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OnlineTradingInvesting.com

OnlineTradingInvesting.com was created mainly for helping beginner traders, advanced traders & investors of all levels and to teach them how to invest in the market and how to trade in the market, effectively and efficiently. It consists of all the very basics you need to know before getting involved in the financial markets. You will learn about the market in general, stock exchanges, stocks, the stock market in general, bonds, mutual funds, options, futures, currency trading – FOREX and many other things. The basic information is free and is included in the articles. We have also provided material where you can further your education and perfect your investment and trading skills. We have created this site so that new investors/traders do not go into the market uneducated and end up losing all of their money.

How to invest in the gold bullion market of India?

July 12, 2013

The most favored commodity in India is gold and bullion among all other commodities. No matter how much they have the house hold women also have the urge to buy that little extra when it comes to gold. This craze has not died for the last century leading to increase in gold prices many fold. It has passed down the generations and it will keep on generating interest in future also.

With the advent of trading the educated youngsters are more interested nowadays to invest in gold shares and stocks. They have moved away from the traditional method of buying physical gold. This is because physical gold has many sorts of disadvantages. The risks are high. The storage costs are quite high too. They need to buy the physical gold either from banks or financial institutions at high prices without any discount. Hence to counter all these disadvantages people have started to shift towards electronic form of trading in gold.

Gold is the most traded commodity all over the world as it is in India also. The openings of exchanges like MCX and NCDEX have helped gold attain such supremacy in India. Thus if are an owner of a gold trading account you can invest, speculate in gold options or futures or swaps.

When buying gold in raw physical form you will have to dish out cash which is not very feasible at all times. But when you are looking to buying gold in the electronic form you have many options to grab. There are spot pricing, swaps and futures. In addition to that the risks associated with the purchase of physical gold are removed completely. Let us delve deeper in the area of gold trading for all those who have little idea of derivatives and other financial instruments.

A gold future is an agreement where the buyer can take delivery of the gold at a future date. The price of the exchange is fixed from before. There is an advantage associated with the future contracts. The price of the futures in case of gold keeps on varying as per the spot prices and hence there is no losses incurred. In a futures contract you will only need to pay the amount that is needed to initiate and maintain the agreement. This percentage is generally 15% of the total value. Such an agreement could prove profitable if the prices shoot up but the losses can be sky high if the market is against you.

While dealing in gold options, the investors can look to put or call the option. When an investor purchases an option, he is willing to bet that the price will reach that margin for certain period of time. A premium is paid by the investor which varies as the price reaches his targeted value. The greatest advantage with the options is that as an investor you can always cut down on your losses.

It is not all difficult to trade gold shares electronically. All you need to do is open a trading account with any broker. That broker should be a member of the MCX or the NCDEX. On submitting the form the account will be opened. The broker will provide you with two accounts.

One of them is a demat account while the other is a trading account. The demat account handles all the documentation and certificates. The trading account is used to handle all the monetary transactions. You will be provided with a login password and a transaction password. All the trading can be done online itself. So what are you waiting for, grab the software now! In order to get a demat account in India, it is mandatory that you mention your PAN card number. Visit http://www.nripan.com/ to apply PAN Number Online.

How to send money out of India?

June 25, 2013

When you have moved outside of India and become an NRI or you know an NRI, you will be faced with some difficulties financially. One thing that you must keep in mind would be how you are going to get money outside India to pay your bills or take care of you or your family in a foreign country. There are many ways of going about this, but you need to understand all of your options.

1.                          ICICI Bank or most other banks has one option that you can use. This is a fast easy solution. You can use it for gifting money and to pay for your education abroad. There are easy currency transfers and great rates at ICICI. In order to use this method, you will just need to provide an address proof and an ID proof document. With ICICI, you have two options; one option is going into the bank in person and getting a Foreign Currency Demand Draft made by them. The other option is a Wire Transfer made by your bank to an account that you hold in your foreign country.

2.                          A check made out in a foreign currency. Anytime that you send a check abroad to another country, you cannot have it in Indian Rupees. When you are planning to send a check, you will need to go to your bank and submit proof of why you are sending money. A example would be to provide any legal document or letter stating the reason for sending money abroad. You will also need to bring an ID proof document such as your passport.

3.                          You can send money to someone abroad using Paypal. This is an instant online method that is very popular today. Any person that you decide to send money to in paypal has to have an active Paypal account as well. Keep in mind that you must be able to provide a Tax Id number when using this method online. This method is by far the fastest and easiest method, but is normally only used for personal use and not business.

When using any of the above methods, you will be asked to your tax information such as a Tax ID number also know as a PAN number in India. You can always obtain a PAN online, even from abroad in any other country, from http://www.pancardonline.com/.

