Read	Net Worth, Global Tracking	Yes (P&L statement)	iOS, Android,Web	All-in-one financial view
ET Money	MFs, Stocks, NPS, FDs	MF Central (CAS)	Portfolio Health Score	Premium Feature	iOS, Android	Mutual fund investors
Value Research	Stocks, MFs, NPS, PPF, Bonds, etc.	MF Central (CAS)	VR’s Analysis, Quality Score	Yes (Detailed Tax Report)	iOS, Android,Web	In-depth portfolio analysis
MProfit	Stocks, MFs, F&O, Bonds, PMS, etc.	Broker Import (700+), CAS	XIRR, Asset Allocation	Yes (ITR Format)	iOS, Android, Web, Desktop	Multi-broker, serious investors
Tickertape	Stocks, MFs, ETFs, Gold	Broker Sync (Multiple)	Diversification Score, Redflags	Basic	iOS, Android,Web	Investors using multiple brokers
Groww	Stocks, MFs, Gold	MF Central (CAS)	Basic P&L, XIRR	Yes (P&L Statement)	iOS, Android, Web	Groww ecosyst
Kuvera	Stocks, MFs, US Stocks, FDs	Broker Sync, CAS	Goal Planning, XIRR	Yes (Capital Gains Report)	iOS, Android, Web	Goal-based & family investing
Zerodha Coin	MFs, NPS	N/A (Direct Platform)	XIRR, Portfolio Analytics	Yes (Comprehensive)	iOS, Android, Web	Zerodha users & DIY MF investors
Scripbox	Mutual Funds	N/A (Direct Platform)	Curated Recommendations	Yes	iOS, Android, Web	Beginners wanting guidance

Key Factors You Need To Look for in a Free Stock Portfolio Tracker

Tracks Everything: A good portfolio tracker app should track stocks, mutual funds, ETFs, Fixed Deposits (FDs), bonds, gold and more. The more it can track, the better you can see your full financial investment analysis.
Connects Automatically: A good tracking app should connect with your broker accounts or use your CAS report easily. This saves you from the manual task of mentioning everything by yourself in the tracking apps.
Report Card: The app should tell you the data and numbers along with what they mean. Look for a feature called XIRR, where you can get to know your real profit per year from your investments. Also, look for charts that show you how your money is split between different investments.
Taxation: A good tracker can create a Capital Gains report for you. This report shows the profit you made from stocks and mutual funds, which you need for your tax filing.
Simple to Use: The app options shall be easy to navigate without reading a big instruction book. It’s great if it has both a mobile app (to check on the go) and a website (to see more details).
Money Safety: You are trusting the app with your financial details. Make sure it uses strong, bank-level security and if it is registered with SEBI or not.

Conclusion

As an investor you need to figure out what you need or which features are mostly liked for your hassle free trading. If you are a beginner and mostly invest in mutual funds, an app like ET Money or Groww is a good place to start. If you have accounts with many different stockbrokers, a powerful app like MProfit or Tickertape will be very helpful. And if you are a trader or an investor who is excited about new technology like AI, then Pocketful is a reliable and affordable platform.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
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Frequently Asked Questions (FAQs)

Are these portfolio trackers free for users?
Yes, the main features of all these apps are free. Some of them may have a paid version for special features, but you can track all your investments without paying anything.
Is it safe to connect my bank or broker account?
Good apps use very strong security, just like banks, to keep your information safe. They usually only have “read-only” access. This means they can see your investments, but they cannot buy or sell anything or move your money.
What is a CAS, and why do apps ask for it?
CAS means Consolidated Account Statement which is a single monthly report of all your mutual fund investments. Apps use this report to automatically add all your mutual funds to your dashboard.
Can these apps help with taxes?
Yes, many of these apps like MProfit, Value Research, INDmoney, and Pocketful can give you a Capital Gains report. This report has all the profit and loss details you need to fill out your tax forms, making a difficult job much easier.
Do I have to stop using my broker’s app (like Zerodha or Angel One)?
A portfolio tracker is a separate tool that just sits on top and gives you a combined view of all your investments in one place.

October 24, 2025

Difference Between FERA and FEMA

India’s economy has come a long way. Not too long ago, every penny we earned or spent abroad was tightly monitored. Foreign exchange was scarce, and the government wanted to make sure not a single rupee went to waste. That is where FERA (Foreign Exchange Regulation Act, 1973) came into existence, a law that controlled all dealings with foreign currency.

Fast forward to the 1990s – India opened up to the world, invited foreign investments, and embraced globalisation. Suddenly, FERA felt outdated and restrictive. So, in 1999, it was replaced with FEMA (Foreign Exchange Management Act), an updated version, a law that was much more flexible and friendly to businesses.

