Commodities can be traded as an asset class. They include goods like grains, metals, and energy products. Commodities tend to perform differently than stocks and bonds, with returns often moving inversely to equities. This makes them a useful diversifier for portfolios. Commodity derivatives markets allow investors to gain exposure to commodities through futures, options, and swaps contracts rather than direct ownership. These markets provide price information and a way to hedge risks related to commodity price volatility. Major geopolitical events in 2022 like Russia's invasion of Ukraine disrupted energy and grain supplies, significantly impacting commodity prices.
A derivative is a financial security with a value that is reliant upon or derived from an underlying asset or group of assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its price is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
Derivatives can either be traded over-the-counter (OTC) or on an exchange. OTC derivatives constitute the greater proportion of derivatives in existence and are unregulated, whereas derivatives traded on exchanges are standardized. OTC derivatives generally have greater risk for the counterparty than do standardized derivatives.
1) Derivatives are financial instruments whose value is derived from an underlying asset such as a commodity, currency, bond or stock. They allow for the transfer of risk from those who wish to avoid it to those who are willing to accept it.
2) Common types of derivatives include forwards, futures, options and swaps. Forwards involve a customized contract between two parties to buy or sell an asset at a future date. Futures are similar to forwards but are exchange-traded and standardized.
3) Derivatives allow businesses and individuals to hedge against risk, providing protection from adverse price movements. They also enable speculation by those seeking profit from price changes in the underlying asset.
This document provides an overview of derivatives markets and products. It discusses the origins and growth of derivatives, including the development of futures exchanges. The major types of derivatives are forwards, futures, options, warrants, and swaps. Forwards and futures involve an agreement to buy or sell an asset at a future date, while options provide the right but not obligation to buy or sell an asset. Swaps involve an exchange of cash flows between two counterparties. The document focuses on forwards and futures contracts in more detail, covering key differences, settlement procedures including physical delivery or cash settlement, and features such as customization and counterparty risk.
This document provides an overview of derivatives markets and products. It discusses the origins and growth of derivatives, including the development of futures exchanges. The major types of derivatives are forwards, futures, options, warrants, and swaps. Forwards and futures require delivery of the underlying asset, while options provide the right but not obligation to buy or sell. Key differences between forwards and futures are highlighted. Settlement can occur through physical delivery or cash settlement. Derivatives allow market participants to hedge risk and provide economic benefits if properly handled.
The document provides an overview of equity derivatives, including:
1) It defines derivatives and describes various types of derivative contracts such as forwards, futures, options, and swaps.
2) It discusses the growth of the derivatives market driven by factors like increased volatility, globalization, and technological advances.
3) It describes the roles of hedgers, speculators, and arbitrageurs in the derivatives market and the economic functions served by derivatives in price discovery, risk transfer, and market development.
4) It compares exchange-traded and over-the-counter (OTC) derivatives markets and some risks posed by OTC derivatives to financial stability.
5) It provides a
Derivatives are financial contracts whose value is based on an underlying asset such as a commodity, bond, currency or stock. They can be used for hedging risks from price movements, speculating on prices, or gaining exposure to markets. Common derivatives include forwards, futures, options, and swaps. Most are traded over-the-counter or on exchanges. Derivatives are one of the three main categories of financial instruments along with stocks and debt.
Introduction to Derivatives: Meaning of derivatives. Legal & Regulatory Environment, Types of derivatives. Derivative market – India, World. Reasons for trading derivatives, Derivative pricing, Difference between exchange traded and OTC derivatives.
Commodities can be anything for which there is demand and can be traded in commodities markets. They are divided into categories like grains, oil, livestock, metals and energy. Commodities are considered a separate asset class from stocks and bonds because their pricing is driven by different factors like supply and demand. Commodities are traded through exchanges using futures contracts which help reduce risks like counterparty risk and credit risk compared to forwards. Investors can participate in commodities markets as hedgers to reduce price risk, speculators to profit from price changes, or arbitrageurs seeking opportunities from pricing differences. Commodity indices track overall price movements and allow for derivative trading and easier investment compared to physical commodities.
A derivative is a financial security with a value that is reliant upon or derived from an underlying asset or group of assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its price is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
Derivatives can either be traded over-the-counter (OTC) or on an exchange. OTC derivatives constitute the greater proportion of derivatives in existence and are unregulated, whereas derivatives traded on exchanges are standardized. OTC derivatives generally have greater risk for the counterparty than do standardized derivatives.
1) Derivatives are financial instruments whose value is derived from an underlying asset such as a commodity, currency, bond or stock. They allow for the transfer of risk from those who wish to avoid it to those who are willing to accept it.
2) Common types of derivatives include forwards, futures, options and swaps. Forwards involve a customized contract between two parties to buy or sell an asset at a future date. Futures are similar to forwards but are exchange-traded and standardized.