The following are reasons for sending money outside of India that are generally not allowed: Sending money or traveling to Nepal or Bhutan, Sending Lottery money or any other prize money, and money that is held in an NRO account.

PAN card broker and agents in India!

February 23, 2013

Are you looking to apply for a PAN card in India for any reason: opening a bank account, investing, filing taxes, etc? It can become a difficult process if you are an Indian living abroad. If you want to apply for an OCI card or a PIO card, and you live in the United States, there are ways of getting it done in the US without coming to India. They have offices there. In the case of a PAN card, that is not the case. There are no PAN card offices in the US.

There are now some online brokers to help you obtain your PAN card from abroad. If you use a broker, you will not need to come to India. The only downfall with an online broker would be that you may have to send your documents and forms to India in the mail as all of the brokers have their offices in India. Over the years, the process with an online broker has become easier and easier. You can now pay with credit or debit card online in order to begin your process. If you go straight through the government, you are required to provide an Indian Rupee check. This has become more difficult for those living outside of India.

After you have made the payment and started your process, the broker will help you step by step complete your application and provide the necessary documents. They are available via email and phone if you have any questions. When you are finished and you have mailed your completed application and documents to them, they will check them and make sure they are ready to be submitted.

The broker will then take your application to the PAN department and have them submitted on your behalf. They will discuss any issues with the PAN Officer and make any corrections that are needed and re-submit until the job is finished. If you decide to come to India and obtain your PAN card straight through the government office, you will need to have everything perfect because the office is generally very strict and will send you away with any mistake.

If you are ready to start your PAN process and you don’t know where to start or which broker to use as an NRI, you can simply search on “google.com” and find an abundance of them to choose from. From my experience, I would personally recommend: http://www.nriinvestindia.com/nri-apply-pan-card-online.html

How to save on tax while selling your property in India?

January 18, 2013

If you are looking to make a profit, timing is everything when it comes to finance. You need to be sure that you are doing it on the correct date. Keep an eye on your calendar for the best dates. When you buy a property with the intention of selling it later on, you also need to time it right so that you can get the most profits out of it.

The best time to sell your property is when it is getting you at least 60% in profits. When selling you always need to keep taxes in mind as well. You will always be asked to pay taxes on the profits that you make. There are also some taxes from the loans you take as well.

When you buy a house, it is advised that you keep it for more than three years. If you sell it before then, you will not have the same tax deductions and would end up paying more in taxes. If you wait, you can also mention all of the taxes on your tax return.


NRI Capital gain and indexation

When you sell your property, the profit that you make off of it is known as capital gains. This is because real estate is considered an asset. If you sell your property before 3 years, it is a short-term capital gain. Therefore there are different tax rules. There are many more tax exemptions for long-term capital gains. With long-term capital gains, the seller is able to inflate the value of their assets through indexation. An assets value will deteriorate over time, so you should increase the initial cost of the house. Keep track of your cost inflation index also known as: CII. The indexation of purchase price helps to lower the net capital gain. This in return, lowers the taxes for you as a seller.


Reducing your taxes

In order to take advantage of most long-term capital gain tax exemptions, you must buy a house or build another house within three years of selling the one that you have. For this, you can utilize Section 54. You can also use section 54 for any other long-term capital gain generated from other assets besides property and real estate. The proceeds from selling a property should only be invested again in a residence, not into any commercial real estate. You also should not own more than one house at a time in order to benefit from the tax exemptions. You can invest in up to Rs.50 lakhs in every financial year in India. Tax laws are also different depending on if you are a resident in India. You will need to look up all of the tax laws carefully if you are an NRI.


What if you miss the tax due date?

If you are unable to get the exemption before the due date for your tax return, you will need to open a different account to keep all of your capital gains. You must do this before the last due date for filing a tax return. You can only do this with a Savings Deposit account or a Term Deposit account. The interest rates for these are usually the same as a regular bank savings account. When you fill up your tax return, you must attach proof of the deposits and send it along with the tax return forms. Doing this will help you receive the exemption.


Do I get a PAN number if I want to save taxes on the profits I made by selling my real estate?

Everyone who decides to invest in India, even NRIs (Non-Resident Indians) have to have a PAN card because once they sell that investment they have to pay taxes on that capital gains. And to pay taxes you need to have a PAN card. This would be the first step.

If you are an NRI, please contact:

http://www.nriinvestindia.com/nri-apply-pan-card-online.html

How can NRIs, PIOs & OCIs invest online in Indian Mutual Funds?

