The document discusses derivatives markets in Nepal. It defines different types of derivatives like futures, options, swaps and forwards. It describes the key parties involved in derivatives trading like clients, brokers, and clearing houses. It provides an overview of the history and development of derivatives exchanges in Nepal. Some challenges of the Nepalese derivatives market mentioned include lack of regulation, expertise and awareness.
Financial markets and their impact on economyShivkumar Menon
Financial Markets - This deck captures the movement of Money markets and Capital Markets, its impact on different stakeholders viz. Individuals, businesses, markets and the economy
An investor is a person who allocates capital with the expectation of a future financial return. Types of investment include : equity , debt securities , real estates, currency , and commodity , derivatives such as put and call options, etc,
Players of Money Market and Capital Market Pawel Gautam
financial market , functions of financial market , Characteristics Of Financial Markets, What Is Money Market ,Structure of Indian Money ₹ Market ,Functions of Money Markets,Players Of Money Market, Capital Market , Types of Capital Market , Structure of Indian Capital Market , Functions of Capital Market , Constituents/Components of Capital Markets, PLAYERS OF CAPITAL MARKET
Markets for buying and selling equity and debt instruments. Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors, and users of capital like businesses, government and individuals
This presentations chalks out in detail information about ALM in Indian Bank. It starts with the basics of Balance sheet; applicability of ALM in real life; Evolution and then starts with main topics of ALM like structured statement; Liquidity risk, its management; currency risk and finally ends with Interest Risk management.
Links to Video’s in the ppt
Balance Sheet
http://www.investopedia.com/terms/b/balancesheet.asp
NII/NIM
http://www.investopedia.com/terms/n/netinterestmargin.asp
www.abhijeetdeshmukh.com
Definition of Stock Exchange : The securities regulation act of 1956 defined stock exchange as “an association , organization , or a individual which is established for for the purpose of assisting , regulating , and controlling business in buying ,selling and dealing in securities.”
Financial markets and their impact on economyShivkumar Menon
Financial Markets - This deck captures the movement of Money markets and Capital Markets, its impact on different stakeholders viz. Individuals, businesses, markets and the economy
An investor is a person who allocates capital with the expectation of a future financial return. Types of investment include : equity , debt securities , real estates, currency , and commodity , derivatives such as put and call options, etc,
Players of Money Market and Capital Market Pawel Gautam
financial market , functions of financial market , Characteristics Of Financial Markets, What Is Money Market ,Structure of Indian Money ₹ Market ,Functions of Money Markets,Players Of Money Market, Capital Market , Types of Capital Market , Structure of Indian Capital Market , Functions of Capital Market , Constituents/Components of Capital Markets, PLAYERS OF CAPITAL MARKET
Markets for buying and selling equity and debt instruments. Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors, and users of capital like businesses, government and individuals
This presentations chalks out in detail information about ALM in Indian Bank. It starts with the basics of Balance sheet; applicability of ALM in real life; Evolution and then starts with main topics of ALM like structured statement; Liquidity risk, its management; currency risk and finally ends with Interest Risk management.
Links to Video’s in the ppt
Balance Sheet
http://www.investopedia.com/terms/b/balancesheet.asp
NII/NIM
http://www.investopedia.com/terms/n/netinterestmargin.asp
www.abhijeetdeshmukh.com
Definition of Stock Exchange : The securities regulation act of 1956 defined stock exchange as “an association , organization , or a individual which is established for for the purpose of assisting , regulating , and controlling business in buying ,selling and dealing in securities.”
Describes what derivatives are and explains the differences between over-the-counter and exchange-traded
derivatives, Identify types of underlying assets on which derivatives are based, describes the participants in and use of derivative trading, describes what options are and how they are traded, and evaluate call and put option strategies for
individual and institutional investors and corporations.
