Shreeji Shipping Global Limited, a leading player in dry-bulk logistics across non-major ports in India and Sri Lanka, has launched its ₹411 crore IPO, consisting entirely of a fresh issue of 1.63 crore equity shares. The issue opens for subscription on August 19, 2025, at a price band of ₹240 to ₹252 per share, and closes on August 21, 2025. Post allotment, the company’s shares are scheduled to be listed on both the BSE and NSE on August 26, 2025.
Shreeji Shipping IPO Day 1 Subscription Status
The Shreeji Shipping IPO received a strong response on its first day, with an overall subscription of 2.13 times. QIBs subscribed 1.09 times, NIIs 3.54 times, and retail investors 2.13 times.
Investor Category
Subscription (x)
Qualified Institutional Buyers (QIB)
1.09
Non-Institutional Investors (NII)
3.54
bNII (above ₹10 lakh)
3.77
sNII (less than ₹10 lakh)
3.06
Retail Individual Investors (RII)
2.13
Total Subscriptions
2.13
Total Applications: 1,82,278
Total Bid Amount (₹ Crores): 613
Objective of the Shreeji Shipping Global IPO
Shreeji Shipping Global Limited intends to utilize the net proceeds from the fresh issue primarily for expansion and strengthening of its fleet through the acquisition of dry bulk carriers in the Supramax category, for partial repayment or prepayment of certain outstanding borrowings, and for general corporate purposes.
Use of IPO Proceeds
Amount (₹ Cr)
Acquisition of Dry Bulk Carriers in Supramax category in the secondary market
251.18
Pre-payment/ re-payment, in part or full, of certain outstanding borrowings availed by the Company
23
General Corporate Purposes
–
Shreeji Shipping IPO GMP – Day 1 Update
The grey market premium (GMP) of Shreeji Shipping IPO is ₹30, as on 5:00 PM August 19, 2025. The upper limit of the price band is ₹252, and the estimated listing price as per today’s GMP can be ₹282, giving a potential gain of around 11.90% per share.
Date
GMP
Est. Listing Price
Gain
19-08-2025 (DAY 1)
₹30
₹282
11.90%
Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.
Important Dates for Shreeji Shipping IPO Allotment
Event
Date
Tentative Allotment
August 22, 2025
Refunds Initiation
August 25, 2025
Credit of Shares to Demat
August 25, 2025
Listing Date
August 26, 2025
Shreeji Shipping Overview
Shreeji Shipping Global Limited is an integrated shipping and logistics service provider specializing in dry bulk cargo handling across ports and jetties in India and Sri Lanka. With over three decades of industry experience, the company operates a fleet of 80+ vessels, 370+ earthmoving equipment, and offers end-to-end solutions including lighterage, stevedoring, cargo management, transportation, fleet chartering, and equipment rentals. Focused on non-major ports, particularly along India’s west coast, Shreeji serves diverse sectors such as oil and gas, energy, FMCG, coal, and metals. For FY 2025, it reported revenues of ₹6,076.13 million and PAT of ₹1,412.37 million.
Easy Steps to Apply for Shreeji Shipping IPO via Pocketful
Vikram Solar Limited, a major player in solar photovoltaic manufacturing in India, has launched its ₹2,079 crore IPO, comprising a fresh issue of ₹1,500 crore and an offer for sale of ₹579 crore. The issue opens for subscription on August 19, 2025, at a price band of ₹315 to ₹332 per share, and closes on August 21, 2025. Post allotment, the company’s shares are expected to be listed on both the BSE and NSE on August 26, 2025.
Vikram Solar IPO Day 1 Subscription Status
Vikram Solar IPO witnessed a steady start on the first day, with an overall subscription of 1.57 times. Non-Institutional Investors led the demand at 3.99 times, followed by Retail Investors at 1.43 times. Qualified Institutional Buyers subscribed 0.02 times.
Investor Category
Subscription (x)
Qualified Institutional Buyers (QIB)
0.02
Non-Institutional Investors (NII)
3.99
bNII (above ₹10 lakh)
3.90
sNII (less than ₹10 lakh)
4.19
Retail Individual Investors (RII)
1.43
Employees
1.06
Total Subscriptions
1.57
Total Applications: 5,73,492
Total Bid Amount (₹ crores): 2,296
Objective of the Vikram Solar IPO
Vikram Solar Limited intends to utilize the net proceeds from the fresh issue towards funding capital expenditure for its Phase I and Phase II projects, along with meeting general corporate purposes.
Use of IPO Proceeds
Amount (₹ Cr)
Partial funding of capital expenditure for the Phase-I Project
769.73
Funding of capital expenditure for the Phase-II Project
595.21
General Corporate Purposes
–
Vikram Solar IPO GMP – Day 1 Update
The grey market premium (GMP) of Vikram Solar IPO is ₹47, as on 5:00 PM August 19, 2025. The upper limit of the price band is ₹332, and the estimated listing price as per today’s GMP can be ₹379, giving a potential gain of around 14.16% per share.
Date
GMP
Est. Listing Price
Gain
19-08-2025 (DAY 1)
₹47
₹379
14.16%
Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.
Vikram Solar IPO – Key Details
Particulars
Details
IPO Opening Date
August 19, 2025
IPO Closing Date
August 21, 2025
Issue Price Band
₹315 to ₹332 per share
Total Issue Size
6,26,31,604 shares(aggregating up to ₹2,079.37 Cr)
Vikram Solar Limited is one of India’s largest solar photovoltaic (PV) module manufacturers, with over 17 years of industry experience. As of March 31, 2025, the company has an installed manufacturing capacity of 4.5 GW, strategically located in West Bengal and Tamil Nadu, and is expanding to 20.5 GW by FY 2027. Its product portfolio includes high-efficiency Mono-PERC, N-Type, and HJT solar modules, supported by strong R&D and global certifications. Vikram Solar also provides EPC and O&M services and exports to over 39 countries, serving marquee clients worldwide while maintaining a strong domestic presence.
Easy Steps to Apply for Vikram Solar IPO via Pocketful
Patel Retail Limited, a Maharashtra-based supermarket operator, has launched its ₹243 crore IPO, comprising a fresh issue and an offer for sale. The issue opens for subscription on August 19, 2025, at a price band of ₹237 to ₹255 per share, and closes on August 21, 2025. Following allotment, the company’s shares are set to be listed on both the BSE and NSE on August 26, 2025.
Patel Retail IPO Day 1 Subscription Status
Patel Retail IPO saw a strong response on the first day, with an overall subscription of 6.40 times. The issue was led by Qualified Institutional Buyers, who subscribed 9.86 times, followed by Non-Institutional Investors at 7.40 times and Retail Investors at 4.96 times. The employee quota was also fully subscribed at 3.26 times.
Investor Category
Subscription (x)
Qualified Institutional Buyers (QIB)
9.86
Non-Institutional Investors (NII)
7.40
bNII (above ₹10 lakh)
7.35
sNII (less than ₹10 lakh)
7.51
Retail Individual Investors (RII)
4.96
Employees
3.26
Total Subscriptions
6.40
Total Applications: 3,17,204
Total Bid Amount (in ₹ crore): 1,276
Objective of the Patel Retail IPO
Patel Retail Limited intends to utilize the net proceeds from the IPO towards repayment or prepayment of certain outstanding borrowings, meeting its working capital requirements, and for general corporate purposes.
