|
|
|
|
|
|
|
What is currency trading?
|
Currency trading is the act of buying and selling international currencies. Very often, banks and financial trading institutions engage in the act of currency trading. Individual investors can also engage in currency trading, attempting to benefit from variations in the exchange rate of the currencies. The currency market the currency trading (FOREX) market is the biggest and the fastest growing market in the world economy. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover. Every day more than U.S. $3 trillion in currencies change hands in a highly professional inter bank market, in which electronic trading platforms link currency traders from banks across the world directly. FX markets are effectively open 24 hours a day thanks to global cooperation among currency traders. At the end of each business day in Asia, traders pass their open currency positions on to their colleagues in Europe, who – at the end of their business day – pass their open positions on to American traders, who just begin their working day and pass positions on to Asia at the end of their business day. And there, the circle begins anew. This makes FX truly global and very liquid.
Currency terminology
Exchange rate
The exchange rate is a price - the number of units of one nation’s currency that must be surrendered in order to acquire one unit of another nation’s currency.
Various terminologies in currency market:
Spot price: The price at which a currency trades in the spot market. In the case of USD/INR, spot value is T + 2.
Futures price: The price at which the futures contract trades in the futures market.
Contract cycle: The currency futures contracts on the SEBI recognized exchanges have one-month, two-month, and three-month up to twelve-month expiry cycles. Hence, these exchanges will have 12 contracts outstanding at any given point in time.
Final settlement date: The last business day of the month will be termed the Value date/ Final Settlement date of each contract.
Expiry date: It is the date specified in the futures contract. All contracts expire on the last working day (excluding Saturdays) of the contract months. The last day for the trading of the contract shall be two working days prior to the final settlement date or value date.
Contract size: In the case of USD/INR it is USD 1000; EUR/INR it is EUR 1000; GBP/INR it is GBP 1000 and in case of JPY/INR it is JPY 100,000. ( Ref. RBI Circular: RBI/2009-10/290, dated 19th January, by which RBI has allowed trade in EUR/INR, JPY/INR and GBP/INR pairs.)
Basis: Basis can be defined as the futures price minus the spot price. In a normal market, basis will be positive. Futures prices normally exceed spot prices.
Cost of carry: The relationship between futures prices and spot prices can be summarized in terms of what is known as the cost of carry. This measures (in commodity markets) the storage cost plus the interest that is paid to finance or ‘carry’ the asset till delivery less the income earned on the asset. For currency derivatives carry cost is the rate of interest.
Initial margin: The amount that must be deposited in the margin account at the time a futures contract is first entered into is known as initial margin.
Marking-to-market: In the futures market, at the end of each trading day, the margin account is adjusted to reflect the investor's gain or loss depending upon the futures closing price which is known as marking-to-market.
A foreign exchange deal: Its always been done in currency pairs, for example, US Dollar – Indian Rupee contract (USD–INR); British Pound – INR (GBP-INR), Japanese Yen – U.S. Dollar (JPYUSD), U.S. Dollar – Swiss Franc (USD-CHF) etc. Some of the liquid currencies in the world are USD, JPY, EURO, GBP, and CHF and some of the liquid currency contracts are on USD-JPY, USD-EURO, EURO-JPY, USD-GBP, and USD-CHF.
Economic variables which affect foreign exchange market
Interest rates, inflation, and GDP numbers are the main variables; however other economic indicators such as unemployment rate, bop, trade deficit, fiscal deficit, manufacturing indices, consumer prices and retail sales amongst others. News and information regarding a country's economy can have a direct impact on the direction that the country's currency is heading in much the same way that current events and financial news affect stock prices, hence the importance of economic factors. The following eight economic factors will directly affect a currency's movements in the Forex market. Interest rates, inflation, and GDP numbers are the main variables; however other economic indicators such as unemployment rate, bop, trade deficit, fiscal deficit, manufacturing indices, consumer prices and retail sales amongst others.
News and information regarding a country's economy can have a direct impact on the direction that the country's currency is heading in much the same way that current events and financial news affect stock prices, hence the importance of economic factors.
|
|
|
Who can trade in Currency Futures markets in India?
|
| Any resident Indian or company including banks and financial institutions can participate in the futures market. However, at present, Foreign Institutional Investors (FIIs) and Non-Resident Indians (NRIs) are not permitted to participate in currency futures market.
|
|
|
Which currency pairs are listed?
|
Any currency can be traded on the international level. However, on the Multi Commodity Exchange (MCX- SX), only 4 major currencies are traded against the Indian Rupee.
- USDINR
- EURINR
- GBPINR
- JPYINR
|
|
|
Which are the Exchanges used?
|
The commonly used exchanges on the national level are - Multi Commodity Exchange (MCX- SX) National Stock Exchange (NSE) The most commonly used exchange on the international level - COMEX Who are the Regulators of the Market The currency market is regulated jointly by the Reserve Bank of India (RBI) and Securities & Exchange Board of India (SEBI).
|
Contract Specifications - FUTURES
|
|
SYMBOL
|
USDINR |
EURINR |
GBPINR |
JPYINR |
|
Market Type |
N |
N |
N |
N |
|
Instrument Type |
FUTCUR |
FUTCUR |
FUTCUR |
FUTCUR |
|
Unit of trading |
1-1 unit denotes 1000 USD. |
1-1 unit denotes 1000 EURO |
1-1 unit denotes 1000 POUND STERLING |
1-1 unit denotes 100000 JAPANESE YEN |
|
Tick size |
0.25 paise or INR 0.0025 |
|
Trading hours |
Monday to Friday : 9:00 a.m. to 5:00 p.m.
|
|
Contract trading cycle |
12 months trading cycle.
|
|
Last trading day |
Two working days prior to the last business day of the expiry month
|
|
Final settlement day |
Last working day (excluding Saturdays) of the expiry month. The last working day will be the same as that for Interbank Settlements in Mumbai.
|
|
Quantity Freeze |
10,001 or greater
|
|
|
|
What is Margin?
|
| Margin is a performance bond that insures against trading losses. Margin requirements in the FX marketplace allow you to hold positions much larger than the asset value of your account. Trading with Forex Capital Management includes a pre-trade check for margin availability, the trade is executed only if there are sufficient margin funds in your account. The Forex Capital Management trading system calculates cash on hand necessary to cover current positions, and provides this information to you in real time. If funds in your account fall below margin requirements, the system will close all open positions. This prevents your account from falling below your available equity, which is a key protection in this volatile, fast moving marketplace.
|
|
|
What are “short” and “long” positions?
|
| Short positions are taken when a trader sells currency in anticipation of a downturn in price. Making this move allows the investor to benefit from a decline. Long positions are taken when a trader buys a currency at a low price in anticipation of selling it later for more. Making these moves allows the investor to benefit from changing market prices. Remember! Since currencies are traded in pairs, every forex position inevitably requires the investor to go short in one currency and long in the other.
|
|
|
Mechanism?
|
To demonstrate how a move of one tick affects the price, imagine a trader buys a contract (USD 1000 being the value of each contract) at Rs. 52.2500. One tick move on this contract will translate to Rs. 52.2525 depending on the direction of market movement.
- Purchase price: Rs. 52.2500
- Price increases by one tick: + Rs. 00.0025
- New price: Rs. 52.2525
- Purchase price: Rs. 52.2500
- Price decreases by one tick: Rs. 00.0025
- New price: Rs. 52.2475
- The value of one tick on each contract is Rupees 2.50. So if a trader buys 5 contracts and the price moves up by 4 ticks, she makes Rupees 50.
- Step 1: 52.2600 – 52.2500
- Step 2: 4 ticks * 5 contracts = 20 points
- Step 3: 20 points * Rs. 2.5 per tick = Rs. 50
- (Note: please note the above examples do not include transaction fees and any other fees, which are essential for calculating final profit and loss)
Exporter XYZ is expecting a payment of USD 1,000,000 after 3 months. Suppose, the spot exchange rate is INR 48,0000 : 1 USD. If the spot exchange rate after 3-months remains unchanged, then XYZ will get INR 48,000,000 by converting the USD received from the export contract. If the exchange rate rises to INR 49,0000 : 1 USD, then XYZ will get INR 49,000,000 after 3 months. However, if the exchange rate falls to INR 47,0000 : 1 USD, then XYZ will get INR 47,000,000 thereby losing INR 1,000,000. Thus, XYZ is exposed to an exchange rate risk, which it can hedge by taking an exposure in the futures market.
By taking a short position in the futures market, XYZ can lock-in the exchange rate after 3-months at INR 48,0000 per USD (suppose the 3 month futures price is Rs. 48). Since a USD-INR futures contract size is of 1000 USD, XYZ has to take a short position in 1000 contracts. Whatever may be the exchange rate after 3-months, XYZ will be sure of getting INR 48,000,000. A loss in the spot market will be compensated by the profit in the futures contract and vice versa. This can be explained as under:
|
If USD strengthens and the exchange rate becomes INR 49,0000 : 1 USD |
If USD weakens and the exchange rate becomes INR 47,0000 : 1 USD |
Spot Market:
XYZ will get INR 49,000,000 by selling 1 million USD in the spot market.
Futures Market:
XYZ will lose INR (48 – 49)* 1000 = INR 1000 per contract. The total loss in 1000 contracts will be INR 1,000,000.
Net Receipts in INR:
49 million – 1 million = 48 million
|
Spot Market:
XYZ will get INR 47,000,000 by selling 1 million USD in the spot market.
Futures Market:
XYZ will gain INR (48 – 47)* 1000 = INR 1000 per contract. The total gain in 1000 contracts will be INR 1,000,000.
Net Receipts in INR:
47 million + 1 million = 48 million
|
|
|
|
|
|
|
|
Who can open a securities trading account with MSFL?
|
| Any Indian resident or Indian corporate can open an account with Mansukh for trading.
|
|
|
Can I start trading once my account is activated?
|
| Yes, you can start trading once your account is activated subject to the availability
of funds and securities in your trading account maintained with the member.
|
|
|
Do I need an email address in order to open an account with MSFL?
|
| No,but it is advisable to have your email id registered for easy and smooth communication.
|
|
|
How long does it take to open an account?
|
| It takes normally 3-4 working days to open an account provided documents submitted
are in order.
|
|
|
What documents are required to open an account?
|
To open an account, following documents are required to be submitted along with
filled up client registration form:
- Proof of Identity – Copy of PAN Card
- Proof of Address – Copy of any one of the following (Self Attested) Passport,
Ration card, Voter’s ID, Driving license, Electricity bill (not more than 2 months
old) , Landline Telephone Bill (not more than 2 months old), BankPass Book
- Bank Proof – Copy of Bank Pass Book or Personalized Cheque leaf (For Existing
Bank Account Holders Only) d. Two Passport size photographs (signed across by the
client)
|
|
|
What is POA in Demat account? Is it compulsory?
|
| Power of Attorney is authority give by demat account holder to some other entity
operate his demat account. POA is not compulsory for demat account holder.
|
|
|
I have submitted my application, what happens next?
|
| After submission of application, your account will open if application is valid,
once account is opened, Mansukh dispatches a welcome kit to its customers which
contains Welcome Letter, Information Brochures, etc. so that you do not face any
problem while operating your trading account. In case your application is not processed
because of any missing details,you will be contacted by our representative.
|
|
|
How do I get my user ID and password?
|
| The user id will be informed to you by way of sms on the same day on which account
is opened.Additionally,a welcome kit capturing your account opening details is sent
to you at your registered address.The passwords for back office and trading platform
if requested by you will be informed by way of email or sms.
|
|
|
If I have forgotten my password, what should I
do?
|
| One can request for the reset of his back office password by visiting our back office
available on www.moneysukh.com and by entering his user id in Forgot my user id
or password. For reset of his online trading password,you need to email our RMS
department at rms@moneysukh.com so that they can reset your password instantly and
mail it to you on your email id or sms to your mobile as per your request.
|
|
|
Where do I enter my Username/Login id & password
to logon to my trading account?
|
We offer multiple trading platforms designed according to clients requirements:
1.ALL MONEY----This is a browser based online trading system available on
our web site www.moneysukh.com. Enter your client id and password and enjoy hassle
free trading.
