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CAPITAL MARKET

Capital Market

  • MEANING OF OPEN INTEREST

    Open Interest also know as OI, is the total number of options and futures contracts that are not closed on a particular day. As you might be aware of volume in a particular stock in equity market, option trading involves the creation of a new option contract when a trade is placed. Open interest
    will tell you the total number of option contracts that are currently open.

    Open Interest is mostly used to confirm a trend for a particular futures contract, For eg, lets look at Reliance 1000 May CALL, the open interest might tell us that there have been 5 options open in the month of May, a trader might then wonder does this refer to the number of contracts bought
    or sold.

  • INFLATION & DEFLATION

    Cash inflation is an excessive increase in the money supply of a given economy, which results in a rise in the general level of prices over time. It may also refer to a rise in the prices of a specific set of goods or services. In either case, it is measured as the annualized percentage rate of change of a price index such as the CPI.

  • ARBITRAGEURS

    Arbitrage is the concept of simultaneous buying of securities in one market where the price is low and selling in another market where the price is higher.
    Arbitrageurs thrive on market imperfections. Arbitrageur is intelligent and knowledgeable person and ready to take the risk He is basically risk averse. He enters into those contracts were he can earn risk less profits. When markets are imperfect, buying in one market and simultaneously selling in other market gives risk less profit. Arbitrageurs are always in the look out for
    such imperfections.

  • SPECULATORS

    If hedgers are the people who wish to avoid price risk, speculators are those who are willing to take such risk. speculators are those who do not have any position and simply play with the others money. They only have a particular view on the market, stock, commodity etc. In short, speculators put their money at risk in the hope of profiting from an anticipated price change. Here if speculators view is correct he earns profit. In the event of speculator not being covered, he will loose the position. They consider variousfactors such as demand supply, market positions, open interests, economic fundamentals and other data to take their positions.

  • OPEN INTEREST

    Open Interest is the total number of outstanding contracts that are held by market participants at the end of the day. It can also be defined as the total number of futures contracts or option contracts that have not yet been exercised (squared off), expired, or fulfilled by delivery.

    Open interest applies primarily to the futures market. Open interest, or the total number of open contracts on a security, is often used to confirm trends and trend reversals for futures and options contracts.

  • MERCHANT BANKING

    Merchant Banks are a very important factor in the capital markets. They have a big role to play especially, in placing equity in the primary markets, through the Initial Public Offers route.

    Public money or savings play a vital role in financing many big projects. Thousands of crores are raised every year from the markets either through equity or debt from the market. The merchant banks play a crucial role in helping the corporates raise money from there markets.

  • FINANCIAL SYSTEM

    A financial system plays a vital role in the economic growth of a country. It intermediates with with the flow of funds between those who save a part of their income to those who invest in productive assets. It mobilizes and usefully allocate scarce resources of a country.

  • MONEY MARKET AND CAPITAL MARKET

    1. Often, financial institutions actively involved in the capital market and are also in the capital market. 2. Funds raised in the money market are used to provide liquidity for longer-term investment and redemption of funds raised in the capital market

  • MONEY MARKET

    A money market is a market for short term debt instruments (maturity below one year). It is highly liquid market wherein securities are bought and sold in large denominations, to reduce transaction costs. Call money market, certificate of deposits, commercial paper, and treasury bills are the major instruments/segments of the money market.

  • FINANCIAL MARKETS

    Financial markets are an important components of the financial system. A financial market is a mechanism for the exchange trading of financial products under a policy framework. The participants in the financial markets are the borrowers (issuers of securities), lenders (buyers of securities), and financial intermediaries. Financial markets comprises two distinct types of markets:

  • ANNUAL REPORT

    An annual report is a formal financial statement issued yearly by a corporate. The annual report shows assets, liabilities, revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit-wise during the year, as well as other information of interest to shareholders. Companies publish annual reports and send abridged versions to shareholders free of cost. A detailed annual report is sent on request.

  • Capital Market Scams

    The post- economic liberalization era witnessed scams with cyclical regularity in the Indian Capital market. The series of scams in the capital market may lead someone to believe that scams and liberalization are correlated phenomena. The most infamous scam, known as the 1992 securities was master-minded by Harshad Mehta and other bull operators

  • CREDIT RATING

    The system of rating got institutionalized following the Great Depression in 1933, when the US Controller of Currency enacted a rule that banks could only purchase securities, which have minimum investment rating.
    The need of credit rating is different for different parties depending on the benefits it offers to the various parties utilizing these services, viz., [...]

  • VENTURE CAPITAL

    Definition: Venture Capital means, providing seed, start up and first stage financing and funding the expansion of companies that have already demonstrated their business potential but do not have access to the public securities markets or to credit oriented institutional funding sources.
    Venture Capitalists also provide management/leveraged buyout financing. The processis of investing of risk capital [...]

  • INTRODUCTION TO CAPITAL MARKET

    Capital Market is generally understood as a market for long term funds and investments in long term instruments available in this market. However now this market also include short-term funds. Capital markets mean the market for all the financial instruments, short term and long term, as also commercial, industrial and government paper. The capital market [...]

  • PRIMARY MARKET

    The primary market is a place for the fresh issue of securities. Corporates, banks, FIIs and government can issue new securities and raise fund for investment purpose. This is typically done through a syndicate of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock [...]