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October Monthly Inflation down to 8.58%

The previous article was intended to be a reintroduction to HMVC for the web application era. HMVC is not a new concept: it was originally referenced in a Java World article over ten years ago and based on an idea that dates back forty years.

Short Takes: STT and Option Prices

Learn why option prices seem to be very low on expiry day - the reality is that a regulatory cost, the Securities Transaction Tax (STT), eats up too much that it leaves options quoting at less than intrinsic value.

Click to watch the Short Takes Video.

Short Takes: Mutual Funds Are Not Just For Equity Investing

There's a popular misconception in India that Mutual funds are too risky because they invest in stocks. Learn about where Mutual funds can invest - and how you can get a low risk exposure to what is otherwise unavailable to you. 

Watch the Short Takes Video

Mutual Funds Are Not Just For Equity Investing

There's a popular misconception in India that Mutual funds are too risky because they invest in stocks. But mutual funds can invest in debt too, from the ultra-liquid money markets, to the ultra-safe government bond market. Some of these markets are not even available to you, as a retail investor.

With mutual funds, you can also choose a variety of risk exposure: want a half equity, half safe exposure? Choose a balanced fund. You can also determine the term of your investment - if you're looking to hold something short-term, then a short term debt mutual fund might tickle your fancy. For long term safety, you might choose an LT Gilt fund that invests in government securities.

In the video we list different combinations, and what your options are. Watch and comment away!

(7 minutes)

Short Takes: No more third party cheques for Mutual Funds

Read about AMFI's latest regulation - that one person's cheque will no longer be usable as investment into another investor's account. Under Short Takes, a new five minute video explains the regulation, and why it came about.

See: No More Third Party Cheques for Mutual Funds

No more third party cheques for Mutual Funds

Mutual funds will no longer accept cheques from someone else to open an account in your name. This is to avoid a scam that has been going on with advisors taking cheques from people and filing an application in their own name instead.

The repurcussions, for all of us, is that now we must invest in mutual funds with a cheque from our own account. While this may sound obvious, there are some reasons why we may want it differently - for instance, investing in the name of your children, or for mutual fund "gifts". We talk about the different reasons for, and implications of this rule.

(5 minutes)

STT and Option Prices

Why do in-the-money options seem to have no time value?

Options have a time value component to account for the time remaining to expiry, and an "intrinsic" value - the difference between the stock and the strike price (called the "ITM" or in-the-money amount). On expiry day, with nearly no time remaining, you would expect the option to trade at it's intrinsic value, or whereabouts. Yet, most in-the-money options trade below intrinsic value!

The reality is that a regulatory cost, the Securities Transaction Tax (STT), eats up too much that it leaves options quoting at less than intrinsic value. Deepak Shenoy tells you how.

(6 minutes)