July 6, 2012

Invest in Indian Mutual Funds OnlineNRI’s (including PIO’s and OCI’s) have always wanted to invest in Indian mutual funds, but mostly are unable to do so due to

1. Lack of knowledge of rules and regulations,

2. Hassled by the paperwork and red tapeism involved,

3. Wrong information provided and;

4. Lack of options

Mostly, NRI’s are not aware of rules and regulations on investment front in India and when they try to gather information online or through their relatives or friends, they mostly get either wrong information or incomplete information. There are very less organizations that cater to this niche market as it involves lot of patience and determination due to the time difference between the countries. One of the wrong information is that, “NRI’s PIO’s OCI’s are not allowed to invest in Indian Mutual funds”. Specially lot of NRI’s in the US and Canada mostly understand that they are not allowed to invest in Indian mutual funds.

The fact is completely opposite. Now even foreign nationals, without any Indian background from selected countries (except Bangladesh, Pakistan, Nepal and certain other countries that might be barred by the Reserve bank of India from time to time and countries that are not members of the Financial Action Task Force) including the US and Canada are allowed to invest in Indian mutual funds.

All they need to invest online is an account with a service provider that provides online investment in Indian mutual funds. One such provider is www.NriCapital.com.

Traditionally whenever an NRI wanted to invest in Indian Mutual funds he/she would have to send the application form, along with a copy of his pan card, an identity proof, a cheque for the investment and send it to his advisor in India who then would get the application processed. The process was time consuming, involved lot of paperwork and hassles of sending different applications, different cheque and set of papers if one wanted to invest in multiple Mutual funds at the same time.

Things now stand changed. Sites such as www.NriCapital.com allows NRI’s, PIO’s and OCI’s to open online investment account with them after which the can invest in Mutual funds online itself without having to fill any papers or having the headache to send couriers and keep a track of it. Some other banks also provide this facility like ICICI Bank but they charge a transaction fees, HDFC BANK, CITIBANK but the major loophole is that you need to have your NRE/NRO account with these banks only.

Find the one that offers you the maximum number of mutual funds companies, payment facility by maximum number of banks and does not charge or charges the least amount. Our recommendation would be www.NriCapital.com.

Trading in Today’s Global Markets Requires Attention to All Interest Rates

June 26, 2012

Investing in today’s modern era of globalization is often difficult due in part to the many undisclosed interdependencies that have developed over the past few decades.  As much as we would like to believe that our local economies are independent efforts, the new reality is that we are interconnected more than ever with what happens outside of our national borders.  One constant in this ever-changing milieu, however, is the impact of central bankers on the money supply, especially when monetary policy involves interest rate modifications.

The “fundamentals” do move the forex market, and one of the most important considerations is the role of interest rates.  One of the first lessons in any forex tutorial instructs the student to watch interest rates like a hawk, for both countries in your currency pair of choice.  This guidance sounds simple enough, but in practice it becomes difficult because central banks have many ways, both public and private, to modify the interest rate environment in their respective markets.

Central banks can change the prevailing discount rate with a public announcement, or they can maneuver behind the scenes buying and selling treasury securities, sometimes referred to as “open market activities” or “intervention”.  They may even issue new securities, thereby expanding the money supply, diluting the purchasing power of the currency, and forever changing the supply/demand demographics going forward.

The Indian Rupee has declined by 20% versus the U.S. Dollar over the past year for several reasons, but the correlation with declining interest rates in 10-Year U.S. Treasury securities is unmistakable, as depicted in the following chart:

 Forex Market Correlations

Developing economies in today’s world face many challenges, but one issue that can be very destructive on a local economy is how quickly investment capital flows can suddenly shift from being positive inflows that are supportive to negative outflows that have the opposite effect.  The “carry trade” is part of the problem.  Positive growth and profitable returns will attract global capital like a magnet.  Banks and companies tend to borrow in Yen or Dollars, where interest rates are low, and then invest in countries like India where opposite conditions prevail.  If the Yen or Dollar suddenly appreciates, generally during a financial crisis, traders must suddenly “unwind” these carry trades or risk losses if their positions were un-hedged.

Occasionally, the actions in rates can be counter-intuitive, requiring further analysis to determine the causes at hand.  The debt crisis in Europe and the declining nature of the global economy in response to it have combined to create a level of uncertainty in the minds of the global investment community, like none other in recent memory.  Each day is an “either-or” proposition – either “Risk on” or “Risk off” in today’s vernacular.  The aversion to risk is ongoing, a detriment to economic growth in general, but a common expectation that causes capital flight to “safe havens” in an instant.

In the above chart, interest rates on long-term U.S. securities have dropped 45% from 3.00% down to 1.65% in just twelve months.  The rush in capital flows to safety has created increased demand on the Dollar, forcing an appreciation in the greenback and the reverse in nearly all currency-pair combinations, the Rupee included.  The capital inflows necessary to support these changes have come primarily from developing economies around the world.  As a result, the Rupee declined 20% in response.  Free trading charts at forexcharts.net reflect this general strengthening of the Dollar.

There are most definitely many other factors at play here, but pay close attention to changes in the interest rate arena if you want more consistent forex trading results.

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