2.ODIN DIET----This is a software which needs to be installed on your computer
system and you can enter your client id and password to enjoy hassle free trading.
3. NOW----This is a browser cum software platform developed by National Stock
Exchange which allows trade in NSE-Cash and Derivatives Segment,NCDEX and Currency
Derivatives segment.
4.FOW---Fast Trade on Web is another browser based online trading system
which allows user to trade in NSE and BSE.
5.Mobile Trading—Mansukh brings you trading ease with mobile trading.Mobile
trading not only allows to keep a track of market movements but it also provides
facility to you to trade. All you need is to have Advanced GPRS activated on your
mobile. Currently mobile trading is available in NSE,NCDEX and NSE CD segment.
|
|
|
Which shares will I be able to buy and sell?
|
| You may buy/sell all shares that are traded in the dematerialized form on NSE &
BSE.
|
|
|
Do I get online confirmation of orders and trades?
|
| Yes, you get online confirmation of orders and trades - the status of any order
is updated on real-time basis in the Order Book. As soon as you place your order
they are validated by the system and sent to the exchange for execution. The entire
process is fully automatic and there are no manual interventions. You will also
receive an e-mail and sms confirming the trades executed at the end of the trading
day. Digitally signed contract notes will also be sent via e-mail for the orders
executed during the trading day.
|
|
|
Can I modify/cancel my order?
|
| Yes, you can modify or cancel an order any time before execution. You can do this
by accessing the Order Book page where you have the option to modify or cancel the
order. You would not be able to modify or cancel order if order has been sent to
exchange & confirmation is awaited.
|
|
|
Can I go short?
|
| You can go short in derivatives segment.But any short position in equity segment
will result in auction of short deliveries.
|
|
|
What is a contract note?
|
| Contract note is a statement of confirmation of trade(s) done on a particular day
for and on behalf of a client. A contract note is issued in the prescribed format
and manner, establishing a legally enforceable relationship between the member and
client in respect to the trades stated in that contract note.
|
|
|
What is a Stop Loss order?
|
A Stop loss order allows the client to place an order which gets activated only
when the market price of the relevant security reaches or crosses a threshold price
specified by the investor in the form of 'Stop Loss Trigger Price'. When a stop
loss trigger price (SLTP) is specified in a limit order, the order becomes one which
is conditional on the market price of the stock crossing the specified SLTP. The
order remains passive (i.e. not eligible for execution) till the condition is satisfied.
Once the last traded price of the stock reaches or surpasses the SLTP, the order
becomes activated (i.e. eligible for execution by being taken up in the matching
process of the exchange) and then on behaves like a normal limit order. It is used
as a tool to limit the maximum loss on a position.
Examples:
STOP LOSS BUY ORDER: 'A' short sells Reliance shares at 325 in expectation
that the price will fall. However, in the event the price rises above his buy price
'A' would like to limit his losses. 'A' may place a limit buy order specifying a
Stop loss trigger price of 345 and a limit price of 350. The stop loss trigger price
(SLTP) has to be between the last traded price and the buy limit price. Once the
market price of Reliance breaches the SLTP i.e. 345, the order gets converted to
a limit buy order at 350.
STOP LOSS SELL ORDER: 'A' buys Reliance at 325 in expectation that the price
will rise. However, in the event the price falls, 'A' would like to limit his his
losses. 'A' may place a limit sell order specifying a Stop loss trigger price of
305 and a limit price of 300. The stop loss trigger price has to be between the
limit price and the last traded price at the time of placing the stop loss order.
Once the last traded price touches or crosses 305, the order gets converted into
a limit sell order at 300.
IMPORTANT: Please note that in a buy order the SLTP cannot be less than the
last traded price. This is treated as a normal order because the condition that
the last traded price should exceed the stop loss trigger price for a buy order
is already satisfied. Similary, in case of a stop loss sell order the SLTP should
not be greater than the last traded price for the same reason.
|
|
|
I buy a share, how will the payment be made and
how will I get the shares?
|
| You need to make an online fund transfer or NEFT or RTGS or issue a cheque in favour
of the member so as to facilitate you to buy shares.On receipt of securities from
the exchange the securities can be transferred to your dmat account on your request.
|
|
|
What is an auction?
|
| An auction is a mechanism utilised by the exchange to fulfil its obligation towards
the buying trading members. Thus, in case for a settlement, the selling trading
members have delivered short, their deliveries are bad or they have not rectified
the company objection reported against them, the exchange purchases the requisite
quantity from the market and gives them to the original buying member.
|
|
|
What does expiry mean?
|
| The day on which an options or futures contract is no longer valid and, therefore,
ceases to exist.
|
|
|
Which positions are squared off in the expiry?
|
| Only Futures & options positions are squared off in the expiry.
|
|
|
What is meant by Intra-Day Mark to Market process? Is it run for all positions?
|
| Mark-to-market margins (MTM) are payable based on closing prices at the end of each
trading day. These margins will be paid by the buyer if the price declines and by
the seller if the price rises. This margin is worked out on difference between the
closing/clearing rate and the rate of the contract (if it is entered into on that
day) or the previous day's clearing rate. The Exchange collects these margins from
buyers if the prices decline and pays to the sellers and vice versa.
|
|
|
What other resources will the site offer me to
help in taking smarter online investment decisions?
|
We Will Provide you With This Following Facilities:
Market Talks , Market Monitor , Research Reports , International Indices , Market
Movers in NSE\ BSE , Stocks recommendations.
|
|
|
How secure are my transactions?
|
| Your transactions are perfectly secure.You need to keep your password secret and
change it on frequent basis. All trading data is transferred over secure channel.
|
|
|
I am finding the site slow?
|
| You can always contact your branch or regional office or our head office in case
you are finding difficulty to execute your order because of speed of internet at
your end. We maintain connectivity through multiple ISP and if need be our It team
shall guide you to change the server to which you can connect.
|
|
|
What do I need to do to trade through the CallNTrade®
facility?
|
| This facility is enabled for all users where by they can call our branches and trade
subject to their available margin with us.This facility is especially useful for
those of our customers who are on the move or prefer to trade over phone. Our executives
will take your orders and place them on your behalf after due verification.
|
|
|
Is there any specific timing during which I can
avail of the facility?
|
| You may avail of this facility between 9 am to 6 pm at any of our branches and upto
the closure of market at our head office.
|
|
|
What numbers can I call on?
|
| The contact number of our branches are available on our web site. You may call our
head office at 011-30211860-861 for placement of orders in equity and currency segment
and at 011-30211864-865 for placement of orders in commodities segment.
|
|
|
What is "Call Auction in Pre-open Session”?
|
| In a Call Auction market, orders are pooled in the order book but remain unexecuted
till the end of the order entry period, when the orders will get matched and get
executed at the single call auction price that is so determined. At the call, all
buy orders are aggregated into a downward sloping demand function and all sell orders
are aggregated in an upward sloping supply function. The market opening price and
quantity traded are derived based on aggregated supply and demand for the underlying.
The orders that trade and the price and quantity at which they trade, are set by
multilateral matching, rather than by the sequence of bilateral matching used to
determine trades in a continuous normal market.
|
|
|
I have been placing orders early at the time of
opening of markets, how does this change impact me?
|
| You can place orders in the normal trading session which would now start from 9.15
a.m onwards. However, you can place orders in pre-open enabled scrips from 9.00
a.m. onwards in the pre-open session which would be between 9.00 a.m. upto 9.08
a.m. where orders would directly go to exchange and get accumulated in the pre-open
session. These accumulated orders of the pre-open session would get traded between
9.08 to 9.12 a.m. at the discovery price, if they get a match. In other scrips if
you want your orders to be placed directly in the exchange then you would need to
place orders in the normal trading session which would start form 9.15 a.m. onwards.
|
|
|
What would happen to my pending unexecuted orders
in pre-open session? In which products can I
place orders for pre-open session?
|
| In case of pending unexecuted orders in pre-open session, they shall be shifted
to the order book of the normal market session. All the unmatched market orders
would be converted to limit orders at the discovery price as discovered in the pre-open
session and carried forward to the normal trading session. All unmatched limit orders
of pre-open session would remain at the limit price specified by you and would be
carried forward to normal trading session. At present, you can place orders for
pre-open session only in Cash product under Equity segment. All other segments and
products like Derivatives (Futures & Options), Margin, MarginPLUS etc. would
have only the normal trading session starting from 9.15 a.m. onwards.
|
|
|
What is a portfolio tracker? What’s its advantage?
|
Portfolio Tracker is a premium online stock & mutual fund tracking utility from
Mansukh. The PT provides you with several tools that enable you to analyze your
portfolio and track its movements even during trading hours. Advantages: -
- The tracker's ease-of-use makes stock tracking easier than ever before.
- You can log on as many times as you like. Add multiple portfolios, scrips, calculate
tax...at the click of a button.
- You can set email alerts for both your equity and mutual fund portfolios.
- You can SMS alerts for both your equity and mutual fund portfolios.
- The service is always available, reliable and accessible. Access your portfolio
whenever you like.
|
|
|
I am an existing client of MSFL. Do I have to
get a new client code for trading in Currency Derivatives?
|
| No, you have to sign the form for currency trading & you can do the trade in
currency with your current code.
|
|
|
What is Mansukh Research SMS and what does it
contain?
|
| In this service we provide you that research tips for equity, commodity and currency
markets. We give the tips with well tested SMS system which delivers the calls to
you instantly so that you get enough time to enter the trade and achieve all the
targets given in the call. Tips are the result of core research and analysis of
our technical team and help you to grab a huge profit.
|
|
|
Who can subscribe to this service?
|
| Anyone who is existing client of Mansukh can subscribe to this service.
|
|
|
What is Trade Confirmation SMS?
|
| You receive a SMS for your trades executed in form of net position in equities segment
and in form of open position in derivatives segment.
|
|
|
What is alert for client services?
|
| Mansukh Securities has brought Alert for Clients Service for its customers to remain
informed and connected with the stock market while on move. Through this clients
can get conditional based on price trends, Periodic Alerts, Market Open and Market
Close Alerts.
|
|
|
|
|
|
|
|
|
|
|
What is IPO?
|
| IPO stands for Initial Public Offer. An IPO is open selling of securities of a company by the company itself for subscription by the public at large. When a company wants to raise money, one of the ways it can do so is by selling its equity shares to the public. When the company comes out with the issue for the first time, an IPO. Once an IPO is offered to public at large, it is subsequently subscribed and after the end of subscription period, it gets listed on the stock exchanges. After the IPO, the shares get listed on the stock exchange and shareholders can trade their shareholdings on the exchanges. If you have the resources, can gather information, analyze the risk and rewards involved in an investment opportunity and take an informed decision, it is best advised to invest in an IPO.
|
|
|
Why Invest in IPO?
|
Investing in IPO makes a lot of sense as owning a share of a company is like owning a part of the company where you would be considered as a share holder and would be involved in company decisions as a shareholder. If you get to own a part of a company at a price which is the best possible price than buying in secondary market and be one of the first share holders of the company; why not utilize the opportunity. Besides this, you don't even need to follow up daily for a favorable price at which you would like to buy the share.