In this blog, let us break down what FERA and FEMA are, how they differ, and why this change was so important.

What is FERA

The Foreign Exchange Regulation Act (FERA) was passed in 1973, during a time when India was struggling with low foreign exchange reserves. The main idea was to control every bit of foreign currency coming in and going out of the country.

Here is what made FERA excel,

It was very strict; almost every transaction involving foreign exchange needed approval from the RBI.
Breaking the rules was considered a criminal offence, which meant you could even end up in jail.
It applied not only to Indians but also to foreign companies doing business here.

In short, FERA worked for a while when India was cautious and inward-looking. But once globalisation began, it started feeling like a barrier rather than a safety net.

What is FEMA

By the late 1990s, things had changed. India had stronger forex reserves, was trading actively with other countries, and needed foreign investment to grow. That is when FEMA (Foreign Exchange Management Act, 1999) came into the picture.

FEMA’s approach was completely different:

Instead of control, the focus shifted to management.
Violations were treated as civil offences, meaning fines, and not imprisonment
Rules became more business and investor-friendly.
The RBI still kept an eye on forex dealings, but the overall framework was much more relaxed and simple.

Table of Difference of FERA and FEMA

Basis	FERA (1973)	FEMA (1999)
When it was introduced	Came into force in 1973, at a time when India had very little foreign exchange and followed a closed economy.	Introduced in 1999, after India opened its economy in the 1990s and started inviting global trade and investment.
Purpose	To save every bit of foreign exchange and control how it was used.	To make foreign exchange dealings smoother and encourage trade, payments, and investment.
Features	Very strict and control-heavy. Almost everything needed RBI’s prior approval.	Flexible and management-oriented. RBI still regulates, but the rules are much easier.
Punishment	Breaking the law could land you in jail.	Violations usually lead to fines instead of jail.
Role of RBI	RBI was involved in nearly every transaction, which made the process slow and rigid.	RBI still plays a key role but gives businesses and individuals much more freedom.
Foreign investment	Highly restrictive. Global companies found it difficult to enter India because of too many rules.	Investor-friendly. FEMA made it easier for foreign businesses and funds to invest in India.
Imports and exports	Tight restrictions on trade to prevent forex outflow.	Much more supportive of international trade and globalization.
Type	Defensive and restrictive	Liberal and growth-oriented

Why was FERA Replaced with FEMA

India did not just wake up one day and scrap FERA. There were strong reasons for the change,

1991 Reforms – After liberalisation, India could not grow with outdated, restrictive laws like FERA that limited trade deals.
Foreign Investment Needs – Investors found FERA intimidating. FEMA created a friendlier environment.
Global Alignment – India wanted to align with global trade practices and WTO rules.
Evolving Forex – By the late 90s, India had better reserves, and the economy’s focus shifted from conserving to managin

In short, FERA belonged to a time when trades were scarce and limited in India, while FEMA belongs to a time of opportunity.

Importance of FERA and FEMA

FEMA is more than just a replacement law; it is the backbone of how India handles foreign exchange today. Let us examine the importance of the act.

Encourages Investment – FEMA makes it easier for foreign companies and investors to bring money into India.
Smoothens Global Trade – Importers and exporters benefit from clear and simpler rules.
Supports Ease of Doing Business – Startups and businesses dealing internationally do not have to jump through endless hoops.
Keeps a Check on Misuse – FEMA also ensures foreign exchange isn’t used for shady activities like money laundering.
RBI’s Flexible Role – The RBI can update rules as per economic needs, making the law adaptable.

In today’s interconnected world, FEMA keeps India both open and secure.

Conclusion

The shift from FERA to FEMA marks a big turning point in India’s economic story. FERA was created when the government kept a strong grip on foreign exchange. It made sense back then, but as India opened up to the world, those restrictions started holding us back.

FEMA, on the other hand, reflects a more confident and global India. Instead of controlling every transaction, it focuses on managing them efficiently and welcomes foreign trade & investment, from all around the world, while still keeping enough checks to ensure fairness and security.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	Difference Between Trading and Profit & Loss Account
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3	Difference Between Forward and Future Contracts Explained
4	Difference Between Mutual Funds and Direct Investing
5	Difference Between Credit and Debt
6	Difference Between IPO and FPO
7	Pledging Shares vs Pay Later (MTF): Key Differences
8	Differences Between MTF and Loan Against Shares
9	Difference Between Demat Account and Trading Account
10	Gold ETF vs Gold Mutual Fund: Differences and Similarities

Frequently Asked Questions (FAQs)

Why was FEMA introduced?
FEMA was introduced to replace the outdated FERA and create a law that supported globalisation.
Is FEMA still active?
Yes, FEMA is the current law that governs foreign exchange in India.
Who regulates FEMA?
RBI (The Reserve Bank of India) regulates FEMA under the supervision of the Central Government.
How does FEMA help businesses?
It makes trade, investment, and global deals easier and smoother, while still keeping the checks needed in place.
What was the main drawback of the FERA?
FERA was very strict and considered even minor violations as criminal offences, which scared the foreign investors.

