This document defines key terms related to derivatives trading, including principal, margin balance, initial margin, maintenance margin, variation margin, profit/loss, exposure, and settlement amount. The initial margin is the minimum deposit required to open a position, while the maintenance margin is a lower threshold that triggers a margin call. Profits and losses are calculated daily based on price movements and the number of contracts held. Exposure refers to the total value of a position without considering margins.
CHAPTER 12: THE TRADING PLATFORM & TYPES OF TRADING CONTRACTSanyoption
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House of Trading experts in economics, financial analysis and Forex trading delivered a seminar in London on the psychology of trading, including mindset, method and strategies. Please enjoy the presentation from session two at the ActivTrades Trading Psychology event and get in touch with one of the team if you'd like to find out more about how the House of Trading can teach you to trade, make you profitable and set you on a path to a City account in months.
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Notes on Valuation of Goodwill and Shares For BBA/B.com studentsYamini Kahaliya
the document contains Notes on Valuation of Goodwill and Shares
{Goodwill may be described as the aggregate of those intangible attributes of a business which contributes to its superior earning capacity over a normal return on investment}
{The share capital is the most important requirement of a business. It is divided into a ‘number of indivisible units of a fixed amount. These units are known as ‘shares’. }
The ppt was made by me last year at an investor forum and covered in business standard subsequently
http://www.business-standard.com/india/news/checklist-for-evaluatingdelisting-proposal/454475/
Look forward to your comments and suggestions at ashishkila@gmail.com
Maintenance Margin is the minimum amount that an investor needs to keep in their margin account with their broker. And this margin would allow the investor to keep a leverage position open with his broker.
To know more about it, click on the link given below:
https://efinancemanagement.com/derivatives/maintenance-margin
CHAPTER 12: THE TRADING PLATFORM & TYPES OF TRADING CONTRACTSanyoption
Profit Line Feature
Take Profit Feature
Get Quote Feature
Roll Forward Feature
Payout Percentages Option
Market Sentiment Indicator
Mobile Trading
Types of Trades Available
Advance Option Trading Strategy Mentorship Program - For More Details Visit - https://www.ptaindia.com/advance-option-trading-strategies-mentorship-program/
Or Call +91 9261211003
House of Trading experts in economics, financial analysis and Forex trading delivered a seminar in London on the psychology of trading, including mindset, method and strategies. Please enjoy the presentation from session two at the ActivTrades Trading Psychology event and get in touch with one of the team if you'd like to find out more about how the House of Trading can teach you to trade, make you profitable and set you on a path to a City account in months.
www.thehouseoftrading.com
Trading Lounge specialises in helping contracts for difference trader with CFD trading education,Technical analysis, CFD trading strategies, Daily CFD trades for shares, Including Forex, commodities and indices, Suppling around the clock analysis for whatever country is trading CFDs.
Notes on Valuation of Goodwill and Shares For BBA/B.com studentsYamini Kahaliya
the document contains Notes on Valuation of Goodwill and Shares
{Goodwill may be described as the aggregate of those intangible attributes of a business which contributes to its superior earning capacity over a normal return on investment}
{The share capital is the most important requirement of a business. It is divided into a ‘number of indivisible units of a fixed amount. These units are known as ‘shares’. }
The ppt was made by me last year at an investor forum and covered in business standard subsequently
http://www.business-standard.com/india/news/checklist-for-evaluatingdelisting-proposal/454475/
Look forward to your comments and suggestions at ashishkila@gmail.com
Maintenance Margin is the minimum amount that an investor needs to keep in their margin account with their broker. And this margin would allow the investor to keep a leverage position open with his broker.
To know more about it, click on the link given below:
https://efinancemanagement.com/derivatives/maintenance-margin
Business sale transactions are rarely structured all in cash, especially in the current climate. For a number of reasons including tax, financing, buyer hedging and maximisation of value, deals can be structured in a variety of way and we have focused on some of the more common ones below:
Cash
Deferred payments
Retentions
Performance related payments (PRP)
Earn Outs
Elevator Deals
Shares
Mergers
this power point includes some important topics in the stock market like ( criteria to invest on long term , volatility , stock market stages ,reducing risk )
Prepare a witten financial analysis. .This should include calculation.pdfarrowit1
Prepare a witten financial analysis. .This should include calculations and discussion related to
the Chapter 5 appendix (Appendix 5A). See illustration 5A-1 for a summary of financial ratios.
Be sure to include (1) these ratios, (2) what they mean and (3) how you interpret them: o Current
ratio o Accounts receivable turnover o Inventory turnover o Profit margin on sales o Return on
assets o Return on stockholders\' equity o Debt to assets ratio Submit a WORD document via
D2L- Assessments - Assignments
Solution
Ans ) The ratios are not meant for a particular person or firm.People in various fields of life are
interested in ratio analysis from their own angles.The parties attached with business or firm are
creditors i.e. mony lenders, shareholders.Management uses the toolof Ratio analysisto
interpretate the information from their own angles.For example creditors are interested in
liquidity and solvency for which they will make use of current ratio , liquidity ratio,
proprietaryRatio, debt equity Ratio,capital gearing Ratio.Shareholders are interested in
profitability and long term solvency.They want to know the rate of return on their capital
employed for which they willmake use of Gross Profit Ratio, Operating Ratio, Dividend ratio
and Price Earning Ratio.Management is interested in overall efficiency of business which can be
better jud ged through Ratios like turnover to fixed assets, turnover to capital employed, stock
turnover ratio etc.So, from the above discussion it is clear that different prties uses the tool of
Ratio analysis for taking their own decisions
The particular purpose of a user is determining the particular Ratios that might be used ofr
financial analysis.Here we will discuss and calculate various ratios to do fianacial analysis.
