Margin money plays a vital role in futures trading as it is that it authorizes to leverage. In comparison to spot market transaction, margins are the ones that allow ‘Futures agreement’. You might know that futures are an improvement over forwards. Actually, the futures agreement inherits the transactional layout of the forwards market. Before we proceed we need to clear our concept on future trading. Characteristics of future market 1. In terms of the spot market, the futures price imitate the primary price.
Read MoreAs an investor in the stock market, you need to know about various characteristics of a company that is part of them. This is important as it will assist you in understanding the very nature of the company whose share might interest you. One of such basic determinants of the company’s essential characteristics is the size of the company. And you know, there is a concept that helps in understanding such size aspect. It is market capitalization. Yes, market capitalization
Read MoreFor those who are investing in the stock market for the first time, the entire process may seem like an exercise in chaos. However, that’s not true. Stock trading, in fact, is a very efficient way to facilitate the buying and selling of securities in the market. Thanks to technology, most of the stock trading can be done with very little (if any) human intervention. You may feel intimidated in the beginning, with terms like ‘blue chip stocks’ and ‘short
Read MoreStock classification is the process of grouping stocks for ease of understanding. In India both BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) classifies stocks. More or less the classification of stocks is similar on both platforms. This stock classification was done to handle the stocks based on trading characteristics of Indian shares on the exchange platform and are known as grades. Mainly there are seven grades of stocks namely, A, B, T, S, TS & Z. All other
Read MoreDerivatives are tradable products whose price is based upon another market. Derivatives are security, whose value based upon other more basic underlying variables. In recent years, derivative security has become increasingly important in the finance field. So it is important to know about the derivative market and its instruments. Futures & Options are now actively traded on many different exchanges. Forward contracts, swaps and many different types of options are regularly traded outside the exchanges by financial institutions and their
Read MoreTo open demat account in India needs lots of steps to follow and that too very strictly. The popular name of the dematerialization of securities in India is Demat or Dmat. It is a facility for keeping all your financial assets into electronic form. The present blog is for those who are beginning or even planning to enter the stock market in India. “How can I open a demat account?”, “How to open demat account in India?”, “What is the
Read MoreDerivatives market participants are financial intermediaries that help maintain liquidity in the market. They also furnish depth to the market. We all are familiar with the features of financial markets. Through financial markets banks, corporate and government raise or deploy money to meet their requirements. The primary markets and secondary markets are two subcategories of the financial market. In the primary market, various financial intermediaries raise money by issuing instruments like shares, debentures bonds, etc. While in the secondary market you
Read MoreThe Indian derivatives market is in existence for very long. In the derivatives market, we deal with derivative securities. In the Indian derivatives market, trade takes place with the help of derivative securities. Such derivative securities or instruments are forward, futures options and swaps. Participants in derivatives securities not only trade in these simple derivative securities but also trade hybrid derivative instrument. “Derivatives are financial securities and are financial contracts that obtain value from something else, known as underlying securities.
Read MoreThe capital market structure is a layer of the financial system. Here buyers and sellers interact for dealing in financial securities. In fact, the capital market is sub-part of a financial system. The other part of the financial system is the money market. In fact, the capital market structure provides structural foundations for long-term capital flow in India. While the money market deals with short-term financing and its counterpart capital markets with the financing of long-term in nature. The primary
Read MoreA corporate action is an episode by a listed company to bring changes to the securities. Securities may be equity or debt by the issuing public company. Company’s board of directors approves for corporate action after the shareholder’s authorization. Stock splits, dividends, mergers, and acquisitions, rights issues, etc. are the typical corporate action. Thus, to summarize, A corporate action by a listed company influences its shareholder’s value straight. Such corporate action may either be monetary or non-monetary. Payment of dividend
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