October 24, 2025

Difference Between Bonds and Debentures

The stock market is usually the first thing that comes to mind when you think about investing. But let’s just be honest: not everyone prefers that much risk. Some people want safety and prefer steady returns. Bonds and debentures come into the picture at this point.

At first, they might seem the same because both of them involve borrowing money and paying interest. But if you look more closely, you will be able to see some major differences. You can choose the investment option that works best for you if you know how they work and what makes them different.

In this blog, we will discuss the basic difference between bonds and debentures to make your financial journey even easier.

What are Bonds?

A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower, typically a government, municipality, or corporation. The bond issuer agrees to pay back the principal amount on a specific maturity date, along with periodic interest payments (called coupon payments).

In simple terms, when a government or company needs funds, instead of taking a loan from a bank, they borrow money directly from the public through bonds. When you purchase a bond, you are essentially lending your money to the issuer. In return, they make two commitments:

They will pay you interest regularly, which is like a fee for using your money.
When the bond’s time period ends or it matures, they will give you back the initially invested money.

Features

1. Safe and steady – People think bonds are safer than stocks because the government backs them.

2. Fixed income – You already know how much interest you are going to receive and when you will get it.

3. Time-bound – Bonds have a specific date when they will mature, so your money will not remain stuck there forever.

4. Good for Conservative Investors – Bonds are a good choice for conservative investors who are unwilling to take high risk.

Read Also: Benefits of Investing in Bonds

What are Debentures?

A debenture is a type of debt instrument issued by a company to raise capital from the public. It acknowledges a loan taken from investors, with a promise to pay fixed interest at regular intervals and return the principal amount on maturity.

Think about a business that needs money to grow. It can ask people like you and me to lend money instead of getting a loan from the bank. That is where debentures come in. When you buy a debenture, you are giving the company your money. The company will pay you regular interest in return and then give your money back after a specified amount of time.

Most debentures are not backed by real assets, which is different from bonds. You trust the company’s reputation and ability to pay. However, there are secured debentures, but they are rare.

Features

1. Unsecured – Debentures usually do not include assets as security. You are taking on more risk if the company shuts down.

2. Issued by Companies – Companies issue debentures, but governments issue bonds.

3. Fixed interest – You will get interest, which will usually be higher than the interest on bonds.

4. Convertible or Non-Convertible – Some debentures can be turned into equity shares of the company later, while others just pay you back.

Table of Difference

Basis	Bonds	Debentures
Definition	Think of bonds as you lending money to the government or a company, and they promise to pay you back with interest payments.	Debentures are also you lending money, but here you are trusting the company’s reputation and ability to pay.
Who issues them	Governments and companies both issue bonds.	Usually, companies issue debentures.
Security	Often backed by assets or the government.	Usually not backed by assets, just the company’s reputation.
Risk	Safer, less risky.	Riskier than bonds.
Returns	Steady, predictable income.	Higher interest than bonds (to make up for the extra risk).
Tenure	Ranges between 2 years to 40 years; usually around 20 years	Ranges from 90 days to 20 years; with most issues under 10 years
Conversion to Equity	Most bonds are non-convertible.	Debenture can be convertible or non convertible.
Best for	People who want safety and peace of mind with a fixed income.	Investors are willing to take a bit more risk for the chance of better returns.

Which one should you choose?

The choice ultimately depends on the type of investor you are. Bonds are most suitable for individuals seeking a steady income with minimal volatility. They offer a high degree of security, as they are generally backed by the government or secured by tangible assets, allowing investors greater peace of mind.

Debentures might be a better fit for you if you are willing to take a little more risk for the opportunity of better returns. You are trusting the company to pay you back, which is riskier but usually pays off more.

You do not always have to pick one over the other. A lot of investors keep both bonds and debentures. They use bonds for stability and debentures for higher returns.

Read Also: Types of Bonds in India

Conclusion

In the end, bonds and debentures are not competitors; they are just different types of investments. Bonds are the safe and reliable type. They give you steady returns, minimal stress, and peace of mind. Debentures, on the other hand, are more fascinating because they come with more risk but also have the potential for bigger rewards.

So, which one should you choose? It entirely depends on what kind of investor you are. Bonds will be good if you want stability. Debentures can offer attractive return opportunities for investors who are prepared to accept a higher degree of risk. It is advised to consult a financial advisor before investing in bonds or debentures.