Use of IPO Proceeds
Amount (₹ Cr)
Repayment/prepayment, in full or part, of certain borrowings availed of by the Company.
59
Funding of working capital requirements of the Company
115
General Corporate Purposes
–
Patel Retail IPO GMP – Day 1 Update
The grey market premium (GMP) of Patel Retail IPO is ₹46, as on 5:00 PM August 19, 2025. The upper limit of the price band is ₹255, and the estimated listing price as per today’s GMP can be ₹301, giving a potential gain of around 18.04% per share.
Date
GMP
Est. Listing Price
Gain
19-08-2025 (DAY 1)
₹46
₹301
18.04%
Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.
Patel Retail Limited is a value-focused supermarket chain operating under the brand “Patel’s R Mart,” primarily in tier-III cities and suburban areas of Maharashtra. Incorporated in 2008, the company manages 43 stores with a retail area of about 1.79 lakh sq. ft., offering over 10,000 SKUs across food, FMCG, general merchandise, and apparel. It has also developed private label brands such as Patel Fresh, Indian Chaska, Blue Nation, and Patel Essentials. Through backward integration, Patel Retail operates modern processing and agri-processing facilities in Maharashtra and Gujarat, supporting retail, exports to over 35 countries, and bulk agri-commodity trading.
Easy Steps to Apply for Patel Retail IPO via Pocketful
There are many occasions in the stock market when we want to invest in a good stock, but lack of funds comes in the way. At such times “Pay Later” feature or the Margin Trading Facility (MTF) emerges as a smart option. This facility gives you the power to buy shares of higher value with less capital.
In this blog, we will understand what margin trading facility or Pay Later feature is and what are the steps to avail it, so that you can use this facility easily and safely.
What is a Margin Trading Facility (MTF)?
Margin Trading Facility (MTF) or “Pay Later” is a facility that gives you the freedom to buy shares of higher value with less capital. In this, you invest a part of your capital and the rest of the amount is financed by your broker – that is, you trade now using borrowed funds and pay the rest later with applicable interest.
For example, if you have ₹20,000, you can buy shares worth up to ₹1,00,000 through MTF (with 5 times margin). Your broker gives you a loan of up to ₹80,000, on which interest is applicable.
In cash trading, you have to pay the full amount immediately, while in MTF trading, you can take delivery by paying a partial amount and pay the rest later. This facility is regulated by SEBI and applies only to stocks that are included in the MTF-approved list. This facility is offered by many popular brokers like Pocketful, Zerodha, Upstox, Angel One, etc.
Pocketful makes this facility even easier as you get MTF at the cheapest interest rate in the industry, starting at just 5.99% per annum, along with up to 5 times margin. This gives both new and professional traders a chance to make big investments without worrying about lack of funds. MTF is a great tool if you understand the risk and are adept at the nuances of trading. But using it without planning can also be detrimental, so take every step wisely.
Deposit initial margin amount : In MTF, you don’t have to invest the entire investment amount. You only pay a part, say 20% or 25% upfront, which is called the initial margin.
Broker provides the rest of the funds : The remaining amount is funded by the broker. Some platforms give you a margin of up to 5 times, allowing you to take large positions with limited capital.
Shares purchased are pledged : The stocks purchased using MTF funds are pledged to the broker. The shares remain pledged until you make the full payment.
Interest rate applies : You have to pay a fixed interest on the amount financed by the broker . This interest varies on different platforms. Some brokers like Pocketful offer this facility at very low rates as low as 5.99% per annum.
MTF is available only on Selected Stocks : Not every stock can be bought using the MTF feature. This facility is available only on those stocks which are approved by SEBI and the exchange.
Timely payment is important : If you do not pay interest or margin on time, your holdings can be forcibly sold; this is called a margin call or auto square-off.
How to Avail Pay Later Facility?
You can avail the Pay Later facility by following the steps mentioned below:
Step 1: Open a trading account with a broker that offers MTF or Pay Later Facility
First, you need to choose a broker platform that offers an MTF facility. Today, many brokers like Zerodha, Angel One, Upstox, ICICI Direct, Groww, and Pocketful offer this service.
Step 2: Activate MTF facility
After opening the account, you have to fill a consent form to activate MTF. This process can be easily completed from the mobile app or web portal of most brokers.
Step 3: Fund your margin account
To use MTF, you have to deposit an initial margin amount. This amount can vary from one broker to another and the stock selected (usually equal to 20%–25% of the trade value).
Step 4: Select from MTF-approved stocks
Not every stock is eligible for MTF. You must trade only in stocks that are approved for MTF by SEBI and the broker. This list is available on your broker platform.
Step 5: Place an order by choosing “Margin” or “Pay Later” option
When you go to buy a stock, select “Margin” or “Pay Later” in the order type. This will activate funding by the broker for your trade and your amount will be automatically adjusted in the margin.
Step 6: Keep regular track of positions and interest
In MTF, you have to pay interest every day, so keep checking your portfolio, outstanding amount and margin status from time to time. If you do not make the payment on time, the broker can force the sale of stocks.
Key Benefits of Using MTF
Some of the benefits of using MTF are given below:
More buying power with less capital : The biggest advantage of MTF is your buying power increases. You can buy shares using up to 5x leverage, allowing you to cash in on big opportunities without delay.
Beneficial for short-term traders : If you do swing trading or short-term positional trading, then MTF is a useful tool for you. When there is a possibility of a sharp movement in a stock in the market and you have less funds, then this facility can be very useful.
Flexible repayment facility : You do not have to pay MTF charges every day. Many brokers give a time period of 30 to 90 days, so that you can comfortably hold the stocks and exit at the right time.
Facility to do new trade without selling other holdings : Suppose your funds are invested in some other stock but you want to do a new trade. In such a situation, MTF helps you, because you can do a new deal without selling your old holding.
Some of the risks and charges associated with using MTF or Pay Later facility are given below:
Interest has to be paid daily : In MTF, the broker lends you funds and the interest is charged daily. This rate may vary for different brokers.
Margin maintenance is a must : You are required to maintain a minimum margin in your account to keep your trade position active. If your margin falls below this level, you must replenish it immediately, or your broker may liquidate your position partially or fully to cover the shortfall, potentially locking in losses.
Risk of forced liquidation on margin shortfall : If you do not replenish the required margin, the broker can sell your holdings without your permission. This is called forced liquidation and can cause you huge losses.
Additional charges and penalties may also be levied : In MTF, apart from interest, there are other charges – such as pledge/unpledge fees, penalty if payment is not made on time, and sometimes account maintenance charges as well.
Every broker has a different charge structure : Interest and other charges vary by broker; some may have higher or hidden fees. Therefore, before availing MTF facility of any broker, read MTF policies.
Key factors to consider before using MTF or Pay Later feature is given below:
Understand the interest rate and potential returns : In MTF, you have to pay interest on the borrowed funds. If the profit from your trade is less than this interest, then there may be a loss. Therefore, before investing, estimate whether your expected return is able to exceed this interest or not.
