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In stock market you get financial products called forward contracts for future deliveries. Forward contacts allow you to buy or sell assets at a specific price and at a specific time in future. Traders purchase and sell them in order to speculate (increase returns) or hedge (protect investments). The Forward Markets Commission in India oversees the forward and futures markets. The forex market is often associated with the forward market. However, it also involves trading of commodities, interest rates, and other securities.
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OTC derivatives are contracts that derive their value from underlying assets such as stocks, bonds, commodities, interest rates, currencies, or credits. Their flexibility and adaptability make OTC significant. In contrast to exchange-traded derivatives, OTC contracts allow parties to customise their agreements for specific purposes.
Find out about OTC meaning, how they work, types, advantages, and disadvantages by reading this article.
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The options market offers a variety of instruments that traders can use to sell options and profit before the expiration date. Expert options traders employ tools like calendar spreads, which are started when market sentiment is neutral. Various options have the same underlying asset and strike rate, but various expiration dates are started as calendar spreads.
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An option trading strategy which is done by combining multiple calls and put options to develop a market-neutral strategy is known as the Iron Butterfly Strategy or Iron Fly Strategy. Know more about the Iron Butterfly Strategy in the following details
The strategy of the Iron Fly Option Strategy is to run short call spreads and short put spreads in parallel. The Iron Butterfly Strategy comprises a credit spread comprising four options, limiting risk and potential profit. In periods of lower price volatility, this strategy is best used.
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The exchange-traded derivative is a standardised derivative contract, such as a futures or options contract, that is traded on an organised exchange. If you've ever tried to grasp financial markets, watched a bit of financial news now and then, or even glanced at a financial newspaper occasionally, chances are you've come across the term "derivatives" many times. Know about Exchange Traded Derivatives in the following article.
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In the stock market there are practically 4 main dates that are related to the payment of dividend for a listed company. One of them is commonly known as the ex-dividend date or ex-date.
"Ex-dividend" refers to the date on which a stock begins trading without the right to the recently declared dividend. Investors who purchase shares on or after this date are not entitled to the upcoming dividend payment.
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A Debenture is a type of debt tool- used to raise capital for a company, whereas the shares allow you ownership in the listed company. Among the most widely traded securities on the stock market, shares and debentures are two prominent ones. While both represent investment opportunities, they exhibit contrasting attributes and associated risks.
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There are two major stock exchanges in India. Those are NSE and BSE, you can know the difference between BSE and NSE stock exchange from this article. NSE stands for NaAtional Stock Exchange whereas the BSE stands for Bombay Stock Exchange. BSE is one of the oldest stock exchanges in Asia, while NSE has more trading volume compared to BSE.
The evolution of the stock exchanges in India has enabled the share market to emerge as a regulated, systematic market which provides investors and companies a platform to trade equities and derivatives instruments in an efficient manner.
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A portfolio is a grouping of assets owned to achieve financial goals inspired by childhood lessons. Think back to those family outings when our clever father distributed money into different pockets. The message was clear: spreading wealth reduces risk. This principle carries great weight in the world of investments.
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Fully diluted shares represent the maximum number of shares a company could have in circulation if all the options and bonds that can be converted into shares are actually converted. This gives a clearer picture of the company's potential future share count and its impact on things like earnings per share and ownership stakes. Understanding fully diluted shares is important for investors because it helps them assess the company's true value and the potential dilution of their ownership. We will cover in more detail about their position in the evolving financial market.
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