3) Derivatives allow businesses and individuals to hedge against risk, providing protection from adverse price movements. They also enable speculation by those seeking profit from price changes in the underlying asset.
This document provides an overview of derivatives markets and products. It discusses the origins and growth of derivatives, including the development of futures exchanges. The major types of derivatives are forwards, futures, options, warrants, and swaps. Forwards and futures involve an agreement to buy or sell an asset at a future date, while options provide the right but not obligation to buy or sell an asset. Swaps involve an exchange of cash flows between two counterparties. The document focuses on forwards and futures contracts in more detail, covering key differences, settlement procedures including physical delivery or cash settlement, and features such as customization and counterparty risk.
This document provides an overview of derivatives markets and products. It discusses the origins and growth of derivatives, including the development of futures exchanges. The major types of derivatives are forwards, futures, options, warrants, and swaps. Forwards and futures require delivery of the underlying asset, while options provide the right but not obligation to buy or sell. Key differences between forwards and futures are highlighted. Settlement can occur through physical delivery or cash settlement. Derivatives allow market participants to hedge risk and provide economic benefits if properly handled.
The document provides an overview of equity derivatives, including:
1) It defines derivatives and describes various types of derivative contracts such as forwards, futures, options, and swaps.
2) It discusses the growth of the derivatives market driven by factors like increased volatility, globalization, and technological advances.
3) It describes the roles of hedgers, speculators, and arbitrageurs in the derivatives market and the economic functions served by derivatives in price discovery, risk transfer, and market development.
4) It compares exchange-traded and over-the-counter (OTC) derivatives markets and some risks posed by OTC derivatives to financial stability.
5) It provides a
Derivatives are financial contracts whose value is based on an underlying asset such as a commodity, bond, currency or stock. They can be used for hedging risks from price movements, speculating on prices, or gaining exposure to markets. Common derivatives include forwards, futures, options, and swaps. Most are traded over-the-counter or on exchanges. Derivatives are one of the three main categories of financial instruments along with stocks and debt.
Introduction to Derivatives: Meaning of derivatives. Legal & Regulatory Environment, Types of derivatives. Derivative market – India, World. Reasons for trading derivatives, Derivative pricing, Difference between exchange traded and OTC derivatives.
Commodities can be anything for which there is demand and can be traded in commodities markets. They are divided into categories like grains, oil, livestock, metals and energy. Commodities are considered a separate asset class from stocks and bonds because their pricing is driven by different factors like supply and demand. Commodities are traded through exchanges using futures contracts which help reduce risks like counterparty risk and credit risk compared to forwards. Investors can participate in commodities markets as hedgers to reduce price risk, speculators to profit from price changes, or arbitrageurs seeking opportunities from pricing differences. Commodity indices track overall price movements and allow for derivative trading and easier investment compared to physical commodities.
Derivatives are financial instruments whose value is derived from an underlying asset such as equity, foreign exchange, commodities, or other assets. The emergence of derivatives markets allows participants to transfer risks associated with price fluctuations. There are several types of derivatives including forwards, futures, options, and swaps. Participants in derivatives markets include hedgers seeking to reduce risk, speculators betting on price movements, and arbitrageurs looking to profit from pricing discrepancies. India's derivatives markets have grown since being established in 2000 and are regulated by the Securities and Exchange Board of India.
Introductory presentation on commodity tradingPradeep Sahoo
An introduction to Commodities Markets, Futures and other derivatives. Comparison of commodities with other asset classes and why commodity trading is indispensable for any country.
The document provides an overview of derivatives concepts, including the different types of derivatives contracts such as forwards, futures, swaps, and options. It discusses key terms like underlying assets, features of derivatives, and important concepts in options. The history of derivatives trading in India is covered, along with the regulatory framework and guidelines put forth by committees like the L.C. Gupta Committee and J.R. Verma Committee.
Derivatives are financial instruments whose value is derived from an underlying asset such as commodities, currencies, bonds or stocks. Forwards and futures are types of derivatives that allow parties to lock in prices for assets that will be delivered or settled for in the future. Forwards are private, bilateral contracts while futures are standardized contracts traded on an exchange with clearing houses that act as intermediaries, reducing counterparty risk. Key differences between forwards and futures include their level of standardization, margin requirements, market liquidity and mode of delivery or settlement.
1) Derivatives are financial contracts whose value is dependent on the behavior of an underlying asset such as a stock, index, commodity, interest rate, or currency. The two main types are futures and options.
2) Futures contracts are standardized exchange-traded contracts to buy or sell an asset at a predetermined price and date. Options contracts provide the right but not the obligation to buy or sell an asset at a predetermined strike price on or before expiration.