Check approved stocks and leverage ratio : Every broker has a list of stocks on which MTF facility is available. Along with this, the amount of leverage you will get like 3x, 5x can also vary. So, check these terms before trading.
Assess your risk-taking ability : MTF is a high-risk facility, which is greatly affected by market fluctuations. If you are new or do not understand market movements properly, then it can be harmful for you. First ask yourself – are you ready to take such risks?
Actively monitor trades :Margin calls are a possibility in MTFs. If the market moves against you and you don’t pay attention, your holdings can be sold automatically. So it is very important to keep a constant eye on the trades.
Conclusion
Margin Trading Facility (MTF) is a powerful tool that allows investors to take larger positions with relatively less capital. However, it proves beneficial only when one has a clear understanding of its terms, risks, and associated costs. With competitive interest rates and improved platforms such as Pocketful, MTF has become more accessible and affordable. For investors who practice strong risk management and actively monitor their trades, MTF can serve as an effective means to enhance portfolio growth. It is advised to consult a financial advisor before investing or trading using MTF or Pay Later facility.
S.NO.
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Success in trading is not just luck; it comes with the right knowledge, which can be obtained from a good technical analysis book. In today’s era where the market makes new moves every day, it has become necessary for every trader to build a strong technical base. No matter how much YouTube and short courses teach, in-depth understanding is only gained from reading the best books for technical analysis.
In this article, we will talk about those technical analysis books which are considered to be the most effective in 2025 whether you are a beginner or a professional, these books can completely change your trading game.
10 Best Technical Analysis Books for Stock Market in 2025
Book Name
Author
Who Should Read It?
Key Highlights
Technical Analysis of the Financial Markets
John J. Murphy
Traders looking to build a strong technical foundation
Most comprehensive guide on indicators, trends, and chart patterns
Japanese Candlestick Charting Techniques
Steve Nison
Traders who want to master candlestick patterns
Original source of candlestick strategies with practical examples
Trading in the Zone
Mark Douglas
Traders who frequently make emotional or impulsive decisions
Deep dive into trading psychology and discipline
Technical Analysis Using Multiple Timeframes
Brian Shannon
Intraday and swing traders
Teaches how to analyze price action across multiple timeframes
The New Trading for a Living
Dr. Alexander Elder
Traders looking for a full system (entry, mindset, risk)
Combines Triple Screen system, risk management, and planning
Encyclopedia of Chart Patterns
Thomas Bulkowski
Pattern-focused traders and researchers
Over 65 chart patterns analyzed with real market data
Charting and Technical Analysis
Fred McAllen
New traders starting their technical journey
Basic concepts explained in simple, easy-to-understand language
Come Into My Trading Room
Dr. Alexander Elder
Traders aiming to approach trading professionally
Step-by-step guide on analysis, execution, and self-review
How to Make Money in Stocks (CAN SLIM)
William O’Neil
Traders who want to combine fundamentals and technicals
CAN SLIM strategy blending chart patterns with earnings, volume
The Art and Science of Technical Analysis
Adam Grimes
Traders interested in professional or quantitative analysis
Strong focus on data, stats, and realistic trading psychology
Brief Overview of the 10 Best Technical Analysis Books
A summary of the 10 best Technical Analysis Books has been given below:
1. Technical Analysis of the Financial Markets
This book is considered the most reliable guide in the world of technical analysis, often called the “Bible” of trading. John J. Murphy, a former CNBC technical analyst, has explained chart patterns, trend lines, indicators and market behavior in detail. The book is about 500 pages long and provides theory as well as a practical approach. Whether you do day trading or swing trading, it is useful for every trader. Information on computer-based charting tools and the latest technologies has also been added to it as of 2025. If you are looking for a technical analysis book that teaches everything from beginner to advanced, then this book is an excellent choice.
2. Japanese Candlestick Charting Techniques
If you want an in-depth understanding of candlestick patterns, then this book is best suited for you. Steve Nison is credited with popularizing candlestick charts in the western world. In this book, many popular patterns like Doji, Hammer, Engulfing are explained with explanation. Charts and real trading examples make it extremely practical. This book not only teaches individual patterns, but also explains how they can be combined with other indicators to create strong signals. Even in 2025, candlestick analysis is considered the most reliable for intraday and swing trading, and this book gives a strong foundation for the same.
3. Trading in the Zone
This book focuses on trading psychology rather than technical analysis, but is just as important. Mark Douglas explains that the biggest part of successful trading is your mental state, not strategy. Traders often make mistakes like fear of loss, overtrading or haste—this book teaches them to control them. Written in simple language, this book can completely change your way of thinking. In 2025, when markets are volatile, this book has become an essential guide to maintaining trading discipline.
4. Technical Analysis Using Multiple Timeframes
This book by Brian Shannon is especially for those traders who want to understand price action on different timeframes. It explains how to read the same stock or index in different ways on 15 minute, 1 hour and daily charts. This technique gives the trader better entry and exit points. The focus of the book is on price structure, trend analysis and volume. In 2025, when traders do multi-timeframe analysis on mobile or web charts, this book is a very practical and up-to-date guide.
5. The New Trading for a Living
This book by Dr. Elder teaches a complete trading system including analysis, entry, exit, money management, and psychology. It also includes his famous Triple Screen Trading System, which is still as relevant today. This book is especially for those who want to take trading seriously and work on the whole process, not just signals. It includes information on charts, indicators (such as MACD, EMA), and journaling. If you want to learn from a professional approach, then this can be considered the best book for trading discipline in 2025.
6. Encyclopedia of Chart Patterns
If you want to go deep into chart patterns, then this book is like a reference book for you. Thomas Bulkowski has statistically analyzed more than 65 chart patterns in it such as Head & Shoulders, Flags, Wedges, etc. Each pattern is accompanied by its success rate, failure chance, and performance data. This book is for those traders who want to make their analysis data-based. In 2025, where backtesting and quant-based analysis are growing rapidly, this book gives you a strong technical edge.
7. Charting and Technical Analysis
This book is for those who are just starting technical analysis and want to understand in simple language. Fred McAllen has explained chart patterns, support-resistance and basic indicators in a very easy way. The book is characterized by its simplicity, no heavy theory, just the essentials and their practical explanation. If you are learning technical analysis for the first time, and do not want the book to be cumbersome, then this is a great beginner’s guide. Even in 2025, this book is considered to be the easiest technical analysis book for beginners.
8. Come Into My Trading Room
This second book by Dr. Elder goes a step further than his first book. It not only provides technical analysis, but also a complete plan of how to take trading as a profession. The book gives guidelines like maintaining a diary, reviewing each trade, and identifying your mental tendencies. This book teaches to create a structured routine so that you can make trading a serious and regular process. In 2025, when shortcuts are causing more losses, this book gives ideas about long-term trading success.
9. How to Make Money in Stocks (CAN SLIM)
This book by William O’Neil is a combination of technical and fundamental, which is based on a strategy called CAN SLIM. It explains how to select stocks by combining earnings, market trends, and chart breakouts. This book is especially for those who want to do swing or positional trading and do not want to depend only on indicators. Many successful traders in India also follow this model. In 2025, when data-driven analysis is in trend, this book is considered to be an excellent trading analysis book.