Reasons for listing
When a company lists its shares on a public exchange, it will almost invariably look to issue additional new shares in order at the same time. The money paid by investors for the newly-issued shares goes directly to the company. An IPO, therefore, allows a company to tap a wide pool of stock market investors to provide it with large volumes of capital for future growth. The company is never required to repay the capital, but instead the new shareholders have a right to future profits distributed by the company and the right to a capital distribution in case of a dissolution. The existing shareholders will see their shareholdings diluted as a proportion of the company's shares. However, their capital investment will make their shareholdings more valuable in absolute terms. In addition, once a company is listed, it will be able to issue further shares via a rights issue, thereby again providing itself with capital for expansion without incurring any debt. This regular ability to raise large amounts of capital from the general market, rather than having to seek and negotiate with individual investors, is a key incentive for many companies seeking to list.
Benefits of being a public company
- Bolster and diversify equity base.
- Enable cheaper access to capital.
- If there were no uncertainties, there would be no need for insurance.
- Exposure and prestige.
- Attract and retain the best management and employees.
- Facilitate acquisitions.
- Create multiple financing opportunities.
Company registration
The first step a company should take in order to become publicly traded includes registration with the Securities and Exchange Commission (the SEC). After this a public offering is prepared, which should include a company's prospectus and other legal documents that are required by the SEC. Every potential investor has the right to receive a company's prospectus. The latter represents a legal and accounting document, which explains in detail the situation in the company, including information about the senior staff, majority stockowners and the potential risks the company faces.
|
|
|
Basis of Allotment
|
Basis of Allocation is a document publishes by registrar of an IPO to stock exchanges and IPO investors. This document provides information about final price fixed for an IPO, issue subscription (bidding) information or demand of an IPO and share allocation ratio.
There are two types of Public Issues
|
ISSUE TYPE
|
OFFER PRICE |
DEMAND |
PAYMENT |
RESERVATIONS |
|
Fixed Price Issues |
Price at which the securities are offered and would be allotted is made known in advance to the investors |
Demand for the securities offered , and at various prices, is available on a real time basis on the BSE website during the bidding period. |
100 % advance payment is required to be made by the investors at the time of application. |
50 % of the shares offered are reserved for applications below Rs. 1 lakh and the balance for higher amount applications. |
|
Book Building Issues |
A 20 % price band is offered by the issuer within which investors are allowed to bid and the final price is determined by the issuer only after closure of the bidding. |
Demand for the securities offered is known only after the closure of the issue |
10 % advance payment is required to be made by the QIBs along with the application, while other categories of investors have to pay 100 % advance along with the application. |
50 % of shares offered are reserved for QIBS, 35 % for small investors and the balance for all other investors. |
|
|
|
More about Book Building?
|
Book Building is essentially a process used by companies raising capital through Public Offerings-either Initial Public Offers (IPOs) or Follow-on Public Offers (FPOs) to aid price and demand discovery. It is a mechanism where, during the period for which the book for the offer is open, the bids are collected from investors at various prices, which are within the price band specified by the issuer. The process is directed towards both the institutional as well as the retail investors. The issue price is determined after the bid closure based on the demand generated in the process.
The Mechanism:
- The Issuer who is planning an offer nominates lead merchant banker(s) as 'book runners'.
- The Issuer specifies the number of securities to be issued and the price band for the bids.
- The Issuer also appoints syndicate members with whom orders are to be placed by the investors.
- The syndicate members input the orders into an 'electronic book'. This process is called 'bidding' and is similar to open auction.
- The book normally remains open for a period of 5 days.
- Bids have to be entered within the specified price band.
- Bids can be revised by the bidders before the book closes.
- On the close of the book building period, the book runners evaluate the bids on the basis of the demand at various price levels.
- The book runners and the Issuer decide the final price at which the securities shall be issued.
- Generally, the numbers of shares are fixed; the issue size gets frozen based on the final price per share.
- Allocation of securities is made to the successful bidders. The rest get refund orders.
|
|
|
Folklore about IPO investment
|
Investing in IPO is a sure shot way to earn profits in short term - It can be true in good times but not in bad times. When there are volumes in the market, performance is at its peak, usually IPOs get oversubscribed and there's huge anticipation of a good opening. This leads to a high listing price which is more than the subscription price and thus gives you better returns on your investment even in short term.
It is better to invest in secondary market than invest in IPO - Many investors consider this to be true but this is a subjective matter which does not implies the same for everyone. Some investor's may find it interesting to investing to IPO while others may find it more convenient to invest in secondary market than invest in IPO because of the fact that your money gets blocked for about a month with no surety of getting an allotment. It is all dependent on an individuals comfort level and thus there's no thumb rule for the same.
Before you actually invest your funds into an IPO, gather knowledge as to the where abouts of the issue, promoters, past performance of the company which has come out with such issue, how is the allotment likely to take place and the risk - reward involvement in the same. In a bid issue, bid at a price you think is appropriate for the IPO Whenever it is a bid issue, do your own analysis and come to a conclusion as to what should be the right price of the IPO. Don't bid for the issue as per what other people are bidding. Sometimes an issue can be over priced than its actual worth and you may end up shelling more money than needed to acquire the same. Don't put all your money into an IPO as your money gets blocked for a certain period of time which may extend up to a month. If you would require the money invested fro some other purpose, you may not be able to utilize it till the time settlement for the same has been done. Hence, don't all your surplus money into an IPO.
|
|
|
What is a FPO?
|
FPO stands for Follow on Public Offer. When a company raises capital either through fresh issue of securities to the public or an offer for sale to the public, through an offer document after an IPO has already been made, shares of the company are held by public and already listed on the stock exchange; it is called a FPO.
|
|
|
|
|
|
|
|
|
|
|
|
What is Mutual Fund?
|
| A Mutual Fund is a professionally managed collective investment that pools money from many investors and invests the same in stocks, bonds, short-term money market instruments and other securities. The mutual fund itself is a trust registered under the Indian Trust Act, and is initiated by a sponsor. The sponsor then appoints an asset management company (AMC) to manage the investment, marketing, accounting and other functions pertaining to the fund. Every mutual fund has a fund manager who invests the money collected through subscription from different investors on behalf of the investors by buying / selling stocks, bonds etc. Various funds and schemes with different objectives can be introduced under the umbrella of a single Trust name. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders. The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.
|
|
|
What is the history of Mutual Funds in India and role of SEBI in mutual funds industry?
|
Unit Trust of India was the first mutual fund set up in India in the year 1963. In early 1990s, Government allowed public sector banks and institutions to set up mutual funds.
In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives of SEBI are – to protect the interest of investors in securities and to promote the development of and to regulate the securities market. As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital market. The regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors.
All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. There is no distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. The risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar type.
Trading mutual funds on stock exchanges – what the investor needs to know SEBI has recently allowed registered stockbrokers to transact mutual fund units on behalf of their clients through the stock exchange mechanism. The market regulator has now allowed mutual funds to be traded on stock exchanges so that more investors can access them and have a basket of various categories of securities to get assured of maximum returns. When the systems are in place there are a few points the investor has to consider while investing in mutual funds through Stock Exchanges (NSE and BSE).
- Existing mutual fund investors who intend to buy more units will also benefit as this system will allow them to keep track of all investments under a single statement.
- Investors can hold units of mutual fund schemes in dematerialized form. Buying and selling will become more efficient and transparent , particularly if investors choose to transact through a demat account.
- Though cost seems to be a factor for those who do not have a demat account, the impact will be minimal for those who already are demat account holders.
- End users can use the convenience of their neighboring broker’s office for their mutual fund transactions.
- In reduces the clutter of paperwork and speedy execution.
Mutual fund glossary
Prospective The prospectus is a legal document that includes information about the mutual fund, terms of the offer, the issuer, and its objectives. The information in the prospectus is usually lengthy, packed with tables and graphs, and written in technical and legal language. This document is provided to help you make an informed investment decision before you invest in a mutual fund.
Investment objective A short statement of the fund's investment objectives. Some funds intend to achieve short-term growth while others might focus on long-term stability.
Investment strategy Exactly how the fund plans to accomplish the objectives. This section describes the types of assets that the fund purchases.
Fees and expenses Although mutual funds aim to make money for their investors, their ultimate goal, just like any other business, is to make money for themselves. In order to do so, funds charge their shareholders a variety of fees and expenses, all of which must be documented in the prospectus. A table at the front of every prospectus contains a breakdown of the different fees and expenses, along with a hypothetical projection of how the fees would impact a $10,000 investment over a 10-year period. This enables you to compare fees and expenses across mutual funds.
Risks The level of risk that the fund takes and the risks that are associated with the specific investments made by the fund are one of the most important sections in the prospectus.
Performance Information about the fund's performance over the last 10 years is included. Investors should be aware that past performance is not necessarily an indicator of future results. As important is how well the fund has traditionally performed compared to an index, such as the S&P 500. A fund's performance is also related to the fund's volatility, dividend payments, and turnover.
Management The names the managers and some additional information about their experience and qualifications is reported. It can be helpful to know whether or not they have managed other funds in the past and their success or failure in order to get a sense of their past strategies and results.
|
|
|
What is Net Asset Value (NAV) of a scheme?
|
| The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day to day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis - daily or weekly - depending on the type of scheme.
|
|
|
What are the different types of mutual fund schemes?
|
Schemes according to Maturity Period:
A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period.
Open-ended Fund/ Scheme
An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.
Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.
Schemes according to Investment Objective:
A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows:
Growth / Equity Oriented Scheme
The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.
Income / Debt Oriented Scheme
The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.
Balanced Fund
The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds.
Money Market or Liquid Fund
These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.
Gilt Fund
These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes.
Index Funds
Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme.
There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.
|
|
|
What are sector specific funds/schemes?
|
| These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.
|
|
|
What are Tax Saving Schemes?
|
| These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme.
|
|
|
What is a Fund of Funds (FoF) scheme?
|
| A scheme that invests primarily in other schemes of the same mutual fund or other mutual funds is known as a FoF scheme. An FoF scheme enables the investors to achieve greater diversification through one scheme. It spreads risks across a greater universe.
|
|
|
What is a Load or no-load Fund?
|
A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs.10. If the entry as well as exit load charged is 1%, then the investors who buy would be required to pay Rs.10.10 and those who offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit. The investors should take the loads into consideration while making investment as these affect their yields/returns. However, the investors should also consider the performance track record and service standards of the mutual fund which are more important. Efficient funds may give higher returns in spite of loads.
A no-load fund is one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.
|
|
|
Can a mutual fund impose fresh load or increase the load beyond the level mentioned in the offer
documents?
|
| Mutual funds cannot increase the load beyond the level mentioned in the offer document. Any change in the load will be applicable only to prospective investments and not to the original investments. In case of imposition of fresh loads or increase in existing loads, the mutual funds are required to amend their offer documents so that the new investors are aware of loads at the time of investments.
|
|
|
What is a sales or repurchase/redemption price?
|
The price or NAV a unit holder is charged while investing in an open-ended scheme is called sales price. It may include sales load, if applicable.
