EQUITY MARKETThe market in which shares are issued andtraded, either through exchanges Also known as thestock market, it is one of the most vital areas of amarket economy because it gives companies accessto capital and investors a slice of ownership in acompany with the potential to realize gains basedon its future performance.There are two types of equity market : Primary marketSecondary market
Primary market:It deals with new securities issued for the first time. securities are not issued directly to the public but are offeredfor sale through intermediaries like issuing houses or stockbrokers. Raise more capital by public issues.Rights issue privilege given to existing share holders first .Secondary market:A market where investors purchase securities or assetsfrom other investors, rather than from issuing companiesthemselves. The national exchanges - such as the NewYork Stock Exchange and the NASDAQ are secondarymarkets.
DERIVATIVES MARKETA security whose price is dependent uponor derived from one or more underlyingassets. Derivatives are generally usedas an instrument to hedge risk, but canalso be used for speculative purposes.There are two types :1. Futures2. options
DERIVATIVES MARKETOPTIONS: Call option is to buy but not the obligation. Put option is to sell but not he obligation.Naked selling is the main difference between futures andoptions.Strike price, Current price, Intrinsic value, Time valueIntrinsic value = current price – strike price
BENEFITS OF EQUITY MARKET1.Taxes are being saved.2.Flexibility .3.Diversification of risk.4.Creating asset for future generation .5.Transparent market.6.Small amount can be invested.
GOLD MARKETThis is perhaps the best-known form of direct gold ownership.Many people think of gold bullion as the large gold bars .Actually, gold bullion is any form of pure, or nearly pure, goldthat has been certified for its weight and purity. This includescoins, bars, etc.,There are three factors which affect gold market:1. Dollars and rupees rates fluctuation.2. Seasonal demand of gold.3. Policies of central banks.