10. The Art and Science of Technical Analysis
This book is for those traders who want to understand technical analysis from a professional and data-based perspective. Adam Grimes has explained emotional bias, probability, and chart patterns in a scientific way. This book is not for beginners but for those who want to go deeper into the market and learn logical decision-making. This book teaches you that technical analysis is not just drawing lines but a way of thinking. In the advanced trading environment of 2025, this book is extremely useful for long-term success.
Why Read Technical Analysis Books in 2025?
In today’s fast-paced trading world, information is everywhere, but deep and structured learning is rare. Technical analysis books provide a comprehensive, step-by-step approach that short videos and free PDFs often cannot offer.
YouTube and free PDFs cannot teach everything : Nowadays short videos and free content are available everywhere, but their biggest drawback is – lack of in-depth and systematic learning. Trading is not a game, it is a professional skill, which cannot be learned only with superficial knowledge.
Structured Learning : A good technical analysis book explains every concept to you in detail and in a correct order. This not only strengthens your foundation, but also develops logical thinking and discipline.
Reliable Information : When indicators deceive or the mind gets confused, then these books work as a reference guide for you like a trusted companion.
Complete knowledge in one place : Chart patterns, indicators, psychology, money management, strategies in-depth information on all these topics is available in one place, which is priceless for any serious trader.
These books are still relevant in 2025 : Even in today’s trading environment with AI and automated tools, books help in making decisions based on solid thinking and logic which is more important than any software.
Benefits of reading Technical Analysis Books
Various benefits of reading technical analysis books are given below:
Builds a strong base : When you start trading, charts, indicators and patterns seem quite complicated. A good technical analysis book helps you explain all these basic tools slowly and in easy language.
Beneficial in the long term : The better the knowledge, the lesser the risk. By reading the best book for stock market technical analysis, you learn to control losses in trading and maximize profits.
Ability to do your own analysis : Books do not let you depend on others. You can read the charts yourself and take your trading decisions yourself without tips.
How to choose the right Technical Analysis book?
Choosing the right book ensures that your learning is efficient and practical. You can follow the steps below to pick a book that truly matches your level and goals:
Identify your needs and level : If you are a beginner, choose a book that explains basic concepts and charts. If you are at the intermediate or pro level, a book with advanced strategies or indicators will be more helpful.
Check the author’s experience and background : It is better if the author whose book you are reading is a trader or market analyst himself. An author with real market experience talks about more practical and useful things.
Read reviews and ratings : The value of the book can be estimated by looking at the reviews of genuine readers on platforms like Amazon or Goodreads.
Updated and relevant content : The market is changing, so your book should also be updated. Choose a book with tools and strategies that are useful in today’s market rather than old theories.
Check the language and level of understanding : The language should be easy, especially if you like to read in Hindi. A book that explains complicated terms in an easy way is more effective.
For successful trading in the stock market, just knowing the indicators is not enough, the right mindset and strategy are equally important. This mindset is what you get from a good technical analysis book. The books mentioned above not only teach tools and chart patterns, but also help you understand how the market participants think. If you are really looking for the best book for trading, then choose a book according to your needs and experience and read it completely. Remember, every decision in the market is important and a good book can help you make better decisions at every step.
S.NO.
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Can you imagine starting an investment with as little as ₹10? If not, then let us introduce you to the world of penny stocks. These are shares of companies that trade at low prices, often between ₹10 to around ₹50. Because of their affordability, investors can buy a large number of shares with a small amount of money. However, they come with equally high risks, as their prices are extremely volatile and can swing sharply in a short time. In some cases, these companies manage a successful turnaround, and their stock prices soar, delivering extraordinary returns. Such stories attract investors searching for the next big opportunity.
In this blog, we will talk about some of the most famous penny stocks in India, but also highlight the risks you need to be aware of.
India’s Top 10 Most Famous Penny Stocks
Before we move forward let’s look at some key market information. This table gives you a quick snapshot of these companies’ stock price, market capitalization, etc. The companies are listed in the decreasing order of market capitalization.
Company Name
Current Market Price (in ₹)
Market capitalization (in ₹ crores)
52 Week High (in ₹)
52 Week Low (in ₹)
Suzlon Energy Ltd.
59.4
80,761
86
46
Vodafone Idea Ltd.
6.58
71,290
16.6
6.12
Yes Bank Ltd.
19.1
60,010
25
16
IRB Infrastructure Developers Ltd.
45.4
27,447
66.9
41
Reliance Power Ltd.
44.4
18,384
76.5
29.2
Trident Ltd.
28.1
14,340
40.2
23.1
Jaiprakash Power Ventures Ltd.
18.7
12,823
27.7
12.4
Alok Industries Ltd.
18.2
9,047
29.8
13.9
GTL Infrastructure Ltd.
1.51
1,934
2.92
1.22
Dish TV Ltd.
5.03
926
15.9
4.70
(Data as of 18 August 2025)
Note: The companies mentioned above may or may not be financially strong. This list is based on their popularity as well-known penny stocks in India and should not be taken as a recommendation to invest. The term “famous” here is subjective, as it reflects the attention these stocks receive among retail investors rather than their actual financial performance.
Overview of Most Famous Penny Stocks in India
An overview of the top 10 famous penny stocks in India are given below:
1. Suzlon Energy Ltd.
Suzlon Energy Ltd was a pioneer in India’s wind energy sector, a true world leader. But it grew too fast, took on massive debt, and was nearly blown away by financial troubles.
The company makes wind turbines and provides complete renewable energy solutions. In recent years, with a focus on reducing debt and a global push for green energy, Suzlon has shown signs of a comeback. It has become profitable in recent years, and its performance is improving.
Vodafone and Idea were two separate telecom giants. But then, a new player entered the market and started a fierce price war. To survive, these two giants merged to become Vodafone Idea (Vi).
Today, Vi is one of India’s leading telecom companies, providing telecom and other digital services to millions. However, the company is struggling with huge debt and has been losing customers. Its stock price is low, but its market cap is massive because of the huge number of shares in the market. For investors, Vi is a bet on survival and a potential turnaround in the ever growing Indian telecom market.
It was once a fast-growing private bank, but then it collapsed dramatically due to bad loans. To save the banking system from a shock, a group of other banks, led by the State Bank of India, came together to rescue it.
Yes Bank is a full-service commercial bank offering everything from savings accounts and credit cards to corporate loans. After the rescue, the new management has been working hard to clean up the past dues and rebuild trust. The stock is famous because millions of investors are watching, hoping to see this company rise again.
IRB Infrastructure Developers Ltd. Every time you drive on a smooth new highway, there’s a chance a company like IRB Infra built it. It is a major player in India’s highway development, using the Build Operate Transfer (BOT) model.
The company’s business is to build and manage road and highway projects across the country. This is a long-term, capital-intensive business, the company’s performance depends on getting more government contracts, managing toll collections, and handling its large debt. For investors, it’s a stake on the continued growth of India’s infrastructure.