Repurchase or redemption price is the price or NAV at which an open-ended scheme purchases or redeems its units from the unit holders. It may include exit load, if applicable.
|
|
|
What is an assured return scheme?
|
Assured return schemes are those schemes that assure a specific return to the unit holders irrespective of performance of the scheme.
A scheme cannot promise returns unless such returns are fully guaranteed by the sponsor or AMC and this is required to be disclosed in the offer document.
Investors should carefully read the offer document whether return is assured for the entire period of the scheme or only for a certain period. Some schemes assure returns one year at a time and they review and change it at the beginning of the next year.
|
|
|
Can a mutual fund change the asset allocation while deploying funds of investors?
|
| Considering the market trends, any prudent fund managers can change the asset allocation i.e. he can invest higher or lower percentage of the fund in equity or debt instruments compared to what is disclosed in the offer document. It can be done on a short term basis on defensive considerations i.e. to protect the NAV. Hence the fund managers are allowed certain flexibility in altering the asset allocation considering the interest of the investors. In case the mutual fund wants to change the asset allocation on a permanent basis, they are required to inform the unit holders and giving them option to exit the scheme at prevailing NAV without any load.
|
|
|
How to invest in a scheme of a mutual fund?
|
Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of the new schemes. Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services. Now a days, the post offices and banks also distribute the units of mutual funds. However, the investors may please note that the mutual funds schemes being marketed by banks and post offices should not be taken as their own schemes and no assurance of returns is given by them. The only role of banks and post offices is to help in distribution of mutual funds schemes to the investors.
Investors should not be carried away by commission/gifts given by agents/distributors for investing in a particular scheme. On the other hand they must consider the track record of the mutual fund and should take objective decisions.
|
|
|
Can non-resident Indians (NRIs) invest in mutual funds?
|
| Yes, non-resident Indians can also invest in mutual funds. Necessary details in this respect are given in the offer documents of the schemes.
|
|
|
How much should one invest in debt or equity oriented schemes?
|
| An investor should take into account his risk taking capacity, age factor, financial position, etc. As already mentioned, the schemes invest in different type of securities as disclosed in the offer documents and offer different returns and risks. Investors may also consult financial experts before taking decisions. Agents and distributors may also help in this regard.
|
|
|
How to fill up the application form of a mutual fund scheme?
|
| An investor must mention clearly his name, address, number of units applied for and such other information as required in the application form. He must give his bank account number so as to avoid any fraudulent encashment of any cheque/draft issued by the mutual fund at a later date for the purpose of dividend or repurchase. Any changes in the address, bank account number, etc at a later date should be informed to the mutual fund immediately.
|
|
|
What should an investor look into an offer document?
|
| An abridged offer document, which contains very useful information, is required to be given to the prospective investor by the mutual fund. The application form for subscription to a scheme is an integral part of the offer document. SEBI has prescribed minimum disclosures in the offer document. An investor, before investing in a scheme, should carefully read the offer document. Due care must be given to portions relating to main features of the scheme, risk factors, initial issue expenses and recurring expenses to be charged to the scheme, entry or exit loads, sponsor’s track record, educational qualification and work experience of key personnel including fund managers, performance of other schemes launched by the mutual fund in the past, pending litigations and penalties imposed, etc.
|
|
|
When will the investor get certificate or statement of account after investing in a mutual fund?
|
| Mutual funds are required to dispatch certificates or statements of accounts within six weeks from the date of closure of the initial subscription of the scheme. In case of close-ended schemes, the investors would get either a demat account statement or unit certificates as these are traded in the stock exchanges. In case of open-ended schemes, a statement of account is issued by the mutual fund within 30 days from the date of closure of initial public offer of the scheme. The procedure of repurchase is mentioned in the offer document.
|
|
|
How long will it take for transfer of units after purchase from stock markets in case of close-ended
schemes?
|
The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV).
According to SEBI Regulations, transfer of units is required to be done within thirty days from the date of lodgment of certificates with the mutual fund.
There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.
|
|
|
As a unit holder, how much time will it take to receive dividends/repurchase proceeds?
|
A mutual fund is required to dispatch to the unit holders the dividend warrants within 30 days of the declaration of the dividend and the redemption or repurchase proceeds within 10 working days from the date of redemption or repurchase request made by the unit holder.
In case of failures to dispatch the redemption/repurchase proceeds within the stipulated time period, Asset Management Company is liable to pay interest as specified by SEBI from time to time (15% at present).
|
|
|
Can a mutual fund change the nature of the scheme from the one specified in the offer document?
|
| Yes. However, no change in the nature or terms of the scheme, known as fundamental attributes of the scheme e.g. structure, investment pattern, etc. can be carried out unless a written communication is sent to each unit holder and an advertisement is given in one English daily having nationwide circulation and in a newspaper published in the language of the region where the head office of the mutual fund is situated. The unit holders have the right to exit the scheme at the prevailing NAV without any exit load if they do not want to continue with the scheme. The mutual funds are also required to follow similar procedure while converting the scheme form close-ended to open-ended scheme and in case of change in sponsor.
|
|
|
How will an investor come to know about the changes, if any, which may occur in the mutual fund?
|
There may be changes from time to time in a mutual fund. The mutual funds are required to inform any material changes to their unit holders. Apart from it, many mutual funds send quarterly newsletters to their investors.
At present, offer documents are required to be revised and updated at least once in two years. In the meantime, new investors are informed about the material changes by way of addendum to the offer document till the time offer document is revised and reprinted.
There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.
|
|
|
How to know the performance of a mutual fund scheme?
|
The performance of a scheme is reflected in its net asset value (NAV) which is disclosed on daily basis in case of open-ended schemes and on weekly basis in case of close-ended schemes. The NAVs of mutual funds are required to be published in newspapers. The NAVs are also available on the web sites of mutual funds. All mutual funds are also required to put their NAVs on the web site of Association of Mutual Funds in India (AMFI) www.amfiindia.com and thus the investors can access NAVs of all mutual funds at one place
The mutual funds are also required to publish their performance in the form of half-yearly results which also include their returns/yields over a period of time i.e. last six months, 1 year, 3 years, 5 years and since inception of schemes. Investors can also look into other details like percentage of expenses of total assets as these have an affect on the yield and other useful information in the same half-yearly format.
The mutual funds are also required to send annual report or abridged annual report to the unit holders at the end of the year.
Various studies on mutual fund schemes including yields of different schemes are being published by the financial newspapers on a weekly basis. Apart from these, many research agencies also publish research reports on performance of mutual funds including the ranking of various schemes in terms of their performance. Investors should study these reports and keep themselves informed about the performance of various schemes of different mutual funds.
Investors can compare the performance of their schemes with those of other mutual funds under the same category. They can also compare the performance of equity oriented schemes with the benchmarks like BSE Sensitive Index, S&P CNX Nifty, etc.
On the basis of performance of the mutual funds, the investors should decide when to enter or exit from a mutual fund scheme.
|
|
|
How to know where the mutual fund scheme has invested money mobilized from the investors?
|
The mutual funds are required to disclose full portfolios of all of their schemes on half-yearly basis which are published in the newspapers. Some mutual funds send the portfolios to their unit holders.
The scheme portfolio shows investment made in each security i.e. equity, debentures, money market instruments, government securities, etc. and their quantity, market value and % to NAV. These portfolio statements also required to disclose illiquid securities in the portfolio, investment made in rated and unrated debt securities, non-performing assets (NPAs), etc.
Some of the mutual funds send newsletters to the unit holders on quarterly basis which also contain portfolios of the schemes.
|
|
|
Is there any difference between investing in a mutual fund and in an initial public offering (IPO) of a
company?
|
| Yes, there is a difference. IPOs of companies may open at lower or higher price than the issue price depending on market sentiment and perception of investors. However, in the case of mutual funds, the par value of the units may not rise or fall immediately after allotment. A mutual fund scheme takes some time to make investment in securities. NAV of the scheme depends on the value of securities in which the funds have been deployed.
|
|
|
If schemes in the same category of different mutual funds are available, should one choose a scheme
with lower NAV?
|
Some of the investors have the tendency to prefer a scheme that is available at lower NAV compared to the one available at higher NAV. Sometimes, they prefer a new scheme which is issuing units at Rs. 10 whereas the existing schemes in the same category are available at much higher NAVs. Investors may please note that in case of mutual funds schemes, lower or higher NAVs of similar type schemes of different mutual funds have no relevance. On the other hand, investors should choose a scheme based on its merit considering performance track record of the mutual fund, service standards, professional management, etc. This is explained in an example given below.
Suppose scheme A is available at a NAV of Rs.15 and another scheme B at Rs.90. Both schemes are diversified equity oriented schemes. Investor has put Rs. 9,000 in each of the two schemes. He would get 600 units (9000/15) in scheme A and 100 units (9000/90) in scheme B. Assuming that the markets go up by 10 per cent and both the schemes perform equally good and it is reflected in their NAVs. NAV of scheme A would go up to Rs. 16.50 and that of scheme B to Rs. 99. Thus, the market value of investments would be Rs. 9,900 (600* 16.50) in scheme A and it would be the same amount of Rs. 9900 in scheme B (100*99). The investor would get the same return of 10% on his investment in each of the schemes. Thus, lower or higher NAV of the schemes and allotment of higher or lower number of units within the amount an investor is willing to invest, should not be the factors for making investment decision. Likewise, if a new equity oriented scheme is being offered at Rs.10 and an existing scheme is available for Rs. 90, should not be a factor for decision making by the investor. Similar is the case with income or debt-oriented schemes.
On the other hand, it is likely that the better managed scheme with higher NAV may give higher returns compared to a scheme which is available at lower NAV but is not managed efficiently. Similar is the case of fall in NAVs. Efficiently managed scheme at higher NAV may not fall as much as inefficiently managed scheme with lower NAV. Therefore, the investor should give more weightage to the professional management of a scheme instead of lower NAV of any scheme. He may get much higher number of units at lower NAV, but the scheme may not give higher returns if it is not managed efficiently.
|
|
|
How to choose a scheme for investment from a number of schemes available?
|
| As already mentioned, the investors must read the offer document of the mutual fund scheme very carefully. They may also look into the past track record of performance of the scheme or other schemes of the same mutual fund. They may also compare the performance with other schemes having similar investment objectives. Though past performance of a scheme is not an indicator of its future performance and good performance in the past may or may not be sustained in the future, this is one of the important factors for making investment decision. In case of debt oriented schemes, apart from looking into past returns, the investors should also see the quality of debt instruments which is reflected in their rating. A scheme with lower rate of return but having investments in better rated instruments may be safer. Similarly, in equities schemes also, investors may look for quality of portfolio. They may also seek advice of experts.
|
|
|
Are the companies having names like mutual benefit the same as mutual funds schemes?
|
| Investors should not assume some companies having the name "mutual benefit" as mutual funds. These companies do not come under the purview of SEBI. On the other hand, mutual funds can mobilise funds from the investors by launching schemes only after getting registered with SEBI as mutual funds.
|
|
|
Is the higher net worth of the sponsor a guarantee for better returns?
|
| In the offer document of any mutual fund scheme, financial performance including the net worth of the sponsor for a period of three years is required to be given. The only purpose is that the investors should know the track record of the company which has sponsored the mutual fund. However, higher net worth of the sponsor does not mean that the scheme would give better returns or the sponsor would compensate in case the NAV falls.
|
|
|
Where can an investor look out for information on mutual funds?
|
Almost all the mutual funds have their own web sites. Investors can also access the NAVs, half-yearly results and portfolios of all mutual funds at the web site of Association of mutual funds in India (AMFI) www.amfiindia.com. AMFI has also published useful literature for the investors.
