...1.0 Introduction Asian equity markets are sizable, expanding and fast growing. Asia specific derivative market has hold nearly 40 percent of world capitalization in 2015 and having annual volume of 9.7 Billion. Markets in countries like Japan, Korea, Malaysia, China, India and Korea are also sizable. Indian, China and Malaysia were second tier exchange in derivative market but growing rapidly. 2.0 Development of Derivative Market 2.1 Malaysia Malaysia start joining the derivative market trading community in October of 1980’s with the launched of crude palm oil futures at Kuala Lumpur Commodity Exchange (KLCE). KLCE was known as the first futures exchange in Malaysia and all of Southeast Asia, established in 1980. In December of 1995, Kuala Lumpur Options and Financial Future Exchange (KLOFFE) were officially licensed as a futures and options exchange, and trading on in its flagship stock index futures. In December 1998, KLCE and Malaysia Monetary Exchange (MME) were merged to establish Commodity and Monetary Exchange of Malaysian (COMMEX). Shortly after, in January 1999, KLOFFE became subsidiary of Kuala Lumpur Stock Exchange (KLSE). In June 2001, KLOFFE merged with COMMEX and form Malaysian Derivative Exchange (MDEX). Later Bursa Malaysia Derivative Berhad has listed in 2005. 2.2 China In 1980’s the relevant department study abroad to prepare and actively preparing for China's futures market .The China Zhengzhou Grain Wholesale Market, was the first commodities futures...
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...calculus [show]Vector calculus [show]Multivariable calculus Calculus (Latin, calculus, a small stone used for counting) is a branch of mathematics focused on limits,functions, derivatives, integrals, and infinite series. This subject constitutes a major part of modernmathematics education. It has two major branches,differential calculus and integral calculus, which are related by the fundamental theorem of calculus. Calculus is the study of change,[1] in the same way that geometry is the study of shape and algebra is the study of operations and their application to solving equations. A course in calculus is a gateway to other, more advanced courses in mathematics devoted to the study of functions and limits, broadly called mathematical analysis. Calculus has widespread applications in science,economics, and engineering and can solve many problems for which algebra alone is insufficient. Historically, calculus was called "the calculus of infinitesimals", or "infinitesimal calculus". More generally, calculus (plural calculi) refers to any method or system of calculation guided by the symbolic manipulation of expressions. Some examples of other well-known calculi are propositional calculus, variational calculus, lambda calculus, pi calculus, andjoin calculus. Contents [hide] • 1 History o 1.1 Ancient o 1.2 Modern o 1.3 Significance o 1.4 Foundations • 2 Principles o 2.1 Limits and infinitesimals o 2.2 Differential calculus o 2.3 Leibniz notation o 2.4 Integral...
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...A PROJECT REPORT ON “Analysis of derivative segment (Future & Options Market) of capital market” SUBMITTED BY: RAVINDER SINGH NEGI NRS/011304 In the partial fulfillment of the requirement as per THE INSTITUTE OF COST AND WORKS ACCOUTANT OF INDIA Institute of Cost and Works accountant of India Delhi Office 3, Institutional Area Lodhi Road, New Delhi - 110003 Phones: 011-24622156, 24521492 Fax: 011-43583642, 24622156, 24618645 DECLARATION I hereby declare that the Project report has been prepared by me during the year 2011. In partial fulfillment of the requirement for the award of the degree of Institute of Cost and Works Accountant of India (NIRC). Ravinder Singh Negi Place:--New Delhi Date:--...
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...Derivatives Trading and Its Impact on the Volatility of NSE, India GEL : G10, G14, G20, G19 ABSTRACT This article examines the impact of introduction of financial derivatives trading on the volatility of Indian stock market (an emerging stock market). It examines the theme that the introduction of derivatives in the stock market in India would reduce the volatility (risk) in the stock market. NSE Nifty 50 index has been used as a proxy of stock market return. ARCH/GARCH technique has been employed in the analysis. The conditional volatility of interday market returns before and after the introduction of derivatives products are estimated with the (GARCH) model. The Finding suggests that derivatives trading has reduced the volatility. Executive Summary Derivatives trading in the stock market have been a subject of enthusiasm of research in the field of finance the most desired instruments that allow market participants to manage risk in the modern securities trading are known as derivatives. The derivatives are defined as the future contracts whose value depends upon the underlying assets. If derivatives are introduced in the stock market, the underlying asset may be anything as component of stock market like, stock prices or market indices, interest rates, etc. The main logic behind derivatives trading is that derivatives reduce the risk by providing an additional channel to invest with lower trading cost and it facilitates the investors to extend their settlement...