5. Reliance Power Ltd.
With the “Reliance” name attached, this company was launched with grand ambitions to solve India’s power problems. It is part of one of India’s largest business groups.
Reliance Power develops and operates power projects using coal, gas, and hydro sources. However, the journey has been tough, with challenges related to debt and project execution. The stock is famous because of its brand name and the sheer scope of developments. Its future is tied to India’s growing energy sector and the company’s ability to manage its large scale operations.
Trident has a story of steady growth. The company has grown from a yarn manufacturer to a diversified business with interests in textiles, paper, and chemicals.
Trident is a leading global manufacturer of terry towels and also produces paper and yarn. While it is a relatively stable and well-run business, its low share price puts it among the famous penny stock for investors. It represents a different kind of opportunity for a smaller, growing company.
7. Jaiprakash Power Ventures Ltd.
JP Power is part of the Jaypee Group, a conglomerate deeply involved in building India’s infrastructure. Its story is linked to the country’s development journey, with all its ups and downs.
The company operates both hydro (water-based) and thermal (coal-based) power plants. JP Power is famous for having extremely high trading volumes, which means a huge number of small investors are buying and selling it every day. It’s a high risk and reward investment in the power sector.
8. Alok Industries Ltd.
Alok Industries was a huge name in the Indian textile industry. But like many large companies, it faced financial trouble and went into bankruptcy. Then came a powerful new owner, Reliance Industries.
The company is a diversified textile manufacturer, making everything from yarn to fabrics and home textiles. The story here is all about the turnaround potential under the management of one of India’s biggest and most successful companies. Investors are betting that Reliance can help in the fast revival of this company.
9. GTL Infrastructure Ltd.
You may not have heard of GTL Infra, but you have likely used its services. The company is part of the invisible backbone of our mobile communication network. It was a pioneer in the business of sharing telecom towers.
GTL Infra owns and manages thousands of telecom towers and leases them out to telecom operators like Airtel, Jio, and Vi, who place their equipment on them. The company’s performance is directly tied to the financial health of the telecom industry.
10. Dish TV India Ltd.
Dish TV was a pioneer, bringing satellite television into the homes of millions of Indians. It was India’s first DTH (Direct-to-Home) television service provider.
Today, the company is facing a new battle, the way we watch entertainment has changed and with the rise of OTT platforms like Netflix and Amazon Prime, new challenges are arising. Dish TV has been struggling with falling revenues and profits as it fights to stay relevant. It is a household name, which makes it famous, but its future is full of challenges.
Key Performance Indicators
Company Name
Basic EPS (in ₹)
Net Profit Margin (%)
ROE (%)
ROCE (%)
Suzlon Energy Ltd.
1.52
19.02
33.92
24.15
Vodafone Idea Ltd.
-4.01
-62.85
0.0
-1.98
YES Bank Ltd.
0.79
7.91
5.11
1.06
IRB Infrastructure Developers Ltd.
10.73
86.92
32.68
5.95
Reliance Power Ltd.
7.34
38.87
18.04
5.91
Trident Ltd.
0.73
5.30
8.00
10.23
Jaiprakash Power Ventures Ltd.
0.89
14.89
9.59
10.05
Alok Industries Ltd.
-1.64
-21.98
0.00
-5.40
GTL Infrastructure Ltd.
-0.67
-65.11
0.00
-0.97
Dish TV Ltd.
-2.53
-31.10
0.00
-3.61
(Data as of March 2025)
Advantages and Disadvantages
There are clear advantages of investing in penny stocks that attract people, but the disadvantages are just as significant.
Advantages
High Potential Returns : This is the biggest attraction, because the price is so low, even a small jump can mean huge profits. For example, if a stock moves from ₹2 to ₹4, you have doubled your money, a 100% return.
Low Entry Cost : You don’t need a lot of money to start. With just a few thousand rupees you can buy a large number of shares. This makes new investors feel empowered.
Disadvantages
High Volatility : The prices of these stocks can swing wildly. A stock can jump 50% in one day and fall 50% the next. The risk of losing your entire investment is very high.
Low Liquidity : This is a hidden danger “Liquidity” means how easily you can sell your shares. For many penny stocks, there are very few buyers. You might want to sell, but it might take a while to sell these stocks.
Lack of Information : These companies are often not covered by big financial analysts. This information gap can be used by scammers. A common scam is the “pump and dump,” where operators spread fake positive news to “pump” up the price, and when investors buy in, they “dump” their shares, causing the price to crash.
Key Factors to Consider before Investing in Penny Stocks
Before you even think about buying a penny stock, here is a simple checklist to follow.
Check the Company’s Financial Health : One should not only consider the stock price but also look at the basics such as, is the company making any profits, are there too many debts, are the sales growing. You should check the company details before investing.
Check the Trading Volume : Volume means the number of shares being traded each day. A stock with high volume (millions of shares traded) is generally easier to sell. A stock with very low volume is a red flag as they are less liquid.
Check the Management and Promoters : Who is running the company, do they have a good reputation in the market as per business. Also, check the promoter holding, if the original owners (promoters) are holding a large chunk of the company, it can be a sign of confidence. If they are selling their shares, it could be a warning sign.
Diversification is Important : All investors should consider this, never put all your money into one penny stock. Divide your investment across different types of assets to reduce your risk. If one goes down, the others might save you.
Penny stocks offer the dream of massive returns from a small investment, but the reality is that they might fail, and investors may lose money. It is crucial to understand that investing in penny stocks can be highly speculative. You may hear about good returns and the low prices might be tempting, but the risks are enormous.
Before you decide to buy any penny stock, do your own thorough research about the companies and remember diversification is important. Furthermore, it is advised to consult a financial advisor before investing in any stock.
S.NO.
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They are shares of companies that are very cheap but also very risky. They have the potential for big returns, but you could also lose all your money.
Can beginners invest in penny stocks?
Beginners should be extremely careful. Because these stocks are so volatile and risky, it’s very easy to lose money. It is generally advised that beginners shall start with more stable and well known companies before venturing into penny stocks.
How can I buy or trade penny stocks in India?
You can buy penny stocks just like any other stock through an online trading platform like Zerodha, Upstox, or Pocketful, using your Demat account.
Can Penny stocks rise rapidly?
Their growth can be very fast, sometimes doubling or tripling in a short period. However, their prices can also fall just as quickly. The growth is highly unpredictable and is never guaranteed.
Penny stocks shall be seen as long term or short term investments?
There is no fixed time limit. It depends on your investment strategy and risk tolerance. Some people trade them for the short term to profit from price swings, while others may hold them for the long term, hoping the company turns around. Because of the high risk, it’s important to monitor them constantly.
There are times in the stock market when we expect a stock’s price to rise but don’t want to risk a large amount of capital. In such cases, OTM (Out of the Money) call options can be a cost-effective and limited risk strategy. These are call options with a strike price higher than the current market price, meaning they involve relatively small upfront costs but offer the potential for significant returns.
In this blog, we will explain in simple language what OTM calls are, how they work and when it is appropriate to use them.
What is an Option?
An option is a type of derivative contract that gives you the right but not the obligation to buy or sell a stock or index at a fixed price called the strike price on or before a specific date. Options are widely used for trading, hedging, and speculation.