Investors can log on to the web site of SEBI www.sebi.gov.in and go to "Mutual Funds" section for information on SEBI regulations and guidelines, data on mutual funds, draft offer documents filed by mutual funds, addresses of mutual funds, etc. Also, in the annual reports of SEBI available on the web site, a lot of information on mutual funds is given.
There are a number of other web sites which give a lot of information of various schemes of mutual funds including yields over a period of time. Many newspapers also publish useful information on mutual funds on daily and weekly basis. Investors may approach their agents and distributors to guide them in this regard.
|
|
|
Can an investor appoint a nominee for his investment in units of a mutual fund?
|
| Yes. The nomination can be made by individuals applying for / holding units on their own behalf singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family, holder of Power of Attorney cannot nominate.
|
|
|
If mutual fund scheme is wound up, what happens to money invested?
|
| In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unit holders are entitled to receive a report on winding up from the mutual funds which gives all necessary details.
|
|
|
How can the investors redress their complaints?
|
Investors would find the name of contact person in the offer document of the mutual fund scheme whom they may approach in case of any query, complaints or grievances. Trustees of a mutual fund monitor the activities of the mutual fund. The names of the directors of asset Management Company and trustees are also given in the offer documents. Investors should approach the concerned Mutual Fund / Investor Service Center of the Mutual Fund with their complaints, If the complaints remain unresolved, the investors may approach SEBI for facilitating redressal of their complaints. On receipt of complaints, SEBI takes up the matter with the concerned mutual fund and follows up with it regularly. Investors may send their complaints to:
Securities and Exchange Board of India Office of Investor Assistance and Education (OIAE)
Exchange Plaza, “G” Block, 4th Floor,
Bandra-Kurla Complex,
Bandra (E), Mumbai – 400 051.
Phone: 26598510-13
|
|
|
What is the procedure for registering a mutual fund with SEBI?
|
An applicant proposing to sponsor a mutual fund in India must submit an application in Form A along with a fee of Rs.25,000. The application is examined and once the sponsor satisfies certain conditions such as being in the financial services business and possessing positive net worth for the last five years, having net profit in three out of the last five years and possessing the general reputation of fairness and integrity in all business transactions, it is required to complete the remaining formalities for setting up a mutual fund. These include inter alia, executing the trust deed and investment management agreement, setting up a trustee company/board of trustees comprising two- thirds independent trustees, incorporating the asset management company (AMC), contributing to at least 40% of the net worth of the AMC and appointing a custodian. Upon satisfying these conditions, the registration certificate is issued subject to the payment of registration fees of Rs.25.00 lacs For details, see the SEBI (Mutual Funds) Regulations, 1996.
Tips for investing in a mutual fund
Draw down your investment objective. There are various schemes suitable for different needs. This will explain the mandate and scope of investment. Whether the fund is equity or debt oriented, whether the fund will be multi-, large, mid- or small-cap specific, the level of diversification, the option to the fund manager to invest overseas and other such issues.
- Once you have decided on a plan or a couple of them, collect as much information as possible on them from different sources offering them through funds' prospectus and advisors.
- Pick out companies consistently performing above average. Mutual funds industry indices are helpful in comparing different funds as well as different plans offered by them.
- Get a clear picture of fees & associated cost, taxes (for non-tax free funds) for all your short listed funds and how they affect your returns. Best mutual funds have lower cost out go.
- Best mutual funds maximize returns and minimize risks. A number called as Sharpe Ratio explains whether a fund is risk free based on its expected returns compared against a risk free money market fund.
- Invest in funds that have the advantage of low minimum initial investments for building asset bases over a long period with small regular investments.
Don’ts
- Don't go by the past performance alone .
- Don't go by blindly by hearsay about the reputations of a fund. There are various rating agencies which index the mutual funds regularly based on multiple factors.
- Don't invest huge sums of money in a single fund or all the money in one go. Spread out your investments rationally.
- Don't chase a mutual fund because it is performing great in a bull run in the stock market. Once the market stagnates or the trend reverses these funds might crash.
- Don't compare a mutual fund across the category. While choosing a best one compare funds from the same category regardless of the promoting companies.
|
|
|
|
|
|
|
|
|
|
What is Investment?
|
| We all save money or at least try to do so. But keeping your money idle is like keeping it asleep. In order to take some advantage over the returns on your regular savings, you need to put it in some activity or venture that will give you more returns than just keeping your money idle. Hence, Investment is an outcome of your efforts to save for your future.
Investment helps you meet your longer term needs and financial goals. There is some level of risk attached to all types of investments and this is what determines the returns on your investments. The higher the risk, the greater the chances of a higher return. To start investing, you can take up investing ventures that carry less risk and give you decent returns.
|
|
|
Why to invest?
|
To put forward in simple terms we invest in order to create wealth. While investing is relatively painless, its rewards are plentiful. To understand why investment is necessary, we need to realize what we lose when we just save and do not invest. That is because the value of the rupee decreases every year due to inflation. For example, if you ran a household within a budget of Rs.10000 in 2000, to run the same household today (assuming the same set of expenses) you would probably need Rs 15,000. This means Rs15,000 is added to your budget because of inflation. Thus we need to generate an additional Rs15,000 and that can be possible only by INVESTING your hard-earned money. To sum up, we need to invest for the following reasons.
- To create wealth
- Earn a return on idle resources
- Make a provision for an uncertain future
- Generate a specified sum of money for a specific goal in life
- Meet the cost of inflation
|
|
|
What are the Options available for Investment?
|
| Physical assets like real estate, gold, commodities etc.
Financial assets like fixed deposits with banks, small savings instruments with post offices, insurance/provident/pension fund etc. or securities market related instruments like shares, bonds, debentures etc.
|
|
|
What is Equity / Stock ?
|
| A share or stock is also known as an equity share as well. The equity share basically represents ownership in the company. When a company needs capital or money to operate, it generates the required funds by selling ownership in the company. Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs 3,00,00,000 is divided into 30,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the company then is said to have 30,00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights.
|
|
|
Why do companies need to issue shares to public?
|
| Most companies are usually started privately by their promoter(s). Promoters’ capital ,borrowings from banks and financial institutions may not be sufficient for setting up or running the business over a long term. So companies invite the public to contribute towards the equity and issue shares to individual investors. A public issue is an offer to the public to subscribe to the share capital of a company. Once this is done, the company allots shares to the applicants as per the prescribed rules and regulations laid down by SEBI.
|
|
|
What are Different kinds of issues ?
|
Primarily, issues can be classified as a Public, Rights or Preferential issues (also known as private placements).
Initial public offering (IPO)- When an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves way for listing and trading of the issuer’s securities.
A follow on public offering (further issue) When an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document.
Rights issue- When a listed company which proposes to issue fresh securities to its existing shareholders as on a record date. The rights are normally offered in a particular ratio to the number of securities held prior to the issue. This route is best suited for companies who would like to raise capital without diluting stake of its existing shareholders.
Preferential issue- An issue of shares or of convertible securities by listed companies to a select group of persons under Section 81 of the Companies Act, 1956 which is neither a rights issue nor a public issue. This is a faster way for a company to raise equity capital. The issuer company has to comply with the Companies Act and the requirements contained in the Chapter pertaining to preferential allotment in SEBI guidelines.
|
|
|
What is Stock Market?
|
| A stock market is a market for the trading of publicly held company stock and associated financial instruments (including stock options, convertibles and stock index futures).
Many years ago, worldwide, buyers and sellers were individual investors and businessmen. These days markets have generally become "institutionalized"; that is, buyers and sellers are largely institutions whether pension funds, insurance companies, mutual funds or banks. This rise of the institutional investor has brought growing professionalism to all aspects of the markets. A stock market consists of few stock exchanges where the listing and trading takes place. All stock markets are regulated by some organization designated by the Govt.
|
|
|
How does a stock market function?
|
| A stock market has many members who co ordinate for various activities in the process of placing orders, their execution and settlement etc. A person who desires to buy / sell shares in the stock market, can place his order through the broker either in the traditional manner or can place an online order himself through the terminal provided by the broker.
When an order is placed, the order is sent to the exchange and then the order resides in the Exchange system till all conditions of the order have been met with. When the conditions of the order are fulfilled, the order is executed and the shares purchased / sold are delivered to the buyer / obtained from seller through the broker. The whole settlement process takes place through NSCCL (National Securities Clearing Corporation limited), the official clearing agent for the stock market in India.
|
|
|
Who are the main participants in the capital market?
|
The capital market framework consists of the following participants:
- Stock Exchanges
- Market intermediaries, such as stock-brokers and Mutual Funds
- Investors
- Regulatory institutions (e.g. SEBI)
|
|
|
Who regulates the stock market?
|
| In India, the stock markets are regulated by SEBI (Securities and Exchange Board of India). There are several stock exchanges in the country out of which the two most prominent exchanges are BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). The signature index for BSE is Sensex while for NSE, it is NIFTY.
|
|
|
Why should one invest in equities?
|
Equities have the potential to increase in value over time. It also provides portfolio with the growth necessary to reach long term investment goals. Research studies have proved that the equities have outperformed most other forms of investments in the long term. Equities are considered the most challenging and the rewarding, when compared to other investment options. Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment.
Average return on equities in India
Since 1990 till date, Indian stock market has returned more than 17% to investors on an average in terms of increase in share prices or capital appreciation annually. Besides that on average stocks have paid 1.5% dividend annually. Dividend is a percentage of the face value of a share that a company returns to its shareholders from its annual profits. Compared to most other forms of investments, investing in equity shares offers the highest rate of return, if invested over a longer duration.
|
|
|
How do I buy / sell shares?
|
| In order to buy / sell a share, you need to first become a client of one of the stock market members who are commonly known as stock brokers. But before you sign up with a stock broker / financial services provider, you need to understand the importance and sensitivity of the relationship between the stock broker and yourself so that you are familiar with the rules and regulations abiding in the relationship.
Once you have chosen your stock broker / financial services provider, you need to open an account with the same, get quotes for the share that you wish to buy and place orders either by calling up or online.
|
|
|
How can one acquire equity shares?
|
a. Primary market- IPO’s /private placements
b. Secondary market
Allotment in case of IPO
- Allotment of shares is made within 15 days of the closure of the issue.
- An investor must see the prospectus of the company that he is applying in which gives the information about the company, the project for which it is raising funds and its future potential.
One cannot buy directly from the market or stock exchange. A buyer has to buy stocks or equity through a Stock Broker, who is a registered authority to deal in equities of various companies. In effect a lot many intermediaries might come in between the buyer and seller, as brokers do their business through many sub-brokers and the like.
|
|
|
Glossary of financial markets:
|
BID and ASK price
The ‘Bid’ is the buyer’s price. It is this price that needs to be known when the stock has to be sold. Bid is the rate/price at which there is a ready buyer for the stock, which seller intends to sell. The ‘Ask’ is the price that needs to be known when stock has to be bought i.e. it is the rate/ price at which there is seller ready to sell his stock.
