Derivative:
Derivative is product whose value is derived from the value of one or more basic variables of underlying asset.
Derivative is product whose value is derived from the value of one or more basic variables of underlying asset.
Forwards:
A forward contract is customized contracts between two entities were settlement takes place on a specific date in the future at today’s pre agreed price.
A forward contract is customized contracts between two entities were settlement takes place on a specific date in the future at today’s pre agreed price.
Futures:
A future contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Future contracts are standardized exchange traded contracts.
A future contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Future contracts are standardized exchange traded contracts.
Options:
An option gives the holder of the option the right to do some thing. The option holder option may exercise or not.
An option gives the holder of the option the right to do some thing. The option holder option may exercise or not.
Call option:
A call option gives the holder the right but not the obligation to buy an asset by a certain date for a certain price.
A call option gives the holder the right but not the obligation to buy an asset by a certain date for a certain price.
Put option:
A put option gives the holder the right but not obligation to sell an asset by a certain date for a certain price.
A put option gives the holder the right but not obligation to sell an asset by a certain date for a certain price.
Option price:
Option price is the price which the option buyer pays to the option seller. It is also referred to as the option premium.
Option price is the price which the option buyer pays to the option seller. It is also referred to as the option premium.
Expiration date:
The date which is specified in the option contract is called expiration date.
The date which is specified in the option contract is called expiration date.
European option:
It is the option at exercised only on expiration date it self.
It is the option at exercised only on expiration date it self.
Basis:
Basis means future price minus spot price.
Basis means future price minus spot price.
Cost of carry:
The relation between future prices and spot prices can be summarized in terms of what is known as cost of carry.
The relation between future prices and spot prices can be summarized in terms of what is known as cost of carry.
Initial margin:
The amount that must be deposited in the margin a/c at the time of first entered into future contract is known as initial margin.
The amount that must be deposited in the margin a/c at the time of first entered into future contract is known as initial margin.
Maintenance margin:
This is some what lower than initial margin.
This is some what lower than initial margin.
Mark to market:
In future market, at the end of the each trading day, the margin a/c is adjusted to reflect the investors’ gains or loss depending upon the futures selling price. This is called mark to market.
In future market, at the end of the each trading day, the margin a/c is adjusted to reflect the investors’ gains or loss depending upon the futures selling price. This is called mark to market.
Baskets :
Basket options are options on portfolio of underlying asset.
Basket options are options on portfolio of underlying asset.
Swaps:
Swaps are private agreements between two parties to exchange cash flows in the future according to a pre agreed formula.
Swaps are private agreements between two parties to exchange cash flows in the future according to a pre agreed formula.
Impact cost:
Impact cost is cost it is measure of liquidity of the market. It reflects the costs faced when actually trading in index.
Impact cost is cost it is measure of liquidity of the market. It reflects the costs faced when actually trading in index.
Hedging:
Hedging means minimize the risk.
Hedging means minimize the risk.
Capital market:
Capital market is the market it deals with the long term investment funds. It consists of two markets 1.primary market 2.secondary market.
Capital market is the market it deals with the long term investment funds. It consists of two markets 1.primary market 2.secondary market.
Primary market:
Those companies which are issuing new shares in this market. It is also called new issue market.
Those companies which are issuing new shares in this market. It is also called new issue market.
Secondary market:
Secondary market is the market where shares buying and selling. In India secondary market is called stock exchange.
Secondary market is the market where shares buying and selling. In India secondary market is called stock exchange.
Arbitrage:
It means purchase and sale of securities in different markets in order to profit
It means purchase and sale of securities in different markets in order to profit
from price discrepancies. In other words arbitrage is a way of reducing risk of loss caused by price fluctuations of securities held in a portfolio.
Meaning of ratio:
Ratios are relationships expressed in mathematical terms between figures which are connected with each other in same manner.
Ratios are relationships expressed in mathematical terms between figures which are connected with each other in same manner.
Activity ratio:
It is a measure of the level of activity attained over a period.
It is a measure of the level of activity attained over a period.
No comments:
Post a Comment