Lever­age Trad­ing

Dalal Street Investment Journal - - EDITOR'S KEYBOARD -

In the lat­est is­sue of DSIJ (Oct 16-29), I read this in Ed­i­to­rial: “In­vest in tranches and do not in­dulge in lever­age trad­ing”. I did not un­der­stand this, es­pe­cially the “lever­age trad­ing” part. Can you help me to un­der­stand this? - Seshi Prasad Editor Re­sponds: We thank you for send­ing us your query. “In­vest in tranches” means that one should not in­vest all the money al­lo­cated for eq­uity in­vest­ment at one go. For ex­am­ple, if you have Rs 1,00,000 for in­vest­ing in eq­uity mar­kets, you may in­vest in four small tranches of Rs 25,000 each over the next 3 to 6 months. “Do not in­dulge in lever­age trad­ing” means one should not bor­row and in­vest or trade in equities. Hope you will fol­low our ad­vice and gain from it. Keep writ­ing to us.

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