Face value of a share
The nominal or stated amount assigned to a security by the issuer is known as the face value of a share. It is the original cost of the share shown on the certificate. It is also known as par value or nominal value. For an equity share, the face value is usually a very small amount (Rs.5 or Rs.10)
Market value of a share
It is the price at which the share is traded in the stock exchange. The face value doesn’t have much bearing on the price
Secondary market
Secondary market provides a platform for buying and selling of securities that have already been issued. Stock markets (national and regional) deal in secondary market. One can invest in shares, government securities, derivative products, units of Mutual Funds through secondary market.
Portfolio
A Portfolio is a combination of different investment assets mixed and matched for the purpose of achieving an investor's goal(s). Items that are considered a part of portfolio can include any asset owned from shares, debentures, bonds, mutual fund units to items such as gold, art and even real estate etc
Diversification
It is a risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Diversification is possibly the best way to reduce the risk in a portfolio.
Delivery order
An order where shares are delivered into the client's demat account for settlement and they cannot be sold on the same day of order placement. Once can only sell such shares once their delivery has been received.
Intra day order
An order where shares are bought and sold on the same trading day and there is not delivery of shares into the client's demat account for settlement. For such orders, settlement is done on net payment basis where only monetary effect are given to the client's account.
Market Order
An order placed at current market price of a share in order to get instant execution of the order. This order is placed when an investor expects the share price to rise sharply and is thus keen on buying it. Such orders may get executed at market price when your order is placed but their can be some difference in the price at which your order was executed as there could be a price change while you placed your order.
Limit Order
An order that is placed to buy or sell a share with a price limit in it so that your order gets executed at a price level favorable to you. In a Buy order, limit has to be lesser than the current price and in sell order, it has to be more than the current price.
Stop Loss Order
An order that allows you to decide the maximum loss that you are ready to bear in intra day trading. As in intra day trading, you enter and exit the position within the same trading session, Stop Loss order is placed to safe guard against potential losses that may occur once your order is executed.
Circuit Filters
A circuit filter is a measure introduced by SEBI to determine fixed price bands for different securities within which they can move in a day. If there's any breach beyond / below these price bands, it will result in temporary halt in trading for those securities.
Circuit filters are based on the previous close price of the security and as previous close price of the same can be different on BSE and NSE; so can be the circuit filters.
Short selling
The concept of short selling simply means selling a share that you don't own. In short selling, an investor sells a share that he / she doesn't own but is expecting the price of the same to decline. It is generally practiced in intra day trading & FNO trading where the sell position is covered by buying a stock so that the net monetary benefit gets affected in the account and no delivery of shares is required.
|
|
|
How to make a good investment?
|
When you think of buying a stock, you must have some clarity as to why you are buying it, what advantages does the stock carry over others etc. Before you decide to buy a stock, do you own study on the stock as an investment opportunity, whether it is a growth or value stock, how is the company performing as compared to its peer group in the same industry and performance against the whole industry. If the company is performing at par with others in the same industry, try to find out about its management and whether they have some credentials to their benefit which are added advantage over the rest. Then gather information as to the kind of stock it is – growth or value. Try to compare the performance of corresponding industry and the company to check if the company’s performance is in line with that of the industry. If these criteria’s are met according to your expectation, it can prove to be a good investment pick.
Do's and Don'ts
Always consult a professional advice -In order to avoid any mistakes in your investment decisions, you should always consult a professional to plan out your investments and to get qualified investment advise. It is advisable to get a specialist' s help where you money matters are concerned.
Keep yourself updated - with latest market news If you are investing in equity, it is advised that you keep yourself updated about the latest market news as there are a lot of announcements that take place from day to day such as mergers, acquisition, dividends, Annual Meetings etc. This helps you to get a clue as to what is the effect of such news on your investments and what is the expected return from your investment.
Assess the extent of risk involved - Before you put your money in some share, try to access the extent of risk and rewards involved in that investment opportunity so that it doesn't turns out to be a loosing opportunity rather than a winning one. This will keep you informed as to what can be the impact of any adverse movement on your investment.
Undoubtedly, it is 'Don't put all your eggs in the same basket'. It is very tempting to make all your investment in the same sector when their stocks are going up, but since market trends are very volatile, you are, at the same time, making yourself extremely vulnerable to lose all your money. Dealing with single sector investment requires razor sharp timing with zero margin for error - a tall order in such a speculative and volatile business. Hence, it is always advisable to make investments in different companies and in different sectors, so that you can achieve stable portfolio diversification and compensate losses in one sector against profits in an another sector.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
What is a Commodity?
|
| The term 'commodity' includes all kinds of goods. FCRA defines 'goods' as 'every kind of movable property other than actionable claims, money and securities'. Futures' trading is organized in such goods or commodities as are permitted by the Central Government. At present, all goods and products of agricultural (including plantation), mineral and fossil origin is allowed for futures trading under the auspices of the commodity exchanges recognized under the FCRA. The national commodity exchanges have been recognized by the Central Government for organizing trading in all permissible commodities which include precious (gold and silver) and non-ferrous metals; cereals and pulses; raw jute and jute goods; sugar, gur, potatoes, coffee, rubber and spices, etc.
|
|
|
What are commodity futures?
|
Trading in commodity derivatives first started to protect farmers from the risk of the value of their crop going below the cost price of their produce. Derivative contracts were offered on various agricultural products like cotton, rice, coffee, wheat, pepper, etc.
Commodity futures contract is a contractual agreement between two parties to buy or sell a specified quantity and quality of commodity at a certain time in future at a certain price agreed at the time of entering into the contract on the commodity exchange.
Expiry date for different contracts can vary from one contract to another. In commodity derivatives, a buyer and a seller agree upon a price where the buyer is obliged to buy the commodity and the seller is obliged to deliver the commodity on the pre - specified date and price.
|
|
|
Why trade in commodity futures?
|
Commodities are natural resources used in day to day life . Unlike financial futures; commodity futures do not carry the risk of investors going bankrupt or declaring losses. Commodities have upper and lower price bands. i.e. Beyond a certain price level commodity prices cannot fall as the producers will stop its production and commodity prices cannot raise beyond a certain price level as people will look for availability of substitutes. Futures trading in commodities is transparent and facilitates fair price discovery on account of large scale participation of entities associated with different value chains and reflects views and expectations of wider section of people related to that commodity. This also provides effective platform for price risk management for all segments of players ranging from the producers, the traders, processors, exporters/importers and the end users of the commodity. In commodity futures, it is necessary to distinguish between investment commodities and consumption commodities. An investment commodity is generally held for investment purposes whereas consumption commodities are held mainly for consumption purposes. Gold and Silver can be classified as investment commodities whereas oil and steel can be classified as consumption commodities.
Commodity market in India
India has a long history of future trading in commodities. In India, trading in Commodity future has been existence from the 19th Century with organized trading in Cotton, through the establishment at Bombay Cotton Association Ltd. in 1875. Over a period of time, other commodities were permitted to be traded in future exchanges. Spot trading in India occurs mostly in regional mandis and unorganized market, which are fragmented and isolated. There were booming activities in this market at one time as many as 100 Unorganized exchanges were conducting forward trade in various commodities. The securities market was a poor competitor of this market as there were not many papers to be traded at that time. However, many feared that derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the market for the underlying commodities. As a result, after independence, commodity option trading and cash settlement of commodity future were banned in 1952. A further blow come in 1960’s when following several years of several droughts has forced many farmers to default on forward contact and even caused some suicides, forward trading was banned in many commodities considered primary or essential. Consequently, the commodities derivatives market dismantled and remained dormant for about four decades until the new millennium when the Govt. in a complete change in policy, started actively encouraging the commodity derivatives market. The year 2003 marked the real turning point in the policy frame work for commodity market when the government issued notifications for withdrawing all prohibitions and opening up forward trading in all commodities. This period also witnessed other reforms, such as, amendments to the Essential Commodities Act, Securities (contract) Rules, which have reduced bottlenecks in the development and growth of commodity markets of the country is total GDP, commodities related and dependent industries constitute about roughly 50-60% which itself cannot be ignored.
Commodity exchanges in India
To make up the loss of growth and development during the four decades of restrictive Govt. policies, FMC and the government encouraged setting up commodity exchanges using the most modern system and practices in the world. Some of the main regulatory measures imposed in the FMC include daily market to market system of margins, creation of trade guarantee fund, back office computerization for the existing single commodity exchanges , online trading for the new exchanges, demutualization for the new exchanges and one third representation of independent Directions the Board of existing Exchanges etc. National Level Commodity Exchanges in India are:-
- NCDEX : National Commodity Derivatives Exchange Ltd.
- MCX : Multi Commodity Exchange of India Ltd.
- NSEL : National Stock Exchange Ltd.
NCDEX (National Commodity & Derivates Exchange Ltd
NCDEX is a public limited co. incorporated on April 2003 under the Companies Act 1956, It obtained its certificate for commencement of Business on May 9, 2003. It commenced its operational on Dec 15, 2003. NCDEX is located in Mumbai and currently facilitates trading in 57 commodity mainly in Agro product.
NSEL (National Spot Exchange Limited)
National Spot Exchange Limited (NSEL) is a National level Institutionalized, Electronic, Transparent Spot trading platform which commenced its live operations on 15th Oct, 2008. At present NSEL is operational in 13 states, providing delivery based spot trading of 26 commodities.
MCX Multi Commodity Exchange of India Ltd
Headquartered in Mumbai, the exchange started operation in Nov, 2003. MCX is a demutalised nation wide electronic commodity future exchange. Set up by Financial Technologies (India) Ltd. permanent recognition from government of India for facilitating online trading, clearing and settlement operations for future market across the country. MCX is well known for bullion and metal trading platform.
MCX offers futures trading in
|
Metal
|
Aluminium, Copper, Lead, Nickel, Sponge Iron, Steel Long (Bhavnagar), Steel Long (Govindgarh), Steel Flat, Tin, Zinc
|
|
BULLION
|
Gold, Gold HNI, Gold M, i-gold, Silver, Silver HNI, Silver
|
|
FIBER
|
Cotton L Staple, Cotton M Staple, Cotton S Staple, Cotton Yarn, Kapas
|
|
ENERGY
|
Brent Crude Oil, Crude Oil, Furnace Oil, Natural Gas, M. E. Sour Crude Oil
|
|
SPICES
|
Cardamom, Jeera, Pepper, Red Chilli
|
|
PLANTATIONS
|
Arecanut, Cashew Kernel, Coffee (Robusta), Rubber
|
|
PULSES
|
Chana, Masur, Yellow Peas
|
|
PETROCHEMICALS
|
HDPE, Polypropylene(PP), PVC
|
|
OIL & OIL SEEDS
|
Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cotton Seed, Crude Palm Oil, Groundnut Oil, Kapasia Khalli, Mustard Oil, Mustard Seed (Jaipur), Mustard Seed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Rice Bran DOC, Rice Bran Refined Oil, Sesame Seed, Soymeal, Soy Bean, Soy Seeds
|
|
CEREALS
|
Maize
|
|
OTHERS
|
Guargum, Guar Seed, Gurchaku, Mentha Oil, Potato (Agra), Potato (Tarkeshwar), Sugar M
|
- Supply – Worlds leading producer of 17 Agri Commodities
- Demand – Worlds , major market of Bullion, Foodgrains, Edible oils, Fibers, Spicies and plantation crops.
- GDP Driver – Predominantly an AGRARIAN Economy
- Captive Market – Agro products produced and consumed locally
- Width and Spread – Over 30 major markets and 5500 Mandies
- Waiting to Explode – Value of production around Rs. 3,00,000 crore and expected futures market potential around Rs. 30,00,000 crore.