3) The binomial options pricing model is a numerical method used to value options using a discrete-time framework to model the varying price of the underlying asset over time. It can value American and Bermudan options and is more accurate than the
The document discusses various aspects of financial markets including money markets, capital markets, commodity markets, and their key components. It defines a financial market as a mechanism that allows people to trade financial securities, commodities, and other assets at low costs. Key segments of the financial market discussed include the money market, which involves short-term borrowing and lending; the capital market, which includes the stock and bond markets for raising long-term funds; and the commodity market, where agricultural and precious metals are traded. Participants in these markets include banks, corporations, investors, and traders.
The document defines and describes the key characteristics and functions of stock exchanges. It notes that stock exchanges are markets where securities like shares, bonds, and derivatives are traded based on supply and demand. The document outlines several important functions of stock exchanges such as facilitating long-term financing for companies and governments, aiding price discovery, spreading risk, and providing liquidity. It also discusses various types of securities like shares and bonds, as well as trading mechanisms including speculation, short-selling, and margin trading, noting some issues from an Islamic perspective. The conclusion advocates for Islamic stock exchanges that comply with Shariah and prohibit interest-based activities like conventional bonds, short-selling, and margin trading.
Introduction of foreign exchange market, characteristics,AbhishekSharma2611
This document provides an introduction to foreign exchange markets, including definitions, characteristics, functions, structure, and major participants. It defines foreign exchange markets as markets for buying and selling foreign currencies. It lists key characteristics like being a 24-hour global market with high liquidity and transparency. The major functions are facilitating international trade and payments through currency exchange and providing credit and hedging against currency risk. Participants include commercial banks, brokers, central banks, speculators, hedgers, and individual traders. The market has no central location and occurs over-the-counter between banks and other participants.
The document discusses various topics related to investment and financial markets including securities, derivatives, and debt and equity markets. It provides definitions and explanations of key concepts such as investment, securities, financial markets, money markets, primary markets, and secondary markets. It also summarizes the key functions of financial markets and stock exchanges, as well as regulations and requirements around securities listing, trading, and investor protection.
The document provides an introduction to equity derivatives, including futures and options. It discusses the basics of derivatives such as their definition, key types of derivative contracts including forwards, futures, options, and swaps. It also outlines the participants in derivatives markets, including hedgers, speculators, and arbitrageurs. Finally, it summarizes the process for becoming a member of the BSE (Bombay Stock Exchange) derivatives segment.
The derivatives market worth more than $516 trillion is experiencing a period of unwinding as worried investors pull out their cash. Several banks have reported major losses in the hundreds of millions to over a billion dollars from equity and currency derivatives. The unwinding or "Great Unwind" is a result of investors selecting higher risk investments in hopes of profiting from anticipated price movements but facing extraordinary losses when prices moved against them.
This document provides an introduction to commodity markets, including definitions of key terms like "commodity" and "commodity futures." It discusses the history and evolution of commodity markets, which began with trading of "rice tickets" in Japan and later developed into organized futures trading in Chicago in 1848. The document outlines the objectives and benefits of commodity futures markets, such as price discovery, price risk management, import/export competitiveness, and improved access to credit. Overall, it serves as a high-level overview of what commodity markets are and how they function.
The financial market refers to the marketplace where buyers and sellers engage in trading of various financial products like stocks, bonds, currencies and commodities. It acts as a medium for people and institutions with capital to invest and those who need capital to raise funds. Financial markets can be classified based on factors such as the type of financial claim, claim maturity, delivery timing, and organizational structure. Some key classifications include money markets, capital markets, stock markets, bond markets, foreign exchange markets and commodity markets. Financial markets play an important role in facilitating capital formation and allocation in modern economies.
Financial markets allow people and entities to trade securities, commodities, and other assets. They serve several functions including raising capital, transferring risk, facilitating price discovery and global transactions, and transferring liquidity. There are several types of financial markets including capital markets for stocks and bonds, commodity markets, money markets for short-term debt, derivatives markets for managing risk, futures markets for forward contracts, insurance markets, and foreign exchange markets. Within capital markets, primary markets involve new security issuances while secondary markets allow trading of existing securities. Money markets specifically involve short-term borrowing, lending, buying and selling of assets with original maturities of one year or less. Common money market instruments include certificates of deposit, commercial paper, and treas
Capital markets allow businesses and governments to raise long-term funds through securities like stocks and bonds. Financial innovation in capital markets includes new products, processes, and institutions. An important financial innovation is derivatives, which are securities whose value is based on underlying assets. Major types of derivatives markets are commodities, equities, interest rates, and currencies. Derivatives like futures, options, forwards, and swaps allow participants to transfer risks.
This document provides an overview of financial derivatives. It defines derivatives as instruments whose value is derived from an underlying asset. The four main types of derivatives are forwards, futures, options, and swaps. Derivatives allow parties to transfer risks related to price fluctuations and are used for hedging and speculative purposes. While derivatives pose risks, they also serve important economic functions like facilitating price discovery and transferring risk. Derivative markets in India operate through designated exchanges and are regulated by SEBI.