Key Terms You Must Know
1. Call Option : It gives you the right to buy a stock at a fixed price. It is bought when you think the price of the stock will rise.
2. Put Option : It gives you the right to sell the stock at a fixed price. It is used when you expect the price to fall.
3. Strike Price : This is the price at which you can buy or sell the stock.
4. Premium : The amount you pay to buy the option is called premium. This is the upfront cost.
5. Expiry Date : This is the last date till which the option is valid. After this date the option expires.
What are OTM Options?
OTM (Out of the Money) options are those that have no intrinsic value based on the current market price. In other words, if the option were to expire today, it would be worth nothing because the strike price is not favorable for immediate exercise.
OTM options are cheaper in premium, as their probability of turning profitable is comparatively less. But this is what makes them attractive for low-cost and high-risk speculative strategies.
OTM options are mainly of two types:
OTM Call Option
OTM Put Option
What are OTM Call Options?
A call option is a derivative contract that gives a person the right to buy a stock or index at a specified strike price in the future. When we talk about OTM call options, it means that the strike price of the option is above the current market price of the underlying asset.
For example, if Nifty is currently trading at 25,000 and you buy a call option at 25,300, it is an OTM call option. OTM options have a lower premium because they are less likely to be profitable at expiry. But this low cost makes them attractive for speculative trades.
How Do OTM Call Options Work?
Low premium, high potential returns : OTM call options are generally cheaper because they currently have no intrinsic value. They have value at expiry only when the price of the underlying asset rises significantly above the strike price. This lower cost of entry makes them attractive, but the probability of profit is smaller, which also makes them a higher-risk choice.
The premium is your entire risk : When you buy an OTM call, you pay only the premium – and this is your maximum loss limit. If the stock price does not reach the strike price by expiry, you lose only the premium, not more than that.
Time Decay causes a decline in value : The effect of time decay (theta) on the value of OTM options is faster. As the expiry approaches, if the price does not move, the value of these options starts falling rapidly.
Breakeven Point is Strike Price + Premium : You make profit from OTM calls when the stock price goes above (strike price + premium). For example: If you bought a call option with a strike price of ₹220 and paid a premium of ₹10, then your breakeven will be ₹230 at expiry.
Suppose share ABC is currently trading at ₹1,000. You think that the stock may rise in the coming days. Instead of buying the shares directly, you decide to take an OTM call option with less risk.
You buy a call option with a strike price of ₹1,050, with a premium of ₹10.
Contract size: Let’s assume 200 shares
Total cost = ₹10 × 200 = ₹2,000
Now suppose the price of ABC shares becomes ₹1,080 on the day of expiry.
Intrinsic Value = ₹1,080 – ₹1,050 = ₹30
Net Profit per share = ₹30 – ₹10 = ₹20
Total Profit = ₹20 × 200 = ₹4,000
In this way, OTM call options can be a good choice for traders who want to capture a big move with less money, but correct estimation and timing is very important in this.
Risks and Limitations of OTM Calls
Trading in OTM calls can be risky due to the following reasons:
Usually OTM options become worthless on expiry : OTM call options do not have intrinsic value, and if the price does not go above the strike price by expiry, then this option becomes worthless.
Rapid effect of Time Decay : OTM options values are based only on time value. As the expiry approaches, the premium decreases rapidly, due to which the value can almost vanish.
A big price move is necessary for profit : Profit will be made only when the price of the underlying asset goes above the strike price + premium. This big move is not possible every time.
Buying more quantity can be dangerous : Because of the low premium, new traders often buy a large quantity of OTM options, which greatly increases their risk. In a sideways market, the entire investment can be lost.
Key Metrics to Watch Before Buying OTM Calls
Some of the key metrics to look at before buying OTM calls are listed below:
Implied Volatility (IV) : IV shows how much volatility is expected in the market. When IV is high, the premium of OTM call options becomes expensive. Buying OTM calls at high IV can make it even more difficult for you to reach the breakeven point.
Delta : The delta of OTM call options is very low (between 0.1 and 0.3), that is, the effect of changes in the price of the underlying asset is reflected slowly on the premium. This makes it difficult to get quick profits.
Volume and Open Interest : In an option with low liquidity, both entry and exit can be difficult. Always choose options that have both good volume and open interest.
Time till Expiry : If the expiry is very close, time decay can rapidly reduce the premium. It is better to choose a slightly farther expiry, especially if you are expecting a directional move.
OTM call options offer the potential for large gains at a relatively low cost, but success depends on accurately estimating the time, direction, and volatility of the market. They are best suited for traders seeking high potential returns with limited upfront risk. However, using them without a clear strategy can be dangerous. Always analyze market data, price movements, and time to expiry before entering a trade. When used wisely, OTM calls can not only protect your capital but also deliver substantial profits at the right moment. However, it is essential to consult a financial advisor before trading in options.
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Regaal Resources Limited, a prominent maize specialty products manufacturer in India, has opened its ₹306 crore IPO for subscription. The offering comprises a fresh issue worth ₹210 crore and an offer for sale amounting to ₹96 crore. The subscription window runs from August 12 to August 14, 2025, with a price band set between ₹96 and ₹102 per share. Following allotment, the company’s shares are scheduled to be listed on both the BSE and NSE on August 20, 2025.
Regaal Resources IPO Day 3 Subscription Status
Regaal Resources IPO has seen an extraordinary response, with overall subscription hitting 159.87 times. QIBs subscribed 190.96 times, NIIs 356.72 times, and retail investors 57.75 times.
Investor Category
Subscription (x)
Qualified Institutional Buyers (QIB)
190.96
Non-Institutional Investors (NII)
356.72
bNII (above ₹10 lakh)
387.71
sNII (less than ₹10 lakh)
294.73
Retail Individual Investors (RII)
57.75
Total
159.87
Total Applications: 35,65,292
Objective of the Regaal Resources IPO
Regaal Resources Limited intends to allocate ₹159 crore from its IPO proceeds towards the repayment and/or prepayment, either fully or partially, of certain outstanding borrowings. The remaining funds will be used for general corporate purposes.
Use of IPO Proceeds
Amount (₹ Cr)
Repayment and/ or pre-payment, in full or in part, of our certain outstanding borrowings availed by our Company
159
General Corporate Purposes
–
Regaal Resources IPO GMP – Day 3 Update
The grey market premium (GMP) of Regaal Resources IPO is ₹24, as on 5:00 PM August 14, 2025. The upper limit of the price band is ₹102, and the estimated listing price as per today’s GMP can be ₹126, giving a potential gain of around 23.53% per share.
Date
GMP (₹)
Est. Listing Price (₹)
Gain (%)
14-08-2025 (DAY 3)
₹24
₹126
23.53%
Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.
