Meaning, nature and role of capital market, features of developed capital market, reforms in the capital market, regulatory framework of capital market, capital market instruments and innovation in financial instruments.
A brief description on how the stock market grew in India. Refering to post independence period and the features of stock market. A brief discussion on NSE and BSE is also provided.
Meaning, nature and role of capital market, features of developed capital market, reforms in the capital market, regulatory framework of capital market, capital market instruments and innovation in financial instruments.
A brief description on how the stock market grew in India. Refering to post independence period and the features of stock market. A brief discussion on NSE and BSE is also provided.
The foreign exchange market or forex market as it is often called is the market in which currencies are traded.
Currency Trading is the world’s largest market consisting of almost trillion in daily volumes
The market continues to rapidly grow. Not only is the forex market the largest market in the world, but it is also the most liquid, differentiating it from the other markets.
There is no central marketplace for the exchange of currency, but instead the trading is conducted over-the-counter.
This decentralization of the market allows traders to choose from a number of different dealers to make trades with and allows for comparison of prices. Typically, the larger a dealer is the better access they have to pricing at the largest banks in the world, and are able to pass that on to their clients.
The spot currency market is open twenty-four hours a day, five days a week, with currencies being traded around the world in all of the major financial centers.
All trades that take place in the foreign exchange market involve the buying of one currency and the selling of another currency simultaneously. This is because the value of one currency is determined by its comparison to another currency.
The first currency of a currency pair is called the “base currency,” while the second currency is called the counter currency. The currency pair shows how much of the counter currency is needed to purchase one unit of the base currency.
Currency pairs can be thought of as a single unit that can be bought or sold. When purchasing a currency pair, the base currency is being bought, while the counter currency is being sold.
Forex Capital Markets (FXCM) is an online currency trading firm that offers a free demo account to traders who are new and interested in the foreign exchange market.
It allows you to experience every step of currency trading including choosing currency pairs, deciding how much risk to take, tracking the time and dates of placed trades, deciding how long to stay in the trade, and when to exit the trade. It also allows the placing of stop and limit orders on trades.
Information about trading and specifically about how to use the online trading platform can be found on the FXCM webpage. In addition, FXCM offers FREE interactive online seminars that are extremely useful to both new and experienced currency traders.
Characteristics of foreign exchange
Its huge trading volume representing the largest asset class in the world leading to high liquidity;
Its geographical dispersion;
Its continuous operation: 24 hours a day except weekends, i.e., trading from 20:15 GMT on Sunday until 22:00 GMT Friday;
The variety of factors that affect exchange rates;
The low margins of relative profit compared with other markets of fixed income;
The use of leverage to enhance profit and loss margins and with respect to account size.
Commodity derivatives market, Types of commodities traded in Commodity market, Commodity exchanges in India, Multi Commodity Exchange (MCX), National Commodities and Derivatives Exchange (NCDE), National Multi Commodity Exchange of India Ltd (NMCE), How to trade in commodity futures in India, Most active commodity on MCX, Benefits of Commodity Market, Precautions and Tips.
Derivatives - Basics of Derivatives contract covered in this pptSundar B N
Derivatives - Basics of Derivatives including forward, futures, swap and options contracts which covers HISTORY OF DERIVATIVES, CHARACTERISTICS OF DERIVATIVES , FEATURES OF DERIVATIVES, FUNCTIONS OF DERIVATIVES MARKET, USES OF DERIVATIVES, DIFFERENCE BETWEEN SHARES AND DERIVATIVES SHARES DERIVATIVES, DEFINITION OF UNDERLYING ASSET, DERIVATIVES ADVANTAGES AND DISADVANTAGES, PARTICIPANTS/ TRADERS IN DERIVATIVES MARKET, SPECULATORS, ARBITRAGEURS, HEDGER
Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
The foreign exchange market or forex market as it is often called is the market in which currencies are traded.
Currency Trading is the world’s largest market consisting of almost trillion in daily volumes
The market continues to rapidly grow. Not only is the forex market the largest market in the world, but it is also the most liquid, differentiating it from the other markets.
There is no central marketplace for the exchange of currency, but instead the trading is conducted over-the-counter.
This decentralization of the market allows traders to choose from a number of different dealers to make trades with and allows for comparison of prices. Typically, the larger a dealer is the better access they have to pricing at the largest banks in the world, and are able to pass that on to their clients.
The spot currency market is open twenty-four hours a day, five days a week, with currencies being traded around the world in all of the major financial centers.
All trades that take place in the foreign exchange market involve the buying of one currency and the selling of another currency simultaneously. This is because the value of one currency is determined by its comparison to another currency.
The first currency of a currency pair is called the “base currency,” while the second currency is called the counter currency. The currency pair shows how much of the counter currency is needed to purchase one unit of the base currency.