The document discusses the history and uses of derivatives in the financial markets. It begins by explaining that derivatives emerged as hedging devices against commodity price fluctuations, but now account for two-thirds of total transactions and include a variety of complex instruments. The scope of the study is on derivatives in the Indian context, specifically futures and options on two companies traded on the National Stock Exchange over one month. The objectives are to study the role of derivatives in Indian markets and analyze profits/losses of option holders. The methodology uses primary data from interviews and secondary data from publications and the internet. Derivatives are then defined as contracts deriving value from underlying assets, with the primary purpose of transferring risk between parties.
1) A derivative is a financial security whose value is based on an underlying asset such as a stock, bond, commodity, currency, interest rate, or market index. Common types of derivatives are forwards, futures, options, and swaps.
2) Forwards and futures are contracts that obligate the buyer and seller to perform the contract at a specified price on a future date. Options give the buyer the right but not the obligation to buy or sell the underlying asset. Swaps involve exchanging cash flows between two parties.
3) People use derivatives for hedging risk, speculation, and arbitrage opportunities between markets. Hedgers aim to protect investments, while speculators take risks to earn profits from
- Money market means market where money or its equivalent can be traded. Money is synonym of liquidity. Money market consists of financial institutions and dealers in money or credit who wish to generate liquidity. It is better known as a place where large institutions and government manage their short term cash needs. For generation of liquidity, short term borrowing and lending is done by these financial institutions and dealers. Hence, money market is a market where short term obligations such as treasury bills, commercial papers and bankers acceptances are bought and sold.
Derivatives are financial instruments that derive their value from an underlying asset such as stocks, bonds, commodities, currencies, interest rates, or market indexes. The three main types of derivatives are futures, options, and swaps. Derivatives allow participants to transfer risk from those who want to hedge it to those who are willing to take on risk for profit or speculation. Over the past few decades, derivatives markets have experienced tremendous growth due to factors like increased volatility, globalization of markets, improved technology, and sophisticated risk management tools. Derivatives serve important economic functions like facilitating price discovery, enabling risk transfer, increasing liquidity in underlying markets, and attracting entrepreneurial activity.
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
Dive into the steadfast world of the Taurus Zodiac Sign. Discover the grounded, stable, and logical nature of Taurus individuals, and explore their key personality traits, important dates, and horoscope insights. Learn how the determination and patience of the Taurus sign make them the rock-steady achievers and anchors of the zodiac.
Derivatives are financial instruments whose value is derived from an underlying asset such as equity, foreign exchange, commodities, or other assets. The emergence of derivatives markets allows participants to transfer risks associated with price fluctuations. There are several types of derivatives including forwards, futures, options, and swaps. Participants in derivatives markets include hedgers seeking to reduce risk, speculators betting on price movements, and arbitrageurs looking to profit from pricing discrepancies. India's derivatives markets have grown since being established in 2000 and are regulated by the Securities and Exchange Board of India.
Introductory presentation on commodity tradingPradeep Sahoo
An introduction to Commodities Markets, Futures and other derivatives. Comparison of commodities with other asset classes and why commodity trading is indispensable for any country.
The document provides an overview of derivatives concepts, including the different types of derivatives contracts such as forwards, futures, swaps, and options. It discusses key terms like underlying assets, features of derivatives, and important concepts in options. The history of derivatives trading in India is covered, along with the regulatory framework and guidelines put forth by committees like the L.C. Gupta Committee and J.R. Verma Committee.
Derivatives are financial instruments whose value is derived from an underlying asset such as commodities, currencies, bonds or stocks. Forwards and futures are types of derivatives that allow parties to lock in prices for assets that will be delivered or settled for in the future. Forwards are private, bilateral contracts while futures are standardized contracts traded on an exchange with clearing houses that act as intermediaries, reducing counterparty risk. Key differences between forwards and futures include their level of standardization, margin requirements, market liquidity and mode of delivery or settlement.
1) Derivatives are financial contracts whose value is dependent on the behavior of an underlying asset such as a stock, index, commodity, interest rate, or currency. The two main types are futures and options.
2) Futures contracts are standardized exchange-traded contracts to buy or sell an asset at a predetermined price and date. Options contracts provide the right but not the obligation to buy or sell an asset at a predetermined strike price on or before expiration.
3) The binomial options pricing model is a numerical method used to value options using a discrete-time framework to model the varying price of the underlying asset over time. It can value American and Bermudan options and is more accurate than the
The document discusses various aspects of financial markets including money markets, capital markets, commodity markets, and their key components. It defines a financial market as a mechanism that allows people to trade financial securities, commodities, and other assets at low costs. Key segments of the financial market discussed include the money market, which involves short-term borrowing and lending; the capital market, which includes the stock and bond markets for raising long-term funds; and the commodity market, where agricultural and precious metals are traded. Participants in these markets include banks, corporations, investors, and traders.
