SIBM - Muscat batch VI
Sunday, October 19, 2014
Thursday, August 7, 2014
https://www.facebook.com/sibmkti6
Dear Friends...Lets All Meet At "Holiday Inn Al-Khuwair" On 14th August 2014 At 09.30 PM And Celebrate The 68th Independence Day...Great Food And Tipsy Drinks Will Get Us Going...Time To Get High And Sing The National Anthem...Cheers... — at Holiday Inn.
Monday, July 14, 2014
Avoid These Common Strategic Planning Activities
When it comes to setting strategy, most companies do three things that are useless. These exercises may be familiar and reassuring, but you should not:
• Wait until the annual strategy review to revisit your strategy. Competitors don't wait a year to attack, customers don't wait to shift their preferences, and new technology doesn't wait to change the game. Monitor the marketplace continuously, and keep your strategy choices aligned with it.
• Put together a SWOT analysis to kick off the process. There is no such thing as a generic strength, weakness, opportunity, or threat. A strength is only a strength in specific contexts. Rather than trying to analyze these in advance, first figure out where you want to play and how you'll win.
• Worry about a perfect mission statement right now. You can’t finalize your statement without choosing where to play and how to win. Start with a draft that you can revisit.
Source: Harvard Business School Publishing, an affiliate of Harvard Business School
Sunday, July 6, 2014
NUTS AND BOLTS WEEKEND
Dear Friends...Lets All Meet At Nuts And Bolts, Al Falaj Hotel On 7th August 2014 At 09.30 PM And Have An Amazing Time...Great Food And Tipsy Drinks With Our Very Own DJ Will Get Us Going...Some Pool And Foosball To Look Out For....Cheers...
Friday, July 4, 2014
Ramadan Kareem - Iftar Celebrations
Ramadan is the ninth month in the Islamic calendar. That doesn't mean September. This year, 2014, it will begin on June 28 and end July 28.
Our Friend who are fasting in the holy month of Ramadan are organizing an Iftar party today in the evening. So lets come together and enjoy the snacks and with everyone "Ramadan Kareem"
Monday, June 30, 2014
Illustration of a Put Option on stocks
Illustration of a Put Option on stocks
Put Options on stocks also work the same way as Call Options on stocks. However, the Option buyer is bearish about the price of a stock and hopes to profit from a fall in its price. Getting back to the example of Reliance shares, assume that bad news is expected at the AGM and you believe the price of Reliance will fall from its current level of Rs 950 per share. To make the most of a fall in the price, you could buy a Put Option on Reliance, at the strike price of Rs 930 at a market determined premium of say Rs 10 per share. You would have to pay Rs 6,000 as premium (600 shares x Rs 10 per share) to purchase one Put Option on Reliance.
Here’s what you and the seller of the option derive from this transaction under various market conditions.
Put Options on stocks also work the same way as Call Options on stocks. However, the Option buyer is bearish about the price of a stock and hopes to profit from a fall in its price. Getting back to the example of Reliance shares, assume that bad news is expected at the AGM and you believe the price of Reliance will fall from its current level of Rs 950 per share. To make the most of a fall in the price, you could buy a Put Option on Reliance, at the strike price of Rs 930 at a market determined premium of say Rs 10 per share. You would have to pay Rs 6,000 as premium (600 shares x Rs 10 per share) to purchase one Put Option on Reliance.
Here’s what you and the seller of the option derive from this transaction under various market conditions.
Very Simple Illustration of a Call Option on a stock
Very Simple Illustration of a Call Option on a stock
In the Indian market, Options cannot be sold or purchased on any and every stock. SEBI has permitted Options trading on only certain stocks that meet its stringent criteria. These stocks are chosen from amongst the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six months on a rolling basis, amongst other technical criteria.
Suppose the AGM of RIL is due to be held shortly and you believe that an important announcement will be made at the AGM. While the share is currently quoting at Rs 950, you feel that this announcement will drive the price upwards, beyond Rs 950. However, you are reluctant to purchase Reliance in the cash market as it involves too large an investment and you would rather not purchase it in the futures market as futures leave you open to an unlimited risk, in case the market goes against you. Yet you do not want to lose the opportunity to benefit from this rise in price due to the announcement and you are ready to stake a small sum of money to rid yourself of the uncertainty. An Option is ideal for you. Depending on what is available in the Options market, you may be able to buy a Call Option of Reliance at a strike price of 970, although the spot price is Rs 950 at present, by paying a premium of Rs 10 per share. The total premium that you will have to pay is Rs 6,000, since one contract of Reliance consists of 600 shares.