Currency pairs can be thought of as a single unit that can be bought or sold. When purchasing a currency pair, the base currency is being bought, while the counter currency is being sold.
Forex Capital Markets (FXCM) is an online currency trading firm that offers a free demo account to traders who are new and interested in the foreign exchange market.
It allows you to experience every step of currency trading including choosing currency pairs, deciding how much risk to take, tracking the time and dates of placed trades, deciding how long to stay in the trade, and when to exit the trade. It also allows the placing of stop and limit orders on trades.
Information about trading and specifically about how to use the online trading platform can be found on the FXCM webpage. In addition, FXCM offers FREE interactive online seminars that are extremely useful to both new and experienced currency traders.
Characteristics of foreign exchange
Its huge trading volume representing the largest asset class in the world leading to high liquidity;
Its geographical dispersion;
Its continuous operation: 24 hours a day except weekends, i.e., trading from 20:15 GMT on Sunday until 22:00 GMT Friday;
The variety of factors that affect exchange rates;
The low margins of relative profit compared with other markets of fixed income;
The use of leverage to enhance profit and loss margins and with respect to account size.
Commodity derivatives market, Types of commodities traded in Commodity market, Commodity exchanges in India, Multi Commodity Exchange (MCX), National Commodities and Derivatives Exchange (NCDE), National Multi Commodity Exchange of India Ltd (NMCE), How to trade in commodity futures in India, Most active commodity on MCX, Benefits of Commodity Market, Precautions and Tips.
Derivatives - Basics of Derivatives contract covered in this pptSundar B N
Derivatives - Basics of Derivatives including forward, futures, swap and options contracts which covers HISTORY OF DERIVATIVES, CHARACTERISTICS OF DERIVATIVES , FEATURES OF DERIVATIVES, FUNCTIONS OF DERIVATIVES MARKET, USES OF DERIVATIVES, DIFFERENCE BETWEEN SHARES AND DERIVATIVES SHARES DERIVATIVES, DEFINITION OF UNDERLYING ASSET, DERIVATIVES ADVANTAGES AND DISADVANTAGES, PARTICIPANTS/ TRADERS IN DERIVATIVES MARKET, SPECULATORS, ARBITRAGEURS, HEDGER
Subscribe to Vision Academy for Video assistance
https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Did you know that the cryptocurrency market is projected to reach a staggering $3.5 trillion by 2024? With such immense growth potential, it's no wonder that investors are flocking to cryptocurrencies to make substantial gains. If you're looking to capitalize on this booming market, you need a solid strategy. In this article, we will introduce a 3-step strategy that will help you make huge gains in the 2024 cryptocurrency market.
In the fast-paced and ever-evolving realm of finance, the emergence of cryptocurrency markets has captivated investors, enthusiasts, and curious individuals alike. Understanding Cryptocurrency Markets is akin to unraveling a multifaceted tapestry woven with technology, economics, and decentralized principles. This introduction serves as a gateway for those venturing into the intriguing world of digital assets, providing insights into the key components that shape cryptocurrency markets.
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The Simple Truth Behind Managed Futures & Chaos Cruncher
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International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
This presentation provides a highlight of the key issues in the management of Market Risk. It touches briefly some of the elements of the Basel 2 Accord with respect to Market Risk
Commodity trading has undergone tremendous changes,
from the barter system to spot markets to futures markets.
The major steps towards introduction of futures trading in
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the national level. Since then, the commodity future
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and energy products dominate the trading volume.
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2. Kalpana K.C.
Nitesh Khatiwada
Soni Sahani
Seminar in Financial System in Nepal
Master of Business Management
Nepal Commerce Campus
Kathmandu
Good Morning!!
2
4. “
A security or contract designed in such a way that its
price is derived from the price of an underlying
asset.
4
5. Understanding Derivative Instruments
Consider that if your college reimburses 100%
of costs for an “A”, 75% of costs for a “B”, 50%
for a “C” and 0% for anything less.
Your “right” to claim this reimbursement, then is
tied to the grade you earn. The value of that
reimbursement plan, therefore, is derived from
the grade you earn.
A video: Understanding Derivatives
5
6. Can be created by mutual agreement - types of
derivative products are limited only by
imagination and so there is no definitive list of
derivative products.
