This presentation summarizes a study on the future of derivatives in Ludhiana. It analyzes data collected from 25 brokers and 25 investors regarding their experience with and perceptions of derivatives. Key findings include: (1) Stock futures are the most preferred investment in derivatives due to higher returns; (2) Derivatives carry high risks, especially commodity derivatives; (3) Real estate offers higher returns with less risk than derivatives; (4) Most use derivatives for hedging purposes. The conclusion is that derivatives markets have grown significantly and have potential for further growth in the future as more investors seek knowledge and opportunities in derivatives trading.
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.
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
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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.
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
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https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
Different Definitions for Investment
Investment may be defined as……………….
“a commitment of funds made in the expectation
of some positive rate of return” OR
it can be defined as………………..
“a sacrifice of current money or other resources
for future benefits”.
Derivatives are risk management instruments, which derive their value from an underlying asset. The underlying asset can be bullion, index, share, bonds, currency, interest etc. SEBI set up a 24-member committee under Chairmanship of Dr.L.C. Gupta to develop the appropriate regulatory framework for derivatives trading in India. The committee submitted its report in March 1998. On May 11, 1998 SEBI accepted the recommendations of the committee and approved the phased introduction of derivatives trading in India beginning with stock index futures. SEBI also approved the “suggestive bye-laws” recommended by the committee for regulation and control of trading and settlement of derivatives contracts. My study is to know about the investors’ familiarity and awareness of the derivative market and their profit/loss positions in trading in types of derivatives.
Different Definitions for Investment
Investment may be defined as……………….
“a commitment of funds made in the expectation
of some positive rate of return” OR
it can be defined as………………..
“a sacrifice of current money or other resources
for future benefits”.
Derivatives are risk management instruments, which derive their value from an underlying asset. The underlying asset can be bullion, index, share, bonds, currency, interest etc. SEBI set up a 24-member committee under Chairmanship of Dr.L.C. Gupta to develop the appropriate regulatory framework for derivatives trading in India. The committee submitted its report in March 1998. On May 11, 1998 SEBI accepted the recommendations of the committee and approved the phased introduction of derivatives trading in India beginning with stock index futures. SEBI also approved the “suggestive bye-laws” recommended by the committee for regulation and control of trading and settlement of derivatives contracts. My study is to know about the investors’ familiarity and awareness of the derivative market and their profit/loss positions in trading in types of derivatives.
FAS119 Disclosure about Derivatives Financial Instruments and Fair Value of F...Elvis Araca
This statements requires disclosures about DFI - futures, fwd, swp and option contracts, and other financial instruments, with similar characteristics.
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
Hi Friends
This is supa bouy
I am a mentor, Friend for all Management Aspirants, Any query related to anything in Management, Do write me @ supabuoy@gmail.com.
I will try to assist the best way I can.
Cheers to lyf…!!!
Supa Bouy
Hi Friends
This is supa bouy
I am a mentor, Friend for all Management Aspirants, Any query related to anything in Management, Do write me @ supabuoy@gmail.com.
I will try to assist the best way I can.
Cheers to lyf…!!!
Supa Bouy
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The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
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Study on future of derivatives(summer training project)
1. SUMMER TRAINING PRESENTATION ON “STUDY OF FUTURE OF DERIVATIVES IN LUDHIANA” Presented to Mr. ArunDutta (Faculty, PCTE) Presented by JasmeetKaur (MBA 2c)
2.
3. Owns and commercially manages investments in companies previously held directly by the Singapore Government.
4. Invests on commercial principles as an asset owner.
5.
6. Introduction To Fullerton Securities & Wealth Advisors Wholly owned subsidary of Temasak Holdings. FSWA is a company registered under Companies Act, 1956 as on 8th feburary,2008.
7. Fullerton Vision To be distinctive financial services entity, providing the widest range of unbiased financial solutions to customers. Achieved through proprietary distribution network and business partners. Top class equity research. High quality & well –trained employees. Consistent service. Cutting edge technology. To provide superior financial planning and wealth advisory.
17. Organizational Chart PallavSinha MA & CEO Ashwinder Raj Singh head.,North & NCR Ashok Mathur Head,South Punit Gupta Head, West SariqHoda Head,EAst Mr. Ashutosh Cluster Head,Punjab Baljinder Singh RM, Acquistion MohitSingla Channel Manager JitinArora RM, HNI MunishGoyal BDM
18. Group Companies Bank Danamon in Indonesia The second largest private national bank and the fifth largest commercial bank in Indonesia, with a 5% share of the domestic system loans and deposits and 1,426 branches. Fullerton India Credit Corporation Established in December 2005, Fullerton India’s business model is community oriented, branch centric and endeavors to build enduring relationships with customers.
22. SWOT Analysis of FSWA, Ludhiana Strengths Everyday technical and fundamental calls are mailed to customers before the market opens. Every single thing happening in organization is mailed to head within seconds and it encourages employees to work. Being MNC it has funds are available for expansion. Therefore, No loan is required.