The document defines and describes the key characteristics and functions of stock exchanges. It notes that stock exchanges are markets where securities like shares, bonds, and derivatives are traded based on supply and demand. The document outlines several important functions of stock exchanges such as facilitating long-term financing for companies and governments, aiding price discovery, spreading risk, and providing liquidity. It also discusses various types of securities like shares and bonds, as well as trading mechanisms including speculation, short-selling, and margin trading, noting some issues from an Islamic perspective. The conclusion advocates for Islamic stock exchanges that comply with Shariah and prohibit interest-based activities like conventional bonds, short-selling, and margin trading.
Introduction of foreign exchange market, characteristics,AbhishekSharma2611
This document provides an introduction to foreign exchange markets, including definitions, characteristics, functions, structure, and major participants. It defines foreign exchange markets as markets for buying and selling foreign currencies. It lists key characteristics like being a 24-hour global market with high liquidity and transparency. The major functions are facilitating international trade and payments through currency exchange and providing credit and hedging against currency risk. Participants include commercial banks, brokers, central banks, speculators, hedgers, and individual traders. The market has no central location and occurs over-the-counter between banks and other participants.
The document discusses various topics related to investment and financial markets including securities, derivatives, and debt and equity markets. It provides definitions and explanations of key concepts such as investment, securities, financial markets, money markets, primary markets, and secondary markets. It also summarizes the key functions of financial markets and stock exchanges, as well as regulations and requirements around securities listing, trading, and investor protection.
The document provides an introduction to equity derivatives, including futures and options. It discusses the basics of derivatives such as their definition, key types of derivative contracts including forwards, futures, options, and swaps. It also outlines the participants in derivatives markets, including hedgers, speculators, and arbitrageurs. Finally, it summarizes the process for becoming a member of the BSE (Bombay Stock Exchange) derivatives segment.
The derivatives market worth more than $516 trillion is experiencing a period of unwinding as worried investors pull out their cash. Several banks have reported major losses in the hundreds of millions to over a billion dollars from equity and currency derivatives. The unwinding or "Great Unwind" is a result of investors selecting higher risk investments in hopes of profiting from anticipated price movements but facing extraordinary losses when prices moved against them.
This document provides an introduction to commodity markets, including definitions of key terms like "commodity" and "commodity futures." It discusses the history and evolution of commodity markets, which began with trading of "rice tickets" in Japan and later developed into organized futures trading in Chicago in 1848. The document outlines the objectives and benefits of commodity futures markets, such as price discovery, price risk management, import/export competitiveness, and improved access to credit. Overall, it serves as a high-level overview of what commodity markets are and how they function.
The financial market refers to the marketplace where buyers and sellers engage in trading of various financial products like stocks, bonds, currencies and commodities. It acts as a medium for people and institutions with capital to invest and those who need capital to raise funds. Financial markets can be classified based on factors such as the type of financial claim, claim maturity, delivery timing, and organizational structure. Some key classifications include money markets, capital markets, stock markets, bond markets, foreign exchange markets and commodity markets. Financial markets play an important role in facilitating capital formation and allocation in modern economies.
Financial markets allow people and entities to trade securities, commodities, and other assets. They serve several functions including raising capital, transferring risk, facilitating price discovery and global transactions, and transferring liquidity. There are several types of financial markets including capital markets for stocks and bonds, commodity markets, money markets for short-term debt, derivatives markets for managing risk, futures markets for forward contracts, insurance markets, and foreign exchange markets. Within capital markets, primary markets involve new security issuances while secondary markets allow trading of existing securities. Money markets specifically involve short-term borrowing, lending, buying and selling of assets with original maturities of one year or less. Common money market instruments include certificates of deposit, commercial paper, and treas
Capital markets allow businesses and governments to raise long-term funds through securities like stocks and bonds. Financial innovation in capital markets includes new products, processes, and institutions. An important financial innovation is derivatives, which are securities whose value is based on underlying assets. Major types of derivatives markets are commodities, equities, interest rates, and currencies. Derivatives like futures, options, forwards, and swaps allow participants to transfer risks.
This document provides an overview of financial derivatives. It defines derivatives as instruments whose value is derived from an underlying asset. The four main types of derivatives are forwards, futures, options, and swaps. Derivatives allow parties to transfer risks related to price fluctuations and are used for hedging and speculative purposes. While derivatives pose risks, they also serve important economic functions like facilitating price discovery and transferring risk. Derivative markets in India operate through designated exchanges and are regulated by SEBI.
