Featured Video

The P/E Ratio

The What, How and Why of the P/E ratio in the context of Indian listed shares. The Price to Earnings Ratio is a way to value companies, instead of depending on purely their share prices. 

Deepak Shenoy talks about what the ratio is, how you can obtain it in India or calculate it yourself, and finally, why it is used. A quick introduction to the concept, and will be followed by more short takes on the P/E ratio's use.

(6 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)

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