Regulator of commodity exchanges:
FMCL (Forward Market commission) headquarted in Mumbai, is regulation authority which is overseen by the minister of consumer affairs, food and public distribution Govt. of India, It is a statutory body set up in 1953 under the forward contract (Regulation) Act 1952.
|
|
|
Who are the players in the Commodity Market?
|
Investors in the commodities market fall into the following categories:
Hedgers: Hedgers enter into commodity contracts to be assured access to a commodity, or the ability to sell it, at a guaranteed price. They use futures to protect themselves against unanticipated fluctuations in the commodity's price.
Speculators: Speculators are participants who wish to bet on future movements in the price of an asset. Individuals, willing to absorb risk, trade in commodity futures as speculators. Speculating in commodity futures is not for people who are averse to risk. Unforeseen forces like weather can affect supply and demand, and send commodity prices up or down very rapidly. As a result of this leveraged speculative position, they increase the potential for large gains as well as large losses.
Arbitrageur: A type of investor who attempts to profit from price inefficiencies in the market by making simultaneous trades that offset each other and capture risk-free profits. Arbitrageurs constitute a group of participants who lock themselves in a risk-less profit by simultaneously entering into transactions in two or more contracts
|
|
|
How do Commodity prices move?
|
The following factors have an impact the commodity prices:
- Demand & Supply
- Natural Factors: Soil and climatic conditions, natural calamities etc.
- Government Policies - e.g. EXIM Policies like tariff rates, minimum support prices.
- Annual production, consumption and carry-over quantity of stocks.
- Economic policies and conditions.
- Interest Rates - e.g. hike in federal rates bring down the dollar, thereby increasing lucrative-ness of investment in precious metals.
|
|
|
What are the advantages of commodity future trading?
|
The commodity derivatives market is a direct way to invest in commodities rather than investing in the companies that trade in those commodities.
For example, an investor can invest directly in a steel derivative rather than investing in the shares of SAIL. It is easier to forecast the price of commodities based on their demand and supply forecasts as compared to forecasting the price of the shares of a company -- which depend on many other factors than just the demand -- and supply of the products they manufacture and sell or trade in.
The basic advantage of commodity future trading is for hedgers and for users of that commodity. A farmer may hedge his upcoming harvest at higher prices in the commodities markets to avoid any downfall in the market price in future while an automobile company may hedge its copper requirement at lower prices to secure its supply against any price rise in future. For an investor, it is an alternate investment class.
|
|
|
What are the commodity derivatives market timings?
|
| Monday to Friday: 10 am to 11.55 pm (Agri-commodities up to 5 p.m. only) Saturday: 10 am to 2 pm.
|
|
|
What are the pre requisites of commodity trading?
|
| One needs to open the commodity trading account with MANSUKH, which will enable the user to trade across the exchanges, namely MCX, NCDEX, National Spot Exchange, NCDEX-Spot and NMCE.
|
|
|
Do I need to take delivery of the commodity compulsorily every time I put a trade for it?
|
| No, taking delivery of commodity is not compulsory, but most of the commodities are settled by compulsory delivery. The investor who does not wishes to get in to deliveries can hold his positions from the first day of the contract till the specified last trade day. One has to proactively square off his positions well before the expiry of the contract. But if there is any open position at the expiry then it will be settled by delivery. (Delivery logic may differ commodity to commodity, please check the exchange product note for the delivery logic of specific commodity) Is there any no delivery period for commodities also as applicable in Equity trading? Unlike equities, commodities are not a dividend yielding assets, and there is no concept of book closures, so there is no concept of "No Delivery" period applicable to commodities. If one intends to participate in deliveries, the local sales tax requirements have to be fulfilled, or one can use the C&F agent services.
|
|
|
What is the normal settlement cycle for commodity trades?
|
| Unlike equity markets which have common settlement day for all the scripts traded on a particular day, the commodity markets do not have a common cycle. As per the customs and traditions in the market from where the base price of the commodity is derived; the settlement dates defer for each commodity. For example, the Gold contract on MCX trades along with the COMEX Gold, so it has a contract that expires every alternate month, at the same time the Agro commodities have different settlement date. (Please refer to the exchange websites for settlement dates of a specific commodity)
|
|
|
How are margin requirement, risk management and settlements treated in commodity trading?
|
There are 4 kinds of margins in commodity markets, the total margin is the sum of the following:
- Initial Margin - The margin required to initiate the position.
- Exposure Margin - The margin required to carry the position.
- Special Margin - Any special or additional margin imposed from time to time.
- Delivery Margin - Additional margin collected for a short time before the delivery to reduce any settlement risks.
Typically the broker may charge the same amount of margin as specified by the exchange or more, and all clients have to maintain all the above said margins.
Key factors for success of commodities market
Keep yourself updated and understand the circulars issued by the Commodity Exchanges You should be aware of the latest announcements made by the commodity exchanges and the circulars issued with regards to commodity trading so that you are not left out unaware and use the same to your advantage in commodity trading. Be aware of the rules and regulations of commodity trading If you are a first time investor in commodity, you should make sure that you are aware of the rules and regulations governing commodity trading so that you do not end up in a position which may not be favorable to your investment. Don't base your investment decision on some rumors If you have come across any news or rumor about a commodity, be careful about what you hear and the fact about the same. Find out the truth, fact supporting such news or rumor, analyze the opportunity as an investment opportunity and then invest in the same if you find it genuine enough and suitable to your risk profile. Don't trade in any commodity without knowing the specifications of any commodity contract.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
What are Derivatives?
|
The term "Derivative" indicates that it has no independent value, i.e. its value is entirely "derived" from the value of the underlying asset. The underlying asset can be securities, commodities, bullion, currency, live stock or anything else. In short, derivative is not an asset in itself but an agreement or a contract to transfer the real asset in future whenever exercised. The date and price of execution is mentioned in the contract as per agreement between the parties. There are varieties of derivatives available at present like futures, options and swaps; futures and options being the most common ones. They yield better returns with lower capital investment as compared to the amount that will be invested to buy the shares directly form the spot market.
The need for a derivatives market
The derivatives market performs a number of economic functions. They help in transferring risks from risk adverse people to risk oriented people. They help in the discovery of future as well as current prices. They catalyze entrepreneurial activity and increase the volume traded in markets because of participation of risk adverse people in greater number. They increase savings and investment in the long run.
Holder: Holder is the buyer of derivative agreement. By buying an agreement, the buyer may agree to buy or sell the underlying asset.
Seller: One who sells the contract to holder.
Types of derivatives products
Forwards
A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at today’s pre- agreed price.
Futures
A future contract is an agreement between two parties to buy or sell an asset a certain time in the future at a certain price. They are different from futures contract as they are standardized by the exchange .
Options
Options are of two types call and put. Call gives the buyer the right but not the obligation to buy a given quantity of the underlying asset at a future date at a pre determined price. Put give the seller the right but not an obligation to sell at a given price at a future date.
Warrants
Options generally have lives upto 1 year, majority of the options trade on the stock market have a maturity of up to 9 months. Longer traded options are called warrants and are generally traded over the counter.
Leaps
These are options having a maturity of up to 3 years.>
Basket
Basket options are options on portfolios of underlying assets. The underlying asset is usually a basket of asset.
Swaps
swaps are private agreement between two parties to share cash flows in the future on the basis of a pre determined formula. The two commonly used swaps are: 1. Interest rate swaps: These entail only swapping the interest related cash flows between two parties. 2. Currency swaps: these entail swapping both the principal and the interest rate between the two parties with cash flows in one direction being in a different currency than those in the opposite direction.
Factors driving the growth of financial derivatives
- Increased volatility in asset prices in financial markets,
- Increased integration of national financial markets with the international markets,
- Marked improvement in communication facilities and sharp decline in their costs,
- Development of more sophisticated risk management tools, providing economic agents a wider choice of risk management strategies, and
- Innovations in the derivatives markets, which optimally combine the risks and returns over a large number of financial assets leading to higher returns, reduced risk as well as transaction costs as compared to individual financial assets.
|
|
|
What is a Futures Contract?
|
Futures Contract means a legally binding agreement to buy or sell the underlying security on a future date. Future contracts are the organized/standardized contracts in terms of quantity, quality (in case of commodities), delivery time and place for settlement on any date in future. The contract expires on a pre-specified date which is called the expiry date of the contract.
On expiry, futures can be settled by delivery of the underlying asset or cash. Cash settlement enables the settlement of obligations arising out of the future/option contract in cash. However so far delivery against future contracts have not been introduced and the future contract is settled by cash settlement only.
FUTURES TERMINOLOGY
SPOT PRICE : The price at which an asset is traded in the spot market
FUTURES PRICE : The price at which a futures contract takes place in the futures market.
CONTRACT CYCLE: The period over which a contract trades. Contracts on NSE have a 1 month, 2 month and 3 month expiry cycles which expire on the last Thursday of the month. On the Friday following the last Thursday a new 3month expiry contract is issued.
EXPIRY DATE : The last date till which the contract can be executed beyond which the contract ceases to exist.
CONTRACT SIZE: The amount of assets that can be delivered under one contract.
BASIS: In the context of future basis can be defined as the difference between futures price and spot price.
INITIAL MARGIN: The amount that must be deposited into the margin account at the time when a futures contract is entered into is called initial margin.
MARKING TO MARKET: In the futures market at the end of each trading day the margin account is adjusted to see the days gain or loss depending on the futures closing price this is called marking to margin.
SQUARE OFF: Taking an opposite or close position of the initial position.
OPEN POSITIONS: The position is open and has not been squared off.
LIMIT: The purchasing power in each product. In other words how much you have allocated in that particular product for trading purpose.
LTP: It is the last traded price of the contract.
MAINTAINENCE MARGIN: This is somewhat lower than the initial margin this is to ensure that the balance in the margin account never becomes negative. If the margin account falls below the maintenance margin then the investor receives a margin call and is expected to top up the A/c till the initial margin before the trading begins the next day.
|
|
|
What is an Option contract?
|
Options Contract is a type of Derivatives Contract which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The buyer / holder of the option purchases the right from the seller/writer for a consideration which is called the premium. The seller/writer of an option is obligated to settle the option as per the terms of the contract when the buyer/holder exercises his right. The underlying asset could include securities, an index of prices of securities etc. Under Securities Contracts (Regulations) Act,1956 options on securities has been defined as "option in securities" means a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli, a put, a call or a put and call in securities.
Options are two types
- CALL
- PUT
Call option It gives the buyer, the right to buy the asset at a strike price. A call option is an option to buy a stock at a specific price on or before a Certain date. The seller or writer however has the obligation to sell the asset if the buyer of the call option decides to exercise his option to buy.
Put Option It gives the buyer a right to sell the asset at the ‘strike price’ to the buyer. Put options are options to sell a stock at a specific price on or before a certain date. The seller or writer however has the obligation to buy the asset if the buyer of the put Option decides to exercise his option to sell. These are like insurance policies. If you buy a new car and they auto insurance on the car, you pay a premium and are hence, protected if the asset is damaged in an accident. If this happens you use your policy to regain the value of the asset. So put options gains in value if the value of the asset decreases. With put option, you can insure a stock by fixing a selling price. If something happens which causes the asset price to fall and thus get damaged, you can exercise your option and sell it at its insured price level. The buyer has to pay an amount called as Premium for acquiring an additional right of having an option to exercise the contract or not.
Options terminology
INDEX OPTION: Options which have index as the underlying.