Important Dates for Regaal Resources IPO Allotment
Event
Date
Tentative Allotment
August 18, 2025
Refunds Initiation
August 19, 2025
Credit of Shares to Demat
August 19, 2025
Listing Date
August 20, 2025
Regaal Resources Overview
Regaal Resources Limited is one of India’s largest maize-based specialty product manufacturers, with an installed crushing capacity of 750 TPD. Headquartered in Kolkata, its zero-liquid-discharge facility in Kishanganj, Bihar benefits from proximity to maize cultivation hubs and key markets in East India, Nepal, and Bangladesh. The company produces native and modified starch, co-products like gluten and germ, and value-added products such as maize flour and baking powder, catering to industries including food, paper, animal feed, and adhesives. Between FY 2023 and FY 2025, revenue grew at a CAGR of 36.95%, supported by capacity expansion, diversified sourcing, and a growing domestic and export customer base.
How to Check Regaal Resources IPO Allotment Status
Regaal Resources IPO allotment can be easily checked online in two ways: from the Registrar’s website and from the BSE or NSE website. This IPO will be listed on both the exchanges – BSE and NSE, so the allotment status will be available to all investors on both platforms.
Method 1: Registrar’s website (MUFG Intime India Pvt. Ltd.)
The most reliable way is to check allotment from MUFG Intime India Private Limited’s website.
In options trading, terms like ITM (In the Money), ATM (At the Money) and OTM (Out of the Money) are part of everyday conversation for any trader. But if you are new to options trading, it is very important to understand the meaning of these three terms and know the difference between them, because they determine the value and risk of an option.
In this blog, we will learn about what ITM,OTM, and ATM options are and most importantly, how their definition differs in the context of Call Options and Put Options.
What is a Call Option?
A call option is a derivative contract that grants the buyer the right, but not the obligation, to purchase a stock or other asset at a predetermined strike price on or before a specified expiration date. Traders usually buy call options when the price of a stock is expected to rise. In this case, if the stock’s market price rises above the strike price, the option becomes “in the money” and starts generating profits.
The value of a call option comprises of two things:
Intrinsic Value (if ITM)
Time Value (decreases over time)
What are ITM, ATM and OTM in Call Option?
When you buy or sell a Call Option, its value depends on the difference between its strike price and the current market price (spot price). Three terms are used to understand this difference: In the Money (ITM), At the Money (ATM), and Out of the Money (OTM). Let us understand these three terms in detail in the context of Call Option:
In The Money (ITM) – Call Option
When the strike price of a Call Option is less than the current price (spot price) of the stock, then that option is considered In the Money (ITM). In this case, the option has intrinsic value because exercising it immediately would allow the buyer to purchase the stock below its market price, resulting in a profit.
Example : If Reliance stock is trading at ₹1,500 and you have a Call Option of strike price ₹1,450, then the call is said to be ITM.
At The Money (ATM) – Call Option
When the strike price and the current price of the stock are almost equal, the option is said to be At the Money (ATM). In this situation, the option has little to no intrinsic value and consists primarily of time value, meaning its worth is derived mainly from the time remaining until expiration and the potential for favorable price movement.
Example: Reliance stock is at ₹1,500 and you hold a Call Option of ₹1,500, then it is an ATM call option.
Out of The Money (OTM) – Call Option
When the strike price is higher than the current price of the stock, the call option is said to be out of the money (OTM). In this case, the option has no intrinsic value, and its value is based only on its time value. If the stock price does not rise over strike price by expiry, the option will expire worthless.
Example : If Reliance is at ₹1,500 and you have taken a call option of ₹1,700, then it is OTM.
If you are trading in call options, it is important to understand these three moneyness conditions as they determine how quickly your position can become profitable or expire worthless.
What is a Put Option?
Put Option is a derivative contract that gives the buyer the right to sell a stock or asset at a specified strike price by a specified expiry date. Whether to exercise this right or not is entirely up to the buyer. Buying a Put Option is beneficial when the price of a stock or asset price is expected to fall. If the market price goes below the strike price, the option becomes “In the Money” and the buyer starts getting profit. Put Options are often used to hedge existing portfolios or make speculative profits from a falling market.
Example: If Nifty is trading at 25,000 and you have bought a Put Option of strike price 25,500, then this option will be ITM because you have the right to sell at a higher price than the market.
What are ITM, ATM and OTM in Put Option?
The value of Put Options depends on where its strike price stands in comparison to the current market price (spot price). To understand this, we use three terms – In the Money (ITM), At the Money (ATM), and Out of the Money (OTM).
Below we will understand what these three conditions mean in the context of Put Option and how they affect trading:
In The Money (ITM) – Put Option
A put option is considered In the Money (ITM) when its strike price is higher than the current market price (spot price) of the underlying stock. In this case, the option has intrinsic value because exercising it immediately would allow the seller to sell the stock at a price above its current market value, resulting in a profit.
Example: Suppose a stock is trading at ₹1,900 and you have a Put Option of strike price 2,000 – then it will be ITM.
At The Money (ATM) – Put Option
When the strike price and the current market price are almost equal, the option is said to be At the Money (ATM). In this case, the option has no intrinsic value, only time value.
Example : The stock is at ₹1,900 and you bought a Put Option for ₹1,900 then it is called ATM.
Out of The Money (OTM) – Put Option
When the strike price is lower than the current price of the stock, the Put Option is said to be Out of the Money (OTM). OTM puts have no intrinsic value. However, OTM puts can still have time value, which reflects the potential for the stock price to drop below the strike price before expiration, giving the option a chance to become profitable.
Example : Stock is trading at ₹1,900 and you have a Put Option at ₹1,800 then it is OTM.
Understanding the moneyness of Put Options is important because it determines how much profit you can make in a falling market and with how much risk. Knowing the difference between ITM, ATM, OTM is very important for smart trading decisions.
Rapid decay if stock price doesn’t move in favourable direction
Use Case
Conservative trading approach
To profit from quick moves
Speculative bets, breakout trades
Common Mistakes Traders Make in Understanding ITM, ATM, and OTM
Some of the common mistakes traders should avoid while trading ITM, OTM and ATM options are listed below:
Underestimating risks of OTM options as they are cheaper : Many new traders buy OTM options because of their lower premium. But they forget that lower prices does not always mean higher profits. OTM options do not have intrinsic value, and if the price does not move till expiry, the entire premium can become zero.
Ignoring Theta Decay : ATM and OTM options lose value the fastest because their entire premium is based on time value. Especially near expiry, their value decreases rapidly – what we call theta decay. Without favorable price movement, these options can quickly become worthless.
Not understanding Risks while selling ITM options : Many traders sell ITM options without knowing that if the option is ITM near expiry, they may have to deliver the underlying asset (physical settlement).
Not tracking the Spot Price : To correctly understand the moneyness of the option (ITM/ATM/OTM), it is important to look at the real-time spot price. Many times traders make decisions based on the future price, which can lead to wrong strike selection and result in losses.
ITM, ATM and OTM options are not just technical terms, they are the foundation of option trading. Whether you buy or sell a Call or a Put, understanding the moneyness can be the difference between profits and losses. In options trading, predicting the correct direction is only half the battle. Choosing the right strike price is equally crucial. It is essential to choose between ITM, OTM, and ATM options based on the risk-reward ratio of your trading strategy and your overall risk management approach. It is advised to consult a financial advisor before trading options.
Frequently Asked Questions (FAQs)
What is the full form of ITM, ATM and OTM?