5. Describe what forwards are, distinguish futures contracts from forward agreements, and evaluate
futures strategies for investors and corporations, define and describe rights and warrants, explaining why they are issued,
Describes what derivatives are and explains the differences between over-the-counter and exchange traded derivatives, Identifies types of underlying assets on which derivatives are based, describes participants in and uses of derivative trading, describe what options are and how they are traded, evaluates call and put option strategies for
individual and in-stitutional investors and corporations, describes what forwards are, distinguishing futures contracts from forward agreements, evaluate futures strategies for investors and corporations, Define and describe rights and warrants, explain why they are issued, and calculate the value of rights and warrants
FUTURES MARKETS AND CENTRAL COUNTERPARTIES.pdfDPawanKumar
A Summary of Chapter 2 of the Book Options, Futures, and Other Derivatives by John Hull.
It Covers the below topics,
Specification Of A Futures Contract
Convergence Of Futures Price To Spot Price
The Operation Of Margin Accounts
OTC Markets
Market Quotes
Delivery
Types Of Traders And Orders
Regulation
Accounting And Tax
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.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
The Art Pastor's Guide to Sabbath | Steve ThomasonSteve Thomason
What is the purpose of the Sabbath Law in the Torah. It is interesting to compare how the context of the law shifts from Exodus to Deuteronomy. Who gets to rest, and why?
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
We all have good and bad thoughts from time to time and situation to situation. We are bombarded daily with spiraling thoughts(both negative and positive) creating all-consuming feel , making us difficult to manage with associated suffering. Good thoughts are like our Mob Signal (Positive thought) amidst noise(negative thought) in the atmosphere. Negative thoughts like noise outweigh positive thoughts. These thoughts often create unwanted confusion, trouble, stress and frustration in our mind as well as chaos in our physical world. Negative thoughts are also known as “distorted thinking”.
How to Create Map Views in the Odoo 17 ERPCeline George
The map views are useful for providing a geographical representation of data. They allow users to visualize and analyze the data in a more intuitive manner.
Ethnobotany and Ethnopharmacology:
Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
Bio-prospecting tools for drug discovery,
Role of Ethnopharmacology in drug evaluation,
Reverse Pharmacology.
How to Split Bills in the Odoo 17 POS ModuleCeline George
Bills have a main role in point of sale procedure. It will help to track sales, handling payments and giving receipts to customers. Bill splitting also has an important role in POS. For example, If some friends come together for dinner and if they want to divide the bill then it is possible by POS bill splitting. This slide will show how to split bills in odoo 17 POS.
ESC Beyond Borders _From EU to You_ InfoPack general.pdf
Derivative market in nepal
1. Group B:
Ritu Joshi
Sarita Maharjan
Ankur Shrestha
Krishna Chalise
Dipika Shrestha
Pawan Kawan
Sona Shrestha
2. Introduction
Derivatives are instruments which include:
a) Security derived from a debt instrument share, loan,
risk instrument or contract for differences of any
other form of security and,
b) A contract that derives its value from the price/index
of prices of underlying securities.
3. Types of Derivative Market
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.
Options : A contract that gives its buyer the right but
not obligation to buy or sell an asset at a fixed price
on or before a given date. An option to buy anything
is known as a CALL while an option to sell a thing is
called a PUT.
4. Cont..
Swaps : are private agreements between
two parties to exchange cash flows in the
future.
Forward : Customized contract between
two entities ,where settlement takes place
on a specific date in the future.
5. History of Derivative Market
As early as the 1650s, dealings resembling
present day derivative market transactions were
seen in rise markets in Osaka, Japan.
The first leap towards an organized derivatives
market came in 1848, when the Chicago Board
of Trade (CBOT), the largest derivative
exchange in the world, was established.
7. Parties involved….
Client/Investor:
Client or investor is the one who is ready to invest on
commodities of the derivative market and ready to bear the risk.
He is the person who needs to choose his broker carefully and
should have knowledge about the derivative market before having
entry in it.
Broker:
A derivatives broker is an investment professional who advises
individuals and corporations about how to buy, trade and sell
derivatives.
Brokers negotiate deals between entities for derivative swaps,
research international investment opportunities, counsel individual
investors, and analyze corporate asset portfolios to calculate how
much a company should risk in the derivatives market. His main
job is to present options to a client, help the client make a
decision on how to proceed and execute the final choice.