The document discusses the history and uses of derivatives in the financial markets. It begins by explaining that derivatives emerged as hedging devices against commodity price fluctuations, but now account for two-thirds of total transactions and include a variety of complex instruments. The scope of the study is on derivatives in the Indian context, specifically futures and options on two companies traded on the National Stock Exchange over one month. The objectives are to study the role of derivatives in Indian markets and analyze profits/losses of option holders. The methodology uses primary data from interviews and secondary data from publications and the internet. Derivatives are then defined as contracts deriving value from underlying assets, with the primary purpose of transferring risk between parties.
1) A derivative is a financial security whose value is based on an underlying asset such as a stock, bond, commodity, currency, interest rate, or market index. Common types of derivatives are forwards, futures, options, and swaps.
2) Forwards and futures are contracts that obligate the buyer and seller to perform the contract at a specified price on a future date. Options give the buyer the right but not the obligation to buy or sell the underlying asset. Swaps involve exchanging cash flows between two parties.
3) People use derivatives for hedging risk, speculation, and arbitrage opportunities between markets. Hedgers aim to protect investments, while speculators take risks to earn profits from
- Money market means market where money or its equivalent can be traded. Money is synonym of liquidity. Money market consists of financial institutions and dealers in money or credit who wish to generate liquidity. It is better known as a place where large institutions and government manage their short term cash needs. For generation of liquidity, short term borrowing and lending is done by these financial institutions and dealers. Hence, money market is a market where short term obligations such as treasury bills, commercial papers and bankers acceptances are bought and sold.
Derivatives are financial instruments that derive their value from an underlying asset such as stocks, bonds, commodities, currencies, interest rates, or market indexes. The three main types of derivatives are futures, options, and swaps. Derivatives allow participants to transfer risk from those who want to hedge it to those who are willing to take on risk for profit or speculation. Over the past few decades, derivatives markets have experienced tremendous growth due to factors like increased volatility, globalization of markets, improved technology, and sophisticated risk management tools. Derivatives serve important economic functions like facilitating price discovery, enabling risk transfer, increasing liquidity in underlying markets, and attracting entrepreneurial activity.
Part 2 Deep Dive: Navigating the 2024 Slowdownjeffkluth1
Introduction
The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
Dive into the steadfast world of the Taurus Zodiac Sign. Discover the grounded, stable, and logical nature of Taurus individuals, and explore their key personality traits, important dates, and horoscope insights. Learn how the determination and patience of the Taurus sign make them the rock-steady achievers and anchors of the zodiac.
The Most Inspiring Entrepreneurs to Follow in 2024.pdfthesiliconleaders
In a world where the potential of youth innovation remains vastly untouched, there emerges a guiding light in the form of Norm Goldstein, the Founder and CEO of EduNetwork Partners. His dedication to this cause has earned him recognition as a Congressional Leadership Award recipient.
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...my Pandit
Explore the fascinating world of the Gemini Zodiac Sign. Discover the unique personality traits, key dates, and horoscope insights of Gemini individuals. Learn how their sociable, communicative nature and boundless curiosity make them the dynamic explorers of the zodiac. Dive into the duality of the Gemini sign and understand their intellectual and adventurous spirit.
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This presentation is a curated compilation of PowerPoint diagrams and templates designed to illustrate 20 different digital transformation frameworks and models. These frameworks are based on recent industry trends and best practices, ensuring that the content remains relevant and up-to-date.
Key highlights include Microsoft's Digital Transformation Framework, which focuses on driving innovation and efficiency, and McKinsey's Ten Guiding Principles, which provide strategic insights for successful digital transformation. Additionally, Forrester's framework emphasizes enhancing customer experiences and modernizing IT infrastructure, while IDC's MaturityScape helps assess and develop organizational digital maturity. MIT's framework explores cutting-edge strategies for achieving digital success.
These materials are perfect for enhancing your business or classroom presentations, offering visual aids to supplement your insights. Please note that while comprehensive, these slides are intended as supplementary resources and may not be complete for standalone instructional purposes.
Frameworks/Models included:
Microsoft’s Digital Transformation Framework
McKinsey’s Ten Guiding Principles of Digital Transformation
Forrester’s Digital Transformation Framework
IDC’s Digital Transformation MaturityScape
MIT’s Digital Transformation Framework
Gartner’s Digital Transformation Framework
Accenture’s Digital Strategy & Enterprise Frameworks
Deloitte’s Digital Industrial Transformation Framework
Capgemini’s Digital Transformation Framework
PwC’s Digital Transformation Framework
Cisco’s Digital Transformation Framework
Cognizant’s Digital Transformation Framework
DXC Technology’s Digital Transformation Framework
The BCG Strategy Palette
McKinsey’s Digital Transformation Framework
Digital Transformation Compass
Four Levels of Digital Maturity
Design Thinking Framework
Business Model Canvas
Customer Journey Map
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
Each framework is presented with visually engaging diagrams and templates, ensuring the content is both informative and appealing. While this compilation is thorough, please note that the slides are intended as supplementary resources and may not be sufficient for standalone instructional purposes.