Types:
Options
Swaps
Warrants
Futures
Forwards6
Understanding Derivative Instruments
7. In creating a financial derivative, the means for,
basis of, and rate of payment are specified
Payment may be in currency, securities,
physical entity such as gold or silver,
agricultural product such as wheat or pork, a
transitory (short lived) commodity such as
communication bandwidth or energy
7
Understanding Derivative Instruments
8. The amount of payment may be tied to
movement of interest rates, stock indexes, or
foreign currency
8
Understanding Derivative Instruments
10. Features
Relates to the future contract between two parties
Value derived from underlying assets
Counter parties have specific obligation under the
derivative contract
Undertaken directly between two parties or
through the particular exchange
10
11. Features
Underlying transactions are mostly settled by
taking offsetting positions
Mostly secondary market instruments, have little
usefulness in mobilization of fresh capital
Standardized exchange traded as well as
customized, OTC traded
Off-balance sheet item
12. Types of Traders
Hedgers
Use derivatives to reduce the risk that they face from potential
future movements in a market variable
Speculators
Use derivatives to bet on the future direction of a market
variable
Arbitrageurs
Take offsetting positions in two or more instruments to lock in
a profit
12
13. Critique of Derivatives
Speculative and gambling motives
Increase in risk
Instability of the financial system
Price instability
Displacement effect
Increased regulatory burden
13
14. Derivative Exchanges
A derivative exchange is a market where
individuals trade standardized contracts that have
been defined by the exchange
The CBOT was established in 1848 to bring
farmers and merchants together
A rival futures exchange CME was established in
1919
CBOE started trading call option contracts on 16
stocks in 197314
15. OTC Market
The over the counter market is a telephone and
computer linked network of dealers who do not
physically meet.
Trading is done over the telephone.
Usually between two financial institutions (FIs) or
between a FI and its clients
FIs often act as a market maker for more
commonly traded instruments
15
16. OTC Market
Telephone conversations in the OTC are usually
taped.
OTC trades are much larger than the exchange
traded market.
Market participants are free to negotiate any
mutually attractive deal.
Usually some credit risk is involved
16
17. Myths about Derivatives
Derivatives are new, complex, high-tech
financial products created by Wall Street’s
rocket scientists.
Derivatives are purely speculative, highly
leveraged instrument.
The enormous size of the financial derivatives
market dwarfs bank capital, thereby making
derivatives trading an unsafe and unsound
banking practice.17
18. Myths about Derivatives
Only large multinational corporations and large
banks have a purpose for using derivatives.
Derivatives take money out of productive
processes and never put anything back.
Only risk seeking organizations should use
derivatives.
The risk associated with financial derivatives
are new and unknown
18
24. Instruments Traded in Nepal
Forward
Contract that gives the buyer and the seller the right
and the obligation to buy a specified asset on a
specified date at a specified price
Ownership of good is transferred and payment is
made
Traded Over the counter
24
25. Instruments Traded in Nepal
Future
Contract that gives the buyer and the seller the right
and the obligation to buy a specified asset on a
specified date at a specified price
No physical delivery of goods
Traded on organized exchange
25
27. Challenges of Derivative Market in Nepal
Lack of sufficient penetration of internet in
urban areas
computer literacy with minimum number of
people
traditional method of agro-economy
non-commercialized agro production sector
lower literacy rate
Financial Literacy of educated people
27
28. Challenges of Derivative Market in Nepal
Other challenges:
Contract sizes at international markets that can be too
large for developing country requirements.
Exchange rate controls or risk
28
29. Prospect of Derivative Market in Nepal
Fluctuating Exchange Rate
Huge loss in agro products due to natural
calamities
Predicting future price
SWAP income flows
Devised to mitigate risk
Employment
Market for local commodity29
36. Creating Successful Derivative Contract
Exchange
Perseverance
Derivative
Market
Environment
Well Designed
Contract
Quotes for illustration purposes only
37. Creating Derivative Markets
Other Considerations
High level of investor’s sophistication and awareness
Information Symmetry
Availability of local commodity in large scale
Adequate risk management knowledge and practice
37
38. Conclusions
There was considerable enthusiasm in the field
Speculative use of derivatives with intent to
earn more in a short span of time can de-
stabilize the financial market and ultimately
pose a real threat to financial stability
Considered as complex
38
39. Conclusions
Unethical practices, manipulation of the real
rates
Potential for miscalculation, misuse and
unawareness had led to some highly publicized
losses has driven the sentiments of the public
against
Decreasing attraction
The misuse, compromised and speculative use
of derivatives39
40. References
40
David Siegel. (2016, June 23). Derivative. Retrieved from Investopedia:
http://www.investopedia.com/terms/d/derivative.asp?layout=infini&v=5E&orig=1&adtest=5
E
Hull, J. C., & Basu, S. (2011). Options, Futures and Other Derivatives. Delhi: PEARSON.
Mahat, M. (2011). New Financial Products and Challenges for Central Bank: Nepal. 174-206.
Risal, N. (2016). Capital Market. Financial System in Nepal. Kathmandu: Nepal Commerce Campus.
Shrestha, R. (2010). Why to Invest in Derivative Market? New Business Age.
Sigdel, S. N. (2012). Basics of Derivatives. Options, Futures and Derivatives. Kathmandu: Apex
College.
Weber, E. J. (2008). A Short History of Derivative Security Markets. Economics.
41. Thank You!!
You can find us at:
Master of Business Management
Nepal Commerce Campus (2015-2017)
Kathmandu, Nepal