8. Contd………….
The broker's job is to work with a client to make an
appropriate investment plan and to provide investment tips.
Because the derivatives broker acts for the client in many
aspects of the investment process, it is very important that a
client choose a derivatives broker that he or she trusts and
works well with.
Clearing House:
It is an agency or separate corporation of a future
exchange responsible for settling trading
accounts, clearing trades, collecting and maintaining
margin money, regulating delivery and reporting trading
data.
9. Contd….
Clearing houses act as third parties to all futures
and option contracts - as a buyer to every clearing
member seller and a seller to every clearing
member buyer.
Each futures exchange has its own clearing house.
All members of an exchange are required to clear
their trades through the clearing house at the end of
each trading session and to deposit with the
clearing house a sum of money (based on
clearinghouse margin requirements) sufficient to
cover the member's debit balance.
11. BENEFITS OF THE DERIVATIVE
MARKET (OF NEPAL)
Farmers, traders, exporters, importers can
insure their risk from the fluctuating product
prices by taking futures position in the derivative
market.
Financial institutions can mitigate the interest
rate risk by locking their interest rate with
derivative exchange.
Investors can invest in the products and can get
attractive returns.
12. End users can buy the goods at a pre-
determined price.
Investors have the advantage to determine the
conditions of the contract they wish to enter,
develop tailor-made contracts, while they
secure a certain degree of confidentiality in
respect to their transactions.
15. CLEARING MEMBER
Dual Role of Clearing & Settlement(C&S) and Market Making as a
Market Maker(MM)
•Clearing & Settlement Role
Can introduce market maker, brokers, clients, and responsible for
administrative works (provide margin/ commission leverage, creating
client profile, Broker and Sub-broker creation, margin call, fund
transfer, offline support etc).
•Market Making Role
Provide frequent bid and ask quotes simultaneously with quantity
within the parameter set by the exchange.
Role Perform By Parties In Trading
16. – Broker
Plays a role to introduce sub-brokers /clients or can trade
on their own account.
• Providing advisory services to clients, training and
customer support etc.
17. Parties involve in commodity trading
MEX
CLEARING MEMBERS
NON CLEARING MEMBERS (Broker) MEMBERS
CLIENTS
BANKS
18. How to start trading
Trading commodities online is a simple process to
get started, but it is not something that should be
entered into lightly. The traditional method of
calling your commodity broker to place orders and
waiting for a callback to give you a filled order
price is quickly ending. Therefore, if you want to
trade commodities online, we will cover the
process of how to start.
19. Matching Principles
When orders and quotes are entered into the central order
book, they are sorted by , price and entry time. Market orders
are always given the highest priority for matching purposes.
Orders and quotes in the central order book are anonymous: A
trader never knows the opposite side on a trade executed
through the exchange. Orders and quotes at a given price level
are aggregated, although the number of orders and quotes
making up the total remains unknown. Participants only see
the specific details of their own orders.
For all products, the best bid and ask prices, as well as their
respective aggregated bid and offer sizes, are always available
in real time.
20. Trading Method
Most of the derivatives markets are fully automated electronic
exchange, where there is no physical trading floor. The Exchange is
controlled through a centralized platform which is connected with
different ‘client’ front-ends called MEXN Trader.
Initial Margin
The initial margin (IM) is levied on all open positions (Buy or sell
positions) of the Members and their clients. The IM calculation
on each commodity varies depending upon its market volatility.
The margin so calculated is reduced from the total margin of
the Member available with the exchange and accordingly
further exposure is given on the balance amount.
21. •Daily Price Limit
Daily price limit is the maximum and minimum level that
a price of any contract can reach for that particular day. It
is the maximum amount of gain or loss that can occur on
a particular contract/s. If a price of the contracts reaches
the daily price limit, trading on that contract shall be
suspended for certain time period or may be for the
remainder of the day. This is also called locked market.
•Trading session
The trading session in MEX Nepal is of 23 hours daily from
Monday morning to Saturday morning. Market opens at
03:45 on Monday morning and closes at 02:45 Saturday
morning during summer and during winter, the market
opens and closes one hour later.
