Tag Archives: Share Market

Single Stock Futures

APPLICATIONS OF FUTURES AND OPTIONS The phenomenal growth of financial derivatives across the world is attributed the fulfilment of needs of hedgers, speculators and arbitraguers by these products. In this chapter we first look at how trading futures differs from trading the underlying spot. We then look at the payoff of these contracts, and finally at how these contracts can be used by various entities in

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Stock market Questions And Answers

QUESTIONS AND ANSWERS ON CHAPTER Q. Which of the following cannot be an underlying asset for financial derivative contract ? Equity Index Commodities 3.Interestrat£ 4.. Foreign Exchange A. The correct answer is NO.2.       • Q. In an option contract, the option lies with the Buyer Seller Both Exchange A. The correct answer is NO.2. Q. Which of the following exchanges was the first to

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Options In 17th Century

USE OF OPTIONS IN 17th CENTURY Options made their first major mark in financial history during the tulip bulb mania in 17th. century Holland. It was one of the most spectacular get rich quick binges in history. The first tulip was brought into. Holland by a botany professor from Vienna. Over a decade, te tulip became the most popular and expensive item in Dutch

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Futures And Options

FUTURES AND OPTIONS An interesting question to ask at this stage is, when would one use options instead of futures? Options are different from futures in several interesting senses. At a practical level, the option buyer faces an interesting situation. He pays for the option in full at the time it is purchased. After this, he only has an upside. There is no possibility

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Introduction To Futures And Options

INTRODUCTION TO FUTURES AND OPTIONS In recent years, derivatives market have become increasingly important in the field of finance. While futures and options are now actively traded on many exchanges, forward contract s are popular on the OTC market. In this chapter we shall study in detail these three derivative contracts. . FORWARD CONTRACTS A forward contract is an agreement to buy or sell

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Use of Futures Market Ry Index Funds

USE OF FUTURES MARKET RY INDEX FUNDS Futures markets can be used for creating synthetic index funds. Synthetic index funds created using futures contracts have advantages of simplicity and low costs. The simplicity stems from the fact that index futures automatically track the index. The cost advantages stem from the fact that the costs of establishing and re­balancing the fund are substantially reduced because

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The S&P Cnx Nifty

The S&P CNX Nifty is an market capitalisation index based upon solid economic research. It was designed not only as a barometer of market movement but also to be a foundation of the new world of financial products based on the index like index futures, index options and index funds. A Trillion calculations were expended to evolve the rules inside the S&P CNX Nifty.

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Type of Indexes

Most of the commonly followed stock market indexes are of the following two types: Market capitalization weighted index or price weighted index. In a market capitalization weighted index, each stock in the index affects the index value in proportion to the market value of all shares outstanding. A price weighted index is one that gives a weight to each stock that is proportional to its

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Exchange Vs Otc Derivatives Markets

Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified price. A primary motivation for pre-arranging a buyer or seller for a stock

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Economic Function Of Derivative Market

Inspite of the fear and criticism with which the derivatives markets are commonly looked at. these markets perform a number of economic functions. Princes in an organized derivatives market reflect the perfection of market participants about the future and lead the prices of underlying to the perceived future level. The prices of derivatives converge with the prices of the underlying at the expiration of

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