You start making profits once the price of Reliance in the cash market crosses Rs 980 per share (i.e., your strike price of Rs 970 + premium paid of Rs 10).
Now let's take a look at how your investment performs under various scenarios. If the AGM does not result in any spectacular announcements and the share price remains static at Rs 950 or drifts lower to Rs 930 because market players are disappointed, you could allow the Call Option on Reliance to lapse. In this case, your loss would be Rs 10 per share, amounting to a total of Rs 6,000. However, things could have been worse if you had purchased the same shares in the cash market or in the futures segment.
On the other hand, if the company makes an important announcement, it would result in a good amount of buying and the share price may move to Rs 1,000. You would stand to gain Rs 20 per share, i.e., Rs 1,000 less Rs 980 (strike price of Rs 970 + premium of Rs 10), which was your cost per share.
As in the case of the index Call Option, the writer of this Options would stand to gain only when you lose and vice versa, and to the same extent as your gain/loss.
In the Indian market, Options cannot be sold or purchased on any and every stock. SEBI has permitted Options trading on only certain stocks that meet its stringent criteria. These stocks are chosen from amongst the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six months on a rolling basis, amongst other technical criteria.
Suppose the AGM of RIL is due to be held shortly and you believe that an important announcement will be made at the AGM. While the share is currently quoting at Rs 950, you feel that this announcement will drive the price upwards, beyond Rs 950. However, you are reluctant to purchase Reliance in the cash market as it involves too large an investment and you would rather not purchase it in the futures market as futures leave you open to an unlimited risk, in case the market goes against you. Yet you do not want to lose the opportunity to benefit from this rise in price due to the announcement and you are ready to stake a small sum of money to rid yourself of the uncertainty. An Option is ideal for you. Depending on what is available in the Options market, you may be able to buy a Call Option of Reliance at a strike price of 970, although the spot price is Rs 950 at present, by paying a premium of Rs 10 per share. The total premium that you will have to pay is Rs 6,000, since one contract of Reliance consists of 600 shares.
You start making profits once the price of Reliance in the cash market crosses Rs 980 per share (i.e., your strike price of Rs 970 + premium paid of Rs 10).
Now let's take a look at how your investment performs under various scenarios. If the AGM does not result in any spectacular announcements and the share price remains static at Rs 950 or drifts lower to Rs 930 because market players are disappointed, you could allow the Call Option on Reliance to lapse. In this case, your loss would be Rs 10 per share, amounting to a total of Rs 6,000. However, things could have been worse if you had purchased the same shares in the cash market or in the futures segment.
On the other hand, if the company makes an important announcement, it would result in a good amount of buying and the share price may move to Rs 1,000. You would stand to gain Rs 20 per share, i.e., Rs 1,000 less Rs 980 (strike price of Rs 970 + premium of Rs 10), which was your cost per share.
As in the case of the index Call Option, the writer of this Options would stand to gain only when you lose and vice versa, and to the same extent as your gain/loss.
Thursday, June 26, 2014
All can blog now!!!
Hope you all had a great day at home and work.
I have extended the permission for all team so that each one of us should be able to write and blog on this site.
An automated email would have been received by you asking to accept the invitation. Kindly accept and get your authority to write blogs and discussions freely.
Of course you would need an Google Account to log in and I hope all of you have one :)
So its time to contribute and make this community of ours lively with new ideas and suggestions.
Contribute freely without any apprehensions. This is our exclusive space and no matter what your thoughts are don't stop, write it and share!
Take care all....
Cheers
Deepak
I have extended the permission for all team so that each one of us should be able to write and blog on this site.
An automated email would have been received by you asking to accept the invitation. Kindly accept and get your authority to write blogs and discussions freely.
Of course you would need an Google Account to log in and I hope all of you have one :)
So its time to contribute and make this community of ours lively with new ideas and suggestions.
Contribute freely without any apprehensions. This is our exclusive space and no matter what your thoughts are don't stop, write it and share!
Take care all....
Cheers
Deepak
Thursday, June 19, 2014
Welcome to the SIBM Muscat Batch 6 Online Community!
It is said, better late than never! I thought so precisely and even
as we are already half way through the course, I decided to launch this
web based community of ours. I hope that we will make use of it and may
be we can still keep this ON even after the course is completed.
I
believe that we can enhance this online presence of ours and use this
for fun, knowledge sharing and collaborating. Distance is not a
constraint anymore with internet connecting everyone without boundaries.
Hope all of you would like this exclusive experience of being online within a small community that belongs to only to us!
Pour in your comments lets keep this lively
Cheers & Lets have Fun!
Deepak
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