22. Important Papers
You need to open a saving account in Bank
You must fill up Client Registration Form and
Member Client Agreement
Read Risk Disclosure Document
Identity Certificate and Address Prove.
Bank Statement Certificate
23. Drawbacks
Credit risk
Credit risk on account of default by counter party: This
is very low or almost zeros because the Exchange takes
on the responsibility for the performance of contracts
Market risk
Market risk is the risk of loss on account of adverse
movement of price.
Liquidity risk
Liquidity risks are the risk that unwinding of
transactions may be difficult, if the market is illiquid.
24. Legal risk
Legal risk is that legal objections might be raised;
regulatory framework might not allow some
activities.
Operational risk
Operational risk is the risk arising out of some
operational difficulties like, failure of electricity,
due to which it becomes difficult to operate in the
market.
25. Disadvantages
Raises Volatility: Derivatives require a small initial
capital due to leveraging derivatives provide, therefore
a large no. of market participants can take part in
derivatives which leads to speculation and raises
volatility in the markets.
Higher no. of Bankruptcies: Due to the existence of
leveraged in derivatives, participants assume positions
which do not match their financial capabilities and
eventually lead to bankruptcies.
Increased need of regulation: There a Large no. of
participants who take speculative positions. It is
necessary to stop these activities and prevent people
from getting bankrupt and to stop the chain of defaults.
26. Regulations
No regulatory body for derivative market.
SEBON has authorized to control derivative market
but not able to regulate it.
Due to lack of expert in Ministry of Finance and
other regulated bodies, there is no proper laws.
Still derivative market is existed with huge
transaction
27. The Present Situation of Derivative
Market in Nepal
The Nepalese Derivative Market is very young.
The investors haven’t been able to analyze the
situation properly.
Nepal has only a recent history of derivative
market, which opened with COMEN at the end
of 2006
MEX was established in 2007 and NDEX on
November 20, 2008.
28. There is no regulating body in the Nepalese derivative
market.
Over 90 percent people want to invest in gold and
crude oil
Recently MEX and NSE has been merged to grab the
new opportunities in the market.
After merger MEX has now 120 brokers from 90
brokers earlier.
MEX is the leading derivative market in Nepal
according to trading volume and trading size.
Software used are MT4, MT5, KAAP, Hybrid Solution,
etc.
There are altogether 7 derivative exchange in Nepal.
29. List of Derivative Exchange in
Nepal
1) Commodity and Metal Exchange Nepal
Limited (COMEN) (2006)
2) Mercantile Exchange Nepal Limited(MEX)
(2007)
3) Nepal Derivative Exchange Limited(NDEX)
(2008)
4) Nepal Spot Exchange Limited(NSE) (2010)
5) Wealth Exchange Limited (WEX) (2011)
6) National Spot Exchange Limited(NSX)
7) Commodity Future Exchange Nepal
30. Problems in Nepal
No experts to regulate derivative market.
No regulatory authority.
Lack of awareness among public.
31. Conclusion
• The derivatives market is very dynamic and quickly developed into
the most important segment of the financial market
• All in all the derivatives market in Nepal does not have a
longer history and thus seems to be still underdeveloped
• Derivatives play an important role in the economy but are
associated with certain risks.
• The crisis has highlighted that these risks are not sufficiently
mitigated in the over-the-counter (OTC) part of the market,
especially as regards credit default swaps (CDS). Since the
beginning of the financial crisis, the Commission has been
working to address these risks.
32. Cont………
The derivatives market functions very well and is constantly
improving. The imperatives for a well functioning market are clear
fulfilled:
The exchange segment in particular has put in place very effective
risk mitigation mechanisms mostly through the use of automation
For its user, the derivatives market is highly effective transaction
costs for exchange traded derivatives are particular low.
The derivatives market needs to focus on variety of commodities
that can manage the risks of that particular commodity
Derivative trading is an excellent way to prove money earns money.
It will make our investment portfolio more attractive and secure. It
offers a wide range of alternatives, including international
opportunities. This is the best way to utilize our money