Current Ratio = Current Assests/Current Liabilities
Current Assests= Cash + Bank+ Prepaid Insurance+Inventory+ Accounts Recievables
Current Assests=44746.5 +510+500+5000+29000=79756.5
Current Laibilites =Accounts payable
Current Laibilites= 30064.83
Current Ratio = 79756.5/30064.83= 2.7
Interpretation : Generally a current ratio of 2 times or 2:1 is cosidered to be satisfactory.Here the
current ratio of greater than 2 denotes the good liquidity position but it also indicates assest
liabilty mis match.But current ratio greater than 2 is generally preferred as compared to less than
2.
2.Account receivables turnover :It represents the number of times the cash is collected from
debtors.Lower turnover denotes poor collection and means that funds are blocked ofr longer
period of tiem and vice-versa.It also measure the liquidity of the firm.It shows how quickly
debtors (receivables) are converted into sales.The Account receivables turnover shows the
relationship between sales and debtors of the firm.
Account receivables turnover= Net Credit Annual Sales/Average trade debtors
3. Inventory turnover :This ratio indicates the number of times inventory or stock is replaced
during the year.The turnover of invent.
Risk management is amongst the most overlooked yet very critical aspects of systematic trading. In this webinar, you’ll get to learn risk management techniques to overcome the most common challenges. This session will explain you the concepts of optimal leverage, hedging and risk indicators.
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2. Page 1 of 3
Derivatives 101 Prepared by: Stephanie Kimani
Principal:
This identifies each client/member based on a unique code. With this code you are able to have a
brief overview of the clients’ details.
Margin balance:
This is the minimum amount of money required in your client’s account so as to be able to trade a
particular futures contract. The margin varies from market to market and differs if you are doing a
day trade versus a position trade.
The purpose of this minimum amount is to make sure that the client has money in their account to
pay for possible losses on that trade. The unique characteristics about futures trading margin is a
relatively low amount is required and the fact that you do not have to pay interest on the
remaining margin balance.
When buying equities, a margin is the ability to trade a stock with e.g. 50% margin where you
are able to buy Ksh 100,000 worth of a stock with only Ksh 50,000 in your account while the
remaining balance you are required to pay interest on it as you are borrowing from your
brokerage firm.
With futures margins the client only needs a small percentage of the contract value on hand with
the broker and they would not have to pay interest on the remaining balance. For example, if you
are buying a single stock future for Ksh 15 per contract, each contract has a nominal amount of
Ksh 100 and are purchasing 1,000 contracts then the total contract value would be Ksh
1,500,000. However, if only 5% margin (initial margin) is required then you would only need Ksh
75,000 in your margin account.
To note is that if there is a small move in the futures price then this could equate to a large move
relative to the margin balance in your account. This is good if the client who is making a profit but
detrimental to those making a loss.
Important margins:
There are two important margins a dealer needs to be aware of at all times. That is the initial
margin and the maintenance margin. The initial margin is the amount needed initially to
place an order. In our previous example, we took the initial margin as 5% of the total contract
value. (The example assumed that there is no previous day’s margin balance)
The maintenance margin is usually between 70 - 80% of the initial margin and is the amount of
money the client is required to maintain in their bank account after the position is put.
In the event the account balance falls below the maintenance margin, then the client will receive a
margin call which alerts the client to either deposit more money to their account so as to bring it
back to/above the initial margin requirement so as to keep the position open or that the clients
position may be liquidated or closed out to avoid further potential losses.
3. Page 2 of 3
Derivatives 101 Prepared by: Stephanie Kimani
For example:
Starting Account Balance = Ksh 250,000
Total Contract Value (based on previous example) = Ksh 1,500,000
Initial Margin required (5% of contract value) = Ksh 75,000
Maintenance Margin required (75% of Initial Margin) = Ksh 56,250
If the account balance falls below the maintenance margin then the client receives a margin call
from their broker.
New Account Balance = Ksh 50,000
Margin Call
Option 1: Variation Margin: Ksh 75,000 – Ksh 50,000 = Ksh 25,000
Option 2: Either close out some or all of your open positions to meet the margin call.
Margin Requirement:
This is the initial margin requirement stated previously as the initial margin which a small
percentage of the total contract value.
Variation Margin:
Minimum amount needed to bring back the account to initial margin
For example:
Profit/Loss: This is based on either the trade or the position. You compute this as follow:
Price traded at = Ksh 15
Last traded price = Ksh 12
Number of contracts = 1000
Profit/Loss: (Ksh 15 – Ksh 12)*1000 = Ksh 3,000
NB: If long then multiply with a +ve quantity, it short multiply with a –ve quantity.
4. Page 3 of 3
Derivatives 101 Prepared by: Stephanie Kimani
Exposure:
This is the total amount you could lose on every single one of your positions. It is based on the
outstanding number of shares and doesn’t look at it from a margin point of view but the total
outstanding value of the contract. It is computed as follows
Exposure = last traded price x nominal amount x quantity
NB: If long then multiply with a +ve quantity, it short multiply with a –ve quantity.
Settlement amount:
This is the projected settlement amount that is computed from the summation of the margin
movement and the projected profit/loss.
NB: settlement is based on profit/loss from an order being executed and position movements.
For more information on this, kindly contact me on my direct line 0711047125 or via email
kimania@aibcapital.com