This compilation is ideal for anyone looking to enhance their understanding of innovation management and drive meaningful change within their organization. Whether you aim to improve product development processes, enhance customer experiences, or drive digital transformation, these frameworks offer valuable insights and tools to help you achieve your goals.
INCLUDED FRAMEWORKS/MODELS:
1. Stanford’s Design Thinking
2. IDEO’s Human-Centered Design
3. Strategyzer’s Business Model Innovation
4. Lean Startup Methodology
5. Agile Innovation Framework
6. Doblin’s Ten Types of Innovation
7. McKinsey’s Three Horizons of Growth
8. Customer Journey Map
9. Christensen’s Disruptive Innovation Theory
10. Blue Ocean Strategy
11. Strategyn’s Jobs-To-Be-Done (JTBD) Framework with Job Map
12. Design Sprint Framework
13. The Double Diamond
14. Lean Six Sigma DMAIC
15. TRIZ Problem-Solving Framework
16. Edward de Bono’s Six Thinking Hats
17. Stage-Gate Model
18. Toyota’s Six Steps of Kaizen
19. Microsoft’s Digital Transformation Framework
20. Design for Six Sigma (DFSS)
To download this presentation, visit:
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HOW TO START UP A COMPANY A STEP-BY-STEP GUIDE.pdf46adnanshahzad
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Commodities Market.docx
1. Commodities Market
6. Commodities as a new asset class
An asset class is a collection of securities, manifesting comparable traits and goes through similar market
fluctuations. Similar legalities almost always bind securities in one asset class. Risk factors, taxation,
return rates, liquidity, tenures and market volatility differ according to asset classes. Hence, investors
often rely on asset category diversification to earn maximum returns with minimal costs.
Commodities can be anything ranging from goods, properties or products that can be traded for
different purposes. Gold, silver, bronze, food crops, petroleum, etc. are some examples of commodities
under the asset class, and the market undercurrents vary for each. The price can rise or fall as per the
demand. Merchandises are not meant for long-term investments unless it is gold or silver. Just buy
when the prices are down and sell when the prices go up.
Commodities are a distinct asset class with returns that are largely independent of stock and bond
returns. Therefore, adding broad commodity exposure can help diversify a portfolio of stocks and bonds,
potentially lowering the risk of an overall portfolio and boosting returns. Given their impact on
consumer goods prices, commodities can also offer a hedge against inflation. It is historically seen that
the commodities and other asset classes such as equities and bonds carry an inverse correlation. This
characteristic will give an opportunity for investors to have commodities in their portfolio and make
their portfolio a balanced one.
Investment in commodities gives three benefits to an investor such as hedge against inflation,
diversification with other asset classes, and return potential which is independent of equities and bonds.
Since commodities are real assets, they tend to react to changing economic fundamentals in different
ways than stocks and bonds, which are financial assets. Commodities tend to benefit from rising
inflation as the rising price of commodities tends to rise in inflation. On the other hand, rising inflation
pressurizes the equities market. Stocks and bonds perform better when the rate of inflation is stable or
slowing.
7. Design of a commodities derivative market
1. Meaning of Commodity Derivative Market: Commodity Derivative is Market is a place, where the
investor can directly incest in Commodities, rather than investing in those companies that trade in these
commodities. In other words, Commodity Derivative markets are the market, where the trade is
undertaken through a future/options/swap contracts. Under these contracts, as the name suggest,
transaction is completed at a future date.
Commodity Derivatives markets are a good source of critical information and indicator of market
sentiments. Since, commodities are frequently used as input in the production of goods or services,
uncertainty and volatility in commodity prices and raw materials makes the business environment
erratic, unpredictable and subject to unforeseeable risks.
2. Commodity Derivative Contract: A derivative contract, which has a commodity as its underlying, is
known as a ‘commodity derivatives’ contract. According to clause (bc) of section 2 of the SCRA,
commodity derivative” means a contract: (i) for the delivery of such goods, as may be notified by the
2. Central Government in the Official Gazette, and which is not a ready delivery contract; or (ii) for
differences, which derives its value from prices or indices of prices of such underlying goods or activities,
services, rights, interests and events, as may be notified by the Central Government, in consultation with
the Board, but does not include securities as referred to in sub-clauses (A) and (B) in the definition of
Derivatives.
3. Types of Derivative Contracts: There are 4 types of derivative contracts are involved in the commodity
market : √ Forwards – Private agreements where the buyer commits to buy, and the seller commits to
sell. √ Futures – Standardized forms of forwards that trade on exchanges. √ Options – Give the holder
the right to buy or sell the underlying asset on a fixed date in the future. √ Swaps – Contracts through
which two parties exchange streams of cash flows.
4. Trading Mechanism: In this market, the Commodity Derivative Trading is done by people who have
no need for the Commodity itself, but who first speculate on the direction of the Price of these
commodities, hoping to gain if the Price movement is in their favour.