23. Weakness Employees sometimes use phones for personal calling which doesn’t come into notice and it may increase expenses of company. Opportunities Future expansion plans:- right now company has only 2 offices in Punjab , its plan is to open 15 new branches in Punjab by the end of this financial year. To tap untapped market by providing proper knowledge to potential customers.
24. Threats Existing brokerage firms in market. Being an MNC people don’t know about this company, so people may prefer visiting another company and opening account.
25. History Of Derivatives The first organized commodity exchange came into existence in the early 1700’s in Japan. U. S. futures markets, was the creation of the Chicago Board of Trade in 1848. In 1865, CBOT listed the first ‘exchange traded’ derivatives contract.
26. In 1865, CBOT listed the first ‘exchange traded’ derivatives contract. The Chicago Mercantile Exchange (CME), was formed in 1919, though it did exist before in 1874 under the names of ‘Chicago Produce Exchange’ (CPE) and ‘Chicago Egg and Butter Board’ (CEBB). The first financial futures to emerge were the currency in 1972 in the US.
27. The first foreign currency futures were traded on May 16, 1972, on International Monetary Market (IMM), a division of CME. The first call and put options were invented by an American financier, Russell Sage, in 1872.
30. Derivative instruments are defined by Securities Contract (Regulation) Act include:- A security derived from debt instruments, shares, secured / unsecured loan, risk instruments or contracts for differences, or any other form of security. A contract that derives its value from the prices / index of prices underlying securities.
33. Forward Contract A forward contract is a customized contract between the buyer and the seller where settlement takes place on a specific date in future at a price agreed today.
34. Futures Contract A futures contract gives the holder the right and the obligation to buy or sell, an Asste at a certain time in future , it follows daily settlement
35. Options A contract that gives the option holder the right but not the obligation to buy or sell the underlying asset at a price, called the strike price, during a period or on a specific date in exchange for payment of a premium is known as ‘option’. Two Types Of Options Call Options Put Options
36. Swaps Swaps are contracts to exchange cash (flows) on or before a specified future date based on the underlying value of currencies/exchange rates, bonds/interest rates, commodities, stocks or other assets. Two Types Of Swaps Interest Rate Swaps Currency Swaps
37. Factors Contributing To Growth Of Derivatives Price Volatility Globalization of Market Technological advances Advances in financial theories
38. Title Of The StudyA Study on Future Of Derivatives in Ludhiana.
39. Objectives Of Study To study brokers experience in regard to derivatives. To study investors perception towards derivatives. To study the risk involved in derivative instruments.
40. Limitations Of Study Limited time:- The time available to conduct the study was only 2 months. It being a wide topic had a limited time. Aspect coverage:- Some of the aspects may not be covered in my study. Accuracy:- Some investors have filled forms just for filling them. This may lead to less accuracy in research.
41. Research Methodology Research methodology means the way in which the data has been collected for the research project and the way we would complete our prospected task.
42. Research design Research design is the structure within which research is conducted; it contains the blueprint for the collection, measurement and analysis of data. Descriptive research design has been used as in this research the perception of brokers and investors in regard to derivatives has been studied.
43.
44. Universe- All the people who are dealing in derivatives and were interested to deal in derivatives. Population- (i) All the brokers dealing in derivatives in Ludhiana. (ii) All the people dealing in derivatives or interested in dealing, in Ludhiana. Sampling Unit – Every single person visiting Ansal plaza and Feroz Gandhi market and every broker of Ludhiana Stock Exchange is sample unit in the report
45. Sampling Frame - It represents the elements of the target population. Ludhiana City is the sampling frame for this project. Sample size- Sample size used in the project is 50 (25 brokers and 25 investors). Sampling Technique-Non Probability technique i.econvenience sampling has been used forcollecting data.
74. Findings Main factor that led to growth of derivatives are higher return. Stock Futures are most preferred for investing in derivatives. Derivatives carry high risk factor and amongst that commodity derivatives are the most risky to trade due to high fluctuations. Money invested in real estate would fetch higher return compared to derivatives and would carry less risk.
75. Maximum people use derivative as Hedging tool. People already investing money through derivatives would like to increase their investments because they find it highly profitable. Some people would prefer to invest their money through derivatives if they are provided with knowledge and a reliable broker.
76. Suggestions People with low investment and less knowledge should not enter derivatives market. SEBI should be more vigilant to check the volatility triggered by operators. One should invest for long term and that too only in blue chip companies. One should always invest their money and should not speculate because speculation can cause heavy losses. If one wants to make money in stock market he should invest gradually in cash segment.
77. Conclusion According to responses given by brokers and investors a conclusion can be attained that there is great market ahead for derivatives in future. As fifty percent of people are ready to take knowledge and invest their money in derivatives, existing investors are ready to increase their investments which is healthy sign for the markets. Even average turnover at NSE has increased over last 10 years which shows us trend that in future there will be rise in derivatives trading.
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