It's month end and a Rs. 50,000 investment opportunity presents itself

Dear Kundapur Govardhana Kini, Yes, this mail is exactly about what the subject line says. That it's the month end and a Rs. 50,000 investment opportunity presents itself. But the salary will come only on the first of next month. So what to do? Simple question. But, surprisingly, so is the answer. In fact, this actually came up at one of our ICICIdirect Knowledge programmes, when Vishal Singh, one of the attendees asked exactly this, "Is there is a way in which one can pay only Rs. 20 for placing a Rs. 100 Buy order at the end of the month, because one's salary will only come on the 1st of next month?" The answer was prompt, "Of course there is. And there always was. By trading in what is called the 'Margin product', one can actually do this". Vishal was fascinated as were some other attendees in the programme. So how does one invest a larger amount today so as to make the most of the opportunity? The programme continued. The trainer explained. He even showed the demo of the 'Margin' product. And Vishal learnt the ropes quite well, we think. The trainer gave an example by way of illustration: Now let us say that there is one Saurav Jain who got a 'strong buy' call from ICICIdirect.com research report on Balrampur Chini on November 27, 2009, at the end of the month, when he has mostly spent his salary, or invested it elsewhere. And let us say the scrip was at Rs. 128 on that date. But Saurav has only Rs. 10,000 to spare. But what he wants to invest is Rs. 50,000, to make the most of the investment. And let us say, the time is 10:15 a.m. and it's Monday. So what does he do? Well, he first logs in at ICICIdirect.com, clicks on the 'buy' section under 'equity' and selects 'margin' with client square off mode option as shown below: Then he inserts the quantity of 350 shares. He now clicks the 'Buy Now' button to buy. Having done so, he has to now bring Rs. 40,000 (balance due) by 3:00 p.m. on Wednesday (technically called "T+2" days) as per the new and enhanced margin product feature in ICICIdirect.com. Thereafter, having done so, he has two choices available to him. One that he 'takes delivery' in a few simple steps. First he clicks 'modify allocation, allocates Rs. 40,000 in equity (by now his salary has come into his account), then clicks 'Convert to Delivery' on pending for delivery page. Now the shares are in his demat account and he can choose to deal with them the way he wishes - either retain them or sell them. But in the event the price of the shares goes up, he may in fact choose not to take delivery and simply 'square off' (by clicking on 'Square off' in Pending for Delivery Page). So if the profit made is Rs. 1,000, then Rs. 11,000 (Rs. 10,000 plus Rs. 1,000) would be credited into his bank account. Simple, isn't it? So that was the gist of the margin product, as explained by the trainer. But if you still have a question, you might just find it in our FAQs. So, click here. Or register for a ICICIdirect Knowledge Programme. In fact, for any queries that you may have, you could call our Call Centre. Even better, you could have a detailed personal interaction at any of our ICICIdirect stores that are engaged in helping turn money to wealth. These are financial superstores with a wide range of financial products and services. Locate one close to you. Simply click here. As always, your suggestions are welcome and feedback, eagerly awaited. You may write back to us at feedback@icicidirect.com. We urge to explore the site and uncover a wealth of trading opportunities. All the best and happy investing! Best regards, Vishal Gulechha Head - Equity Products ICICIdirect.com   To unsubscribe, please click here Disclaimer