ITM: In The Money, ATM: At The Money, OTM: Out of The Money.
How to know if an option is ITM, ATM or OTM?
Check the strike price and market price to determine whether an option is ITM, OTM or ATM.
Which option is safer to buy?
No particular option can be considered the safest to buy, as its value can change significantly with market movements, time decay, and volatility. The choice depends on your trading objective, risk tolerance, and market outlook.
Why is ATM option premium higher than OTM options?
ATM option premiums are higher than OTM options because ATM options have the highest time value. At the money, the probability of the option expiring in the money is greater than for OTM options, making them more valuable to traders.
Can OTM become ITM before expiry?
Yes, an OTM option can become ITM before expiry if the underlying asset’s price moves favorably beyond the strike price, giving the option intrinsic value.
Exchange of Futures for Physical, or EFP, may sound like something reserved for seasoned traders, but at its core, it is a straightforward swap. One party hands over a futures contract, and the other delivers the actual commodity—be it oil, wheat, or gold. This method offers a smoother, more flexible alternative to the formal delivery process and is widely used in industries where physical delivery still matters.
In this blog we will break down how EFP works, why it is used, and where you will see it in action.
Understanding EFP
Simply put, an Exchange of Futures for Physical (EFP) is a sort of transaction in which a futures contract holder exchanges it with a person or party who holds the actual physical commodity, such as gold, wheat, or crude oil.
Think of it this way: your futures contract is like a coupon for a pizza, and your friend already has the pizza. Instead of waiting for the coupon to expire and going through the formal process to claim it, you simply swap the coupon for the pizza right away. Simple, quick, and no extra hassle.
EFP works the same way for major market participants. Instead of going through the official delivery process via the exchange, it allows them to privately negotiate and swap a futures position for the actual physical asset.
How Does it Work?
An Exchange of Futures for Physical (EFP) is like a private trade. A futures contract is an agreement to buy or sell something at a later date. The two parties agree to trade directly with each other instead of waiting for the formal delivery process through the exchange.
Here is what happens in order:
One party has a long (buy) futures position and the other has a short (sell) position. One person wants to get rid of the contract, and the other person wants the goods.
They talk about the amount, price, delivery terms, and other details in private, away from the trading floor of the exchange.
Futures are traded for real goods: The futures positions are closed out, and the agreed-upon commodity is delivered.
The deal is reported to the exchange. Even though it was made in private, the exchange still needs to be clear and record the deal to make sure everything is legal.
Key Features
Now that we have discussed what an EFP is, what separates it from a standard futures trade? The following are some characteristics that set EFPs apart,
1. Direct swap
Fundamentally, an EFP is simply a transaction in which one party surrenders a futures contract and the other delivers the actual commodity, such as wheat, gold, or oil.
2. The Deal Is Private
EFPs are negotiated privately between two parties, as opposed to standard trades that take place on a public exchange. They agree on terms privately.
3. The Exchange must be notified
The transaction is not confidential, despite taking place in the background. After everything has been decided upon, it is reported to the exchange, making it official.
4. Customise the Deal
What’s amazing about EFPs? Standard terms do not have to apply to you. Whatever works best, how much, where, when, and so forth, can be decided upon by the two parties.
5. Usually carried out by the major players
Casual traders are not the target audience for EFPs. Producers, manufacturers, and large organisations that need to move real goods or adjust their positions are more likely to use them.
Why do Traders use EFP?
You may be asking yourself, “Why put in all this work for a private swap when you can just continue trading futures normally?” EFP is simply much more convenient for many traders and businesses. They prefer it for the following reasons:
1. Avoid formal delivery processes
Futures traders occasionally do not wish to go through the entire formal delivery process through the exchange. They can get right to the point with an EFP, one party receives the goods, and the other party terminates the agreement.
2. Convert futures into physical commodities when needed.
Suppose a business used a futures contract to protect itself from fluctuations in wheat prices. EFP allows them to exchange that paper contract for the actual wheat now that they are in actual need of it. If they already have the wheat, they can also convert it into a futures position.
3. Choose delivery time, place, and quantity.
Where, when, and how much are all predetermined for standard exchange deliveries. EFP, however, gives both sides the opportunity to discuss what suits them best. Whatever works best for them, they can choose the delivery location, time, and amount.
4. Adjust positions privately without impacting the market.
EFPs are frequently used by large traders to adjust their positions or hedges without causing a stir in the open market. These transactions don’t affect prices or attract undue attention because they take place in private.
5. Maintain discretion for large or sensitive trades.
Not everyone wants the public trading screen to display their moves. EFPs provide some privacy because they are conducted behind the scenes, which is particularly helpful for large trades or delicate transactions.
Where are EFPs commonly used?
People use EFPs most often in markets where physical delivery is still important, like:
The markets for crude oil and energy
Gold, Silver, and Copper
Agricultural Goods (Wheat, Corn, Soybean)
Money and Financial Futures
Real World Examples
Let us look at an example from the market for crude oil.
A refinery has bought futures for crude oil, but it now needs the actual crude oil to process at its plant.
A producer or supplier with the opposite short futures position wants to get out of futures and deliver real oil.
They come to an agreement on an EFP deal, in which they trade and the other party exchanges their futures positions for the same amount of crude oil.
The oil is delivered to the refinery, and the futures positions are closed.
EFPs are often used by companies that make, refine, or trade commodities to manage their exposure to real-world supply and price changes.
Regulatory & Exchange Needs
EFPs require that a futures contract be exchanged for actual goods. It must be a legitimate business transaction; you cannot simply act as though you are trading something for show.
The transaction must be reported to the exchange (such as CME, ICE, or MCX in India) after both parties have approved the swap. In this manner, the exchange can resolve it and ensure that everything is legal.
The quantity, quality, and product type of the physical goods being exchanged should match those specified in the futures contract. A futures contract for 1,000 barrels of oil cannot be exchanged for 700 barrels.
In the event that regulators wish to review the transaction later, the parties involved must maintain accurate records of the transaction, including the terms, the person they traded with, and the proof of delivery.
Not all contracts in the futures market qualify for an EFP. Specific guidelines govern which contracts, usually those that are physically settled.
Conclusion
Exchange of Futures for Physical (EFP) may initially appear to be one of those jargon-heavy financial terms meant for experts. Once you know the basics, though, it is just a clever means for traders to exchange a futures contract for actual commodities such as wheat, gold, or oil.
Big players who deal in tangible goods and want greater control over delivery schedules of assets are the ones who use it the most. They negotiate terms directly with the other party, bypass the formal process, and keep transactions smooth.
S.NO.
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No. EFPs are mainly designed for large traders and organizations that deal in substantial futures positions or need the actual delivery of the underlying commodity.
Is EFP secure and legal?
Completely legal! All that is required to make it official is to report it to the exchange.
What distinguishes EFP from standard futures delivery?
EFP allows both parties to customise the deal according to their terms. Strict exchange regulations apply to regular futures deliveries.
What is being traded in reality?
The real commodity is delivered by one party while the other forfeits a futures contract.
Where does an EFP transaction take place?
Although it is a private agreement between two parties, the exchange is informed once it has been reached.
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