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5	What is Insurance Bond?
6	Government Bonds
7	What is Sovereign Gold Bonds?
8	What are Social Bonds?
9	What are Contingent Convertible(CoCo Bonds)?
10	What Are Corporate Bonds?
11	What are Bond Yields?
12	What is Indemnity Bond?
13	Sovereign Gold Bonds vs. Gold ETF: Which is a Better Investment?
14	Best Safe Investments with High Returns in India
15	What is Nominal Yield?
16	What Is Foreign Currency Convertible Bonds (FCCB)?
17	Straight Bond: Key Features, Benefits & Risks
18	Tax-Free Bonds: Their Features, Benefits, and How to Invest
19	What Is a Callable Bond?
20	What are War Bonds?

Frequently Asked Questions (FAQs)

Who issues bonds?
Both the government and companies issue bonds.
Who issues debentures?
Mainly, companies issue debentures to raise money.
Are bonds safer than debentures?
Yes, bonds are generally considered safer than debentures, as they are often backed by the government or secured against specific assets, which provides investors with greater protection.
Do bonds pay fixed interest?
Yes, many bonds pay fixed interest.
Can I lose money in debentures?
Yes, if the company that issued them defaults, since debentures are usually unsecured.

October 23, 2025

Blog

Algo Trading Myths Debunked | Truth About Automated Trading

What Exactly Is Algo Trading?

How It Works

Myth 1: Algo Trading is only for large institutions

Step-by-Step Procedure to Start Algo Trading

Myth 2: Algo Trading requires coding or Programming skills

Myth 3: Algo Trading Always Leads to Profits

Myth 4: Algo Trading Requires a Lot of Money

Myth 5: Once set up, Algo Trading “runs automatically”

Myth 6: Algo Trading is Completely Illegal in India

Myth 7: Algo Trading and High-Frequency Trading (HFT) are the same thing

Comparison

Myth 8: Algorithms are smarter than humans

Myth 9: If a strategy is successful in backtesting, it will yield similar profits in the live market.

Myth 10: Complex Algorithms Are Always More Profitable

Myth 11: Algo Trading doesn’t require risk management

Myth 12: Algo Trading is Only in Equities

Myth 13: Algo Trading Requires Expensive Data Feeds

Myth 14: Algo Trading Means Zero Emotional Involvement

Myth 15: Algo Trading will completely replace humans

Conclusion

Frequently Asked Questions (FAQs)

Is Algo Trading profitable?

Do I need coding for Algo Trading?

Is Algo Trading legal in India?

Does Algo Trading work automatically?

Can small traders use Algo Trading?

Dividend Distribution Tax – Meaning, Rate & Calculation

What Is Dividend Distribution Tax (DDT)?

How was DDT implemented?

Key Features of DDT

How Corporate Dividend Tax Was Calculated

Dividend Distribution Tax Rate in India – Historical Timeline

Evolution of Rates

The Abolition of Dividend Distribution Tax in 2020

How does the new system work?

Pros and Cons of the Dividend Distribution Tax Regime

Old vs. New Dividend Tax Regime

Conclusion

Frequently Asked Questions (FAQs)

Who was responsible for paying DDT?

Why was Dividend Distribution Tax removed?

How are dividends taxed now?

What was the main disadvantage of DDT?

What is a Confidential IPO Filing?

Meaning of Confidential IPO Filing

How Does the Confidential IPO Process Work?

Difference Between Confidential and Traditional IPO Filing

Benefits of Confidential IPO Filing

Risk of Confidential IPO Filing

Is a Confidential IPO Filing Allowed in India?

Conclusion

Frequently Asked Questions (FAQs)

Is a confidential IPO allowed in India?

Who can opt for confidential IPOs?

When does an investor get to know about the confidential IPO filed by a company?

Can a company withdraw their IPO after its filing with SEBI?

Can an investor have access to the Pre-filing DHRP of a company filing a Confidential IPO?

How to Start Algorithmic Trading?

What Is Algorithmic Trading?

Key Features

Step-by-Step Guide to Starting Algorithmic Trading

Step 1: Learn the Basics

Step 2: Pick a Programming Language

Step 3: Select a Trading Platform

Step 4: Build Your Trading Strategy

Step 5: Backtest Before You Trade

Step 6: Try Paper Trading

Step 7: Open a Trading Account with API Access

Step 8: Go Live and Monitor

Pros and Cons of Algorithmic Trading

Pros of Algorithmic Trading

Cons of Algorithmic Trading

Conclusion

Frequently Asked Questions (FAQs)

Is algorithmic trading legal in India?

How can I start algo trading as a beginner?

Do I need coding skills for algo trading?

What are the benefits of algorithmic trading?