5. Settlement: The most vital function in a Commodity Derivatives Market is the settlement and clearing
of trades. Commodity Derivatives can involve the exchange of funds and goods. There are separate
bodies to handle all the settlements, known as Clearing House. Example: The holder of a Future Contract
to buy Gold might choose to take delivery of Gold rather than closing his position before maturity. The
function of Clearing House, in such a case, is to take care of possible problems of default by the other
party involved, by standardizing and simplifying transaction processing between participants and the
organization.
6. Need for Commodity Derivative Market
There are two types of needs for Commodity Derivative Market, such as; (a) Instrumental Needs:
Hedgers needs for price risk reduction are called as Instrumental Needs. Their main requirement is to
reduce or eliminate Portfolio Risk at a Low Cost. (b) Convenient Needs: The other aspects that are to be
considered are flexibility in doing business, easy access to the market, and an efficient clearing system.
These are called Convenience Needs. It deals with Customer’s need to able to use the services provided
by the Exchange with ease. The extent of satisfaction of convenience needs determines the Process
Quality. 7. Features of Commodity Derivative Markets The followings are the features of commodity
Derivative Market; (a) Complement to investment in Companies that use commodities. (b) Defines
pattern of Country’s Production and Consumption. (c) Gains are in the forms of Price increases, not
dividends.
8. Issues related to trading in commodity market
Cash:
Many commodities traders rely on cash a lot longer than needed. We see large or relatively
established traders recycling their own funds, as they have not explored the various
solutions on the market. Much of this is due to distrust and perceived slow speed.
Inadequate banks:
3. Sometimes large banks or funders are inadequate in addressing the needs of certain clients.
While another funder may be more than happy to quickly amend facilities and increase limit
sizes. This reason for this mismatch mainly focuses on working with the right person and
understanding both the lender and borrower’s requirements. This includes security, products
and cycles. This is always changing.
False Truths:
We were recently with a large bank that told us they were financing in the way it had to be.
This was simply incorrect, by understanding the way other large funders and alternative
financiers may look at facilities; it is possible to explain and restructure facilities.
Wrong Leverage:
Due to larger companies having relatively opaque funding structures, it is not always
understood how a facility should look and what funding level is appropriate. Sometimes this
may be lead by new bank policy or relationship managers at banks who do not want to push
the boundaries.
Poor Structure:
Sometimes the wrong facilities are used and certain elements are not known about. This is
due to funders providing the wrong solutions and a business not having long-term plans in
place. There may be trades that a company use their own cash for, which can fit into a
facility. There may also be no pre-export finance facilities used, alternative repo structures or
receivables finance wrongly utilised when an alternative structure could be more beneficial.
Unnecessary security:
Security is sometimes asked for when it shouldn’t be; this can be negotiated out of and used
in various ways. By providing security when not necessary, this could be disadvantageous in
the long run.
Poor jurisdictions:
It may be easy for certain companies to set up in more favourable jurisdictions or trade with
alternative countries. This may be advantageous when looking at the companies’ long-term
growth.
Being a burden:
4. The funder and client relationship should be one of partnership in growth as it is in both of
their interests to make this work. It is too often thought of as a struggle where difficulty is
often found.
9. Relation between crude oil and gold
Gold-oil ratio determines the number of barrels of oil to buy with an ounce of gold. It means that the
higher the ratio, cheaper the oil and the greater the purchasing power of gold. Currently (Jan 30th) an
ounce of gold will get you 30 barrels of crude oil.
Oil is often considered the leader in commodity markets, where a change in oil price affects the prices of
other commodities, including that of gold. This implies that changes in the gold price may be monitored
by observing movements in the oil price, through several factors.
In order to disperse market risk and maintain commodity value, dominant oil-exporting countries use
high revenues from oil sales to invest in gold. Since several countries including oil producers retain gold
as an asset in their international reserve portfolios, rising oil prices (and hence oil revenues) may have
implications for increases in gold prices. This holds true as long as gold accounts for a significant portion
of the asset portfolio of oil exporters and if these exporters purchase gold in line with their rising oil
revenues. Therefore, the expansion of oil revenues enhances gold market investment, and this causes
oil price and gold price levels to trend upward together. In such a scenario, an oil price increase leads to
a rise in demand for (and hence the price of) gold.
inflation seems to be the most common channel for explaining the relationship between oil and gold
markets. According to this, a rise in crude-oil prices leads to an increase in the general price level.
When the general price level goes up, the price of gold, which is also a good, will increase. This gives rise
to the role of gold as an instrument to hedge against inflation, and gold is indeed renowned as an
effective tool in this regard. Hence, inflation, which is strengthened by high oil prices, causes an increase
in demand for gold and thus leads to a rise in the gold price.
10. Major geopolitical changes events in 2022 which affected commodities
market.