STOCK OPTION: stock option are option on individual stocks. The contract gives the holder the right to buy or sell the stocks at a specified price.
BUYER OF AN OPTION: The buyer of the option is one who by paying the option premium buys the right but not the obligation to exercise his option on the seller/writer.
WRITER OF AN OPTION: The writer of a call or put option is one who receives the option premium and is thereby obliged to sell/buy the asset if the buyer exercises on him.
CALL OPTION: This gives the holder the right to buy but not an obligation to buy a certain asset at a certain time at a certain price.
PUT OPTION: This gives the holder a right but not an obligation to sell at a fixed price at a future date.
OPTION PRICE/PREMIUM: The price that the option buyer pays the option seller.
STRIKE PRICE: The price specified in the options contract is the strike price or the exercise price.
AMERICAN OPTIONS: Options that can be exercised any time up to the expiry date.
EUROPEAN OPTIONS: European options are options that can be exercised at the expiry date only.
ITM (In the Money) OPTION: An ITM option is one that would lead to positive cash flows to the holder if it were exercised immediately. A call option on the index is said to be ITM if Strike price < Spot price. A put option is said to be ITM if the Strike price > Spot price.
AT THE MONEY (ATM) OPTION: The option that would lead to zero cash flows if exercised immediately.
i.e. spot price = strike price
OUT OF MONEY (OTM) OPTION : An option that would lead to –ve cash flows if exercised immediately.
COST OF CARRY: The relationship between futures price and spot price can be summarized as what is known as cost of carry. This measures the storage cost plus the interest that is paid to finance the asset less the income earned on it.
|
|
|
What are Index Futures and Index Option Contracts?
|
Futures contract based on an index i.e. the underlying asset is the index, are known as Index Futures Contracts. For example, futures contract on NIFTY Index and BSE-30 Index. These contracts derive their value from the value of the underlying index. Similarly, the options contracts, which are based on some index, are known as Index options contract. However, unlike Index Futures, the buyer of Index Option Contracts has only the right but not the obligation to buy / sell the underlying index on expiry. Index Option Contracts are generally European Style options i.e. they can be exercised / assigned only on the expiry date. An index, in turn derives its value from the prices of securities that constitute the index and is created to represent the sentiments of the market as a whole or of a particular sector of the economy. Indices that represent the whole market are broad based indices and those that represent a particular sector are sectoral indices.
In the beginning futures and options were permitted only on S&P Nifty and BSE Sensex. Subsequently, sectoral indices were also permitted for derivatives trading subject to fulfilling the eligibility criteria. Derivative contracts may be permitted on an index if 80% of the index constituents are individually eligible for derivatives trading. However, no single ineligible stock in the index shall have a weightage of more than 5% in the index. The index is required to fulfill the eligibility criteria even after derivatives trading on the index has begun. If the index does not fulfill the criteria for 3 consecutive months, then derivative contracts on such index would be discontinued. By its very nature, index cannot be delivered on maturity of the Index futures or Index option contracts therefore, these contracts are essentially cash settled on Expiry. Therefore index options are the European options while stock options are American options.
|
|
|
What is the regulatory framework of Derivatives markets in India?
|
With the amendment in the definition of 'securities' under SC(R)A (to include derivative contracts in the definition of securities), derivatives trading takes place under the provisions of the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992.
Dr. L.C Gupta Committee constituted by SEBI had laid down the regulatory framework for derivative trading in India. SEBI has also framed suggestive bye-law for Derivative Exchanges/Segments and their Clearing Corporation/House which lay's down the provisions for trading and settlement of derivative contracts. The Rules, Bye-laws & Regulations of the Derivative Segment of the Exchanges and their Clearing Corporation/House have to be framed in line with the suggestive Bye-laws. SEBI has also laid the eligibility conditions for Derivative Exchange/Segment and its Clearing Corporation/House. The eligibility conditions have been framed to ensure that Derivative Exchange/Segment & Clearing Corporation/House provide a transparent trading environment, safety & integrity and provide facilities for redressal of investor grievances. Some of the important eligibility conditions are-
- Derivative trading to take place through an on-line screen based Trading System.
- The Derivatives Exchange/Segment shall have on-line surveillance capability to monitor positions, prices, and volumes on a real time basis so as to deter market manipulation.
- The Derivatives Exchange/ Segment should have arrangements for dissemination of information about trades, quantities and quotes on a real time basis through atleast two information vending networks, which are easily accessible to investors across the country.
- The Derivatives Exchange/Segment should have arbitration and investor grievances redressal mechanism operative from all the four areas / regions of the country.
- The Derivatives Exchange/Segment should have satisfactory system of monitoring investor complaints and preventing irregularities in trading.
- The Derivative Segment of the Exchange would have a separate Investor Protection Fund.
- The Clearing Corporation/House shall perform full novation, i.e., the Clearing Corporation/House shall interpose itself between both legs of every trade, becoming the legal counterparty to both or alternatively should provide an unconditional guarantee for settlement of all trades.
- The Clearing Corporation/House shall have the capacity to monitor the overall position of Members across both derivatives market and the underlying securities market for those Members who are participating in both.
- The level of initial margin on Index Futures Contracts shall be related to the risk of loss on the position. The concept of value-at-risk shall be used in calculating required level of initial margins. The initial margins should be large enough to cover the one-day loss that can be encountered on the position on 99% of the days.
- The Clearing Corporation/House shall establish facilities for electronic funds transfer (EFT) for swift movement of margin payments.
- In the event of a Member defaulting in meeting its liabilities, the Clearing Corporation/House shall transfer client positions and assets to another solvent Member or close-out all open positions.
- The Clearing Corporation/House should have capabilities to segregate initial margins deposited by Clearing Members for trades on their own account and on account of his client. The Clearing Corporation/House shall hold the clients' margin money in trust for the client purposes only and should not allow its diversion for any other purpose.
- The Clearing Corporation/House shall have a separate Trade Guarantee Fund for the trades executed on Derivative Exchange / Segment. Presently, SEBI has permitted Derivative Trading on the Derivative Segment of BSE and the F&O Segment of NSE.
Participants in derivatives market
- Hedgers : Face risk associated with the price of an asset.
- Speculators : People who wish to bet on the future price movements.
- Arbitrageurs : Take advantage of the price discrepancy between two markets.
Hedging
Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations. Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge). The best way to understand hedging is to think of it as insurance. When people decide to hedge, they are insuring themselves against a negative event. This doesn't prevent a negative event from happening, but if it does happen and you're properly hedged, the impact of the event is reduced. So, hedging occurs almost everywhere, and we see it everyday. For example, if you buy house insurance, you are hedging yourself against fires, break-ins or other unforeseen disasters. Portfolio managers, individual investors and corporations use hedging techniques to reduce their exposure to various risks. In financial markets,hedging against investment risk means strategically using instruments in the market to offset the risk of any adverse price movements. In other words, investors hedge one investment by making another. Technically, to hedge you would invest in two securities with negative correlations. Hedging cannot help to escape the risk-return tradeoff. A reduction in risk will always mean a reduction in potential profits. Hedging is a technique not to make money but to reduce potential loss. If the investment hedged against makes money, then the profit would be reduced but if the investment loses money and the hedge is successful, it will reduce the loss.
Speculation
Speculation usually involves making assumptions that a particular stock price is going to change.
- Investors enter into a trade with the intention of ending it in the same settlement cycle.
- When they use the existing mechanisms of lending and borrowing to carry-forward their obligations to subsequent settlements.
- Having described it thus, it may be mentioned that speculation through borrowing and lending mechanisms is present in most markets.
Anything can lead to speculation. It can be based on some news or some global reaction. If a company reports consistent growth in net sales the stock price will be worth more and market reaction can drive it more. People may not know each and every product being sold but a close study of a company can give an estimate of where the companies sales are headed. The share value can increase or decrease on a given day due to thousands of reasons.
Arbitraging
"Arbitrage" trading is simply the trading of securities when the opportunity exists during the trading day, to take advantage of differences in value between the markets the trades are made within. Arbitrage trading takes place all day long on most days that the markets are active. Arbitrage is legally allowed. In fact arbitrage is responsible for a large part of the daily volumes on the NSE & BSE exchanges. What mainly takes place in India is called Market Arbitrage. Market Arbitrage involves purchasing and selling the same security at the same time in different markets (BSE & NSE) to take advantage of a price difference between the two separate markets. In perfect securities markets there would never be any arbitrage traders or trades. Since the securities markets are not perfect when news or other information moves a security or index they can and often do become unequal in price temporally. If the markets were perfect all identical securities would trade at the same value or price on each market they were traded on. A market arbitrageur would short sell the higher priced stock and buy the lower priced one. The profit is the spread between the two assets.
|
|
|
What are Market wide position limits for single stock futures and stock option Contracts?
|
Market wide position limits on Single Stock Derivative Contracts are as follows
The market wide limit of open position (in terms of the number of underlying stock) on futures and option contracts on a particular underlying stock is lower of
- 30 times the average number of shares traded daily, during the previous calendar month, in the relevant underlying security in the underlying segment,
Or
- 20% of the number of shares held by non-promoters in the relevant underlying security i.e. free-float holding.
This limit would be applicable on all open positions in all futures and option contracts on a particular underlying stock.
|
|
|
What measures have been specified by SEBI to protect the rights of investor in Derivatives Market?
|
The measures specified by SEBI include:
- Investor's money has to be kept separate at all levels and is permitted to be used only against the liability of the Investor and is not available to the trading member or clearing member or even any other investor.
- The Trading Member is required to provide every investor with a risk disclosure document which will disclose the risks associated with the derivatives trading so that investors can take a conscious decision to trade in derivatives.
- Investor would get the contract note duly time stamped for receipt of the order and execution of the order. The order will be executed with the identity of the client and without client ID order will not be accepted by the system. The investor could also demand the trade confirmation slip with his ID in support of the contract note. This will protect him from the risk of price favour, if any, extended by the Member.
- In the derivative markets all money paid by the Investor towards margins on all open positions is kept in trust with the Clearing House/Clearing corporation and in the event of default of the Trading or Clearing Member the amounts paid by the client towards margins are segregated and not utilised towards the default of the member. However, in the event of a default of a member, losses suffered by the Investor, if any, on settled / closed out position are compensated from the Investor Protection Fund, as per the rules, bye-laws and regulations of the derivative segment of the exchanges.
- In the derivative markets all money paid by the Investor towards margins on all open positions is kept in trust with the Clearing House/Clearing corporation and in the event of default of the Trading or Clearing Member the amounts paid by the client towards margins are segregated and not utilised towards the default of the member. However, in the event of a default of a member, losses suffered by the Investor, if any, on settled / closed out position are compensated from the Investor Protection Fund, as per the rules, bye-laws and regulations of the derivative segment of the exchanges.
- The Exchanges are required to set up arbitration and investor grievances redressal mechanism operative from all the four areas / regions of the country.
Remember, Derivatives are tools which can be used for hedging, speculation as well as trading. It is always advisable to take positions in derivatives with caution. Since the trader is required to give only margin, there is a tendency of overtrading which must be avoided. Overtrading may result in failure to pay margin call &/or MTM the outstanding position is liable to be squared up. Before trading it is necessary that the investor should go through the risk disclosure document carefully so that he is aware of the precautions to be taken in derivatives trading.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERVICES
|
TOOLS
|
MARKET INFO
|
RESEARCH
|
|
|
|
|
|