welcome to stock markets

Download Welcome to stock markets

Post on 06-May-2015



Economy & Finance

0 download

Embed Size (px)


it introduce all about stock market and derivatives


  • 1.What is SENSEX? Index of Bombay Stock Exchange Most popular stock market index inindia First compiled in 1986 Consists of 30 stock Base year 1978-79, base value 100 Current sensex value is 17900

2. What is NIFTY?Index of National Stock ExchangeMost widely used index in indiaFirst published in 1995Base year 1995, base value 1000Consist of 50 stock from 21 sectorsCurrent value of Nifty is 5380 3. BSE-17748 Nifty-5381 Nikkei- 8947 Hangseng- 20783 Straits- 2960 Dowjones- 12801 Nasdaq- 2903 USD to INR 49.50 4. Uses of an Index Lead indicator of the economy Barometer to monitor marketmovement Benchmark for portfolios Use in Index funds Underlying asset in index derivatives Reflection of expectation about future 5. Financial MarketsMarkets for financial assets or financial claims1. Money markets2. Capital markets 6. Capital Markets Markets for long term funds Instruments like shares, debentures, etc 1. Primary markets 2. Secondary markets 7. Primary Markets Market for new issues Initial Public Offer (IPO) Qualified Institutional Placements(QIP) Merchant banking Book building 8. Secondary Markets Stock exchanges- BSE and NSE Trading: floor trading to electronictrading Dematerialization: NSDL and CDSL Clearing and Settlement (T+2 rolling) 9. Type of TradingInvestment:SpeculationGambling 10. InvestmentsBuying for long termDividend income andLong term capital gain 11. SpeculationTaking high risk for high returnPlanned game for very short periodBased on rumors, guess work, intelligence 12. GamblingTaking high risk for enjoymentBlind tradingGreed and Panic 13. Type of speculators 1. BULL Expect market to go up Bulls buy first sell next 2. BEAR Expect market to go down Bears sell first buy next 14. Security Analysis Fundamental analysis Technical analysis Efficient market hypothesis 15. Factors to watch Global markets Macro economic factors like inflation,interest rate, GDP data etc General sentiment (institutional &retail) Company specific news Technical levels 16. Derivatives Financial contracts Derived from the value of an underlying asset 17. Types of derivativesForwardsFuturesOptionsSwaps 18. Forwards Vs FuturesFuturesForwardsExchange tradedNon exchange tradedMargin requiredNo margin requirementStandardized contracts Customized contractsNo counter party riskHigh counter party risk 19. OptionsOption or right to buy or sellNo obligation to buy or sellTwo typesCALL option option to buyPUT option- option to sell 20. Swaps Agreements to exchange one series ofcash flow with another series. Example: plain vanilla fixed interestloan to floating interest loan 21. Swaptions Two types Payer swaption: pay fixed, receive floating. Equal to acall option Reciever swaption: receive fixed pay floating. Equal toa put option 22. Thank Youabbasvattoli@yahoo.com