1. MEANING OF VOLATILITY
DEFINITION
TYPES
MEANING OF INDEX
VOLATILITY INDEX(VIX)
FUNCTION
INDIA (VIX)
HOW IT WORKS
ISSUE OF CAPITAL AND ITS NATURE
TYPES OF SHARE CAPITAL
DISCLOSURE REQUIREMENTS
CONCLUSION
REFERENCES
2. Volatility deals with how fast prices move.
In other words, volatility refers to the amount of uncertainty or risk about
the size of changes in a security's value. A higher volatility means that
a security's value can potentially be spread out over a larger range
of values. This means that the price of the security can change
dramatically over a short time period in either direction.
A lower volatility means that a security's value does not fluctuate
dramatically, but changes in value at a steady pace over a period of time.
3. Volatility, in relation to investing, is an expression of a range of
returns for a particular investment, such as a stock, bond or
mutual fund, or for a particular asset type, sector, or category
of investment type. In simple terms, the volatility of an
investment is an expression that refers to the "up and down"
movements of either its price or of its return.
Definition:
4. PRICE VOLATILITY
A price series or an economic indicator that changes a lot and
swings wildly is said to be “price volatility.”
STOCK MARKET VOLATILITY
When the stock market goes up one day, and then goes down
for the next five, then up again, and then down again, that’s
what you call stock market volatility.
5. HISTORICAL
VOLATILITY
As its name suggests, historical volatility is how much
volatility a stock has had over the past 12 months.
Historical Volatility (HV)
6. Option's
Premium
Expected
Movement of IV
in the future
Advantage in trading
Option's IV is at
high level
High Price IV is likely to fall.
Sellers of the option have the
advantage.
Option's IV is at
low level
Low Price IV likely to rise.
Buyers of the option have the
advantage.
Implied volatility describes how much volatility that options traders think the
stock will have in the future
IMPLIED VOLATILITY
7. Volatility can be measured in two ways. Implied volatility which is
forward looking, reflects the volatility of the underlying asset given its
markets option price. The other way is that of historical volatility which
is backward looking. This type of volatility is derived by estimating
volatility using historical market data.
Volatility is measured by the Chicago Board of Options
Exchange (CBOE).
8. A statistical measure of change in an economy or a securities
market. In the case of financial markets, an index is an
imaginary portfolio of securities representing a particular
market or a portion of it. Each index has its own calculation
methodology and is usually expressed in terms of a change
from a base value. Thus, the percentage change is more
important than the actual numeric value.
DEFINITION
9.
10.
11. A low volatility index is therefore associated with price rise.
But when the volatility is greater than 30%, then the market is
in the fear zone .Thus it is also called as FEAR INDEX.
A high volatility index is associated with a fall in market price.
In this manner, a volatility index helps investors gauge the mood
of the market.
12.
13.
14.
15. Capital issue means stock or Bonds issued by a corporation or
Govt.
In other words , issued share capital is the total of a company’s
shares that are held by shareholders. A company can, at any time,
issue new shares up to the full amount of authorised share capital
Also called as subscribed capital, or subscribed share capital.
16. • Issued (share) capital is the amount of nominal value of shares held by
the shareholders. It is the face value of the shares that have been issued
to the shareholders. Issue share capital and share premium represent
the amount invested by the shareholders in the company. It is also
known as subscribed share capital.
• Issue capital is the capital which has been issued to the shareholders
and which still outstands. The shares which have been redeemed or
repurchased by the company for holding them in treasury are not a part
of the issued share capital.
• Previously issued capital comprised common equity shares as well as
preferred shares.
But now only irredeemable preferred shares can be shown as part of
issued share capital.
17. • Share capital of a company can change. Some companies issue new
shares to the existing shareholders or new shareholders. These
additional shares increase the value of issued share capital.
• It should be kept in mind that issued share capital is not affected by
the market price of shares.
• The value of issued capital presented in the financial statements is
simply the number of issued shares multiplied by the face value of each
shares.
• Share capital can be different from authorised share capital.
Authorised share capital is the maximum amount of equity capital that a
company can issue to the shareholders. The issued capital can can be
less than the authorised share capital but it cannot be more than it.
• It consists of the shares that have been sold to the shareholders
against cash or some other consideration.
18. Authorised share capital
It is also called as registered capital. It is the total of the shares capital which a limited
company is allowed (authorised) to issue. It presents the upper boundary for the actually
issued share capital.
Shares authorised = Shares issued + Shares unissued
Subscribed capital
It is the portion of the issued capital, which has been subscribed by all the investors
including public.
Issued capital
The amount of capital (out of subscribed capital) which has been issued by the company to
the subscribers and thus are now shareholders.
Called up share capital
It is the portion of the issued capital for which the shareholders are required to pay. This
may be less than the subscribed capital as the company may ask shareholders to pay by
instalments.