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...Derivative Market – A Case Study on NSE A Report Submitted as per the curriculum of the Master in Business Administration Under Biju Patnaik University of Technology, Rourkela, Orissa. By L Rama kumari Roll No.: 200960712 Regd. No.: 0906202013 [pic] March 2011 Under the Guidance of Mr. Shom Prasad Das NATIONAL INSTITUTE OF SCIENCE & TECHNOLOGY Palur Hills, Berhampur- 761008, Orissa, India DECLARATION I, L rama kumari, student of 2009-11 batch of NIST, Berhampur do here by declare that the report entitled “Derivative Market :A Case Study on NSE” that has been submitted by me as a partial fulfillment of the degree of MBA. This report is my own work and no part of this project has been ever submitted by me for any other purpose. I declare that the work has been carried out to the best of my knowledge and belief and according to my capacity and capability. Date: Place: L Rama kumari ACKNOWLEDGEMENT I would like to take this opportunity to thank all those individuals whose valuable contribution in a direct or indirect manner has gone into the making of this dissertation a tremendous learning experience for me. I take this privilege to express my heartfelt gratitude to our Hon. Director Prof. Sangram Mudali, Hon. Batch co-coordinator Mr.Chinmaya Sahu for encouraging doing this dissertation as a part of curriculum. I would like to express sincerely my deep...
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...1. Introduction The Global Derivatives Market how it is work a- Fundamentals and Market Characteristics 2.1 Basics of derivatives Derivatives are totally different from securities. They are financial instruments that are mainly used to protect against and manage risks, and very often also serve arbitrage or investment purposes, providing various advantages compared to securities. Derivatives come in many varieties and can be differentiated by how they are traded, the underlying they refer to, and the product type. Definition of derivatives A derivative is a contract between a buyer and a seller entered into today regarding a transaction to be fulfilled at a future point in time, for example, the transfer of a certain amount of US dollars at a specified USD-EUR exchange rate at a future date. Over the life of the contract, the value of the derivative fluctuates with the price of the so-called “underlying” of the contract – in our example, the USD-EUR exchange rate. The life of a derivative contract, that is, the time between entering into the contract and the ultimate fulfi llment or termination of the contract, can be very long – in some cases more than ten years. Given the possible price fluctuations of the underlying and thus of the derivative contract itself, risk management is of particular importance.1) Derivatives must be distinguished from securities, where transactions are fulfilled within a few days (Exhibit 1). Some securities have derivative-like characteristics...
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...Option Trading Strategies and Their Effectiveness in the Indian Market The project starts with introduction to: * Overview of Derivatives and mainly Options. * The working and mechanics of options and how they help in hedging and trading. * History of Options with respect to Global & Indian Markets. * The advantages of Options The project mainly aims to cover the conceptual and theoretical background of the study including option terminology, option payoffs, payoff profiles of long & short underlying & long and short call and put options followed by options theory, knowledge and outline of the various possible trading and hedging strategies with options that are widely known including : * When to use the strategy * Basic legs involved * Other derivatives/underlying used with the strategy * The payoff profile of the strategy * The risk and reward * Breakeven points and profit and loss analysis Some of the strategies intended to be covered are: Long Call, Short Call, Synthetic Long Call, Long Put, Short Put, Covered Call, Straddles, Strangles, Collars, Spreads, Butterflies and Condors The various strategies are individually analysed with the help of detailed examples and then further studied taking real life examples of hypothetical positions from past data of Indian Derivatives market, mainly from the historical data archives of NSE as given on website of NSE. (Preferably recent month expiry contracts) Drawing of...
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...their home Faculty. III. Requirements for Major Programmes Students are required to complete 60 credits of prescribed courses for each major as follows: (A) Majors offered by the School of Economics and Finance 1. Major in Economics (60 credits) Course code Course Credits Year 1 courses: 12 credits ECON1001 Introduction to economics I 6 ECON1002 Introduction to economics II 6 Year 2 and Year 3 courses: 48 credits ECON2101 Microeconomic theory or 6 ECON2113 Microeconomic analysis 6 ECON2102 Macroeconomic theory or Macroeconomic analysis ECON2114 ECONxxxx/ Year two/Year three courses listed in Economics 36 FINAxxxx or Finance electives Total: 60 2. Major in Finance (60 credits) Course code Course Year 1 courses: 18 credits BUSI1002 Introduction to accounting ECON1001 Introduction to economics I FINA1003 Corporate finance Year 2 and Year 3 courses: 42 credits ECON2101 Microeconomic theory or ECON2113 Microeconomic analysis FINA0301 Derivatives FINA2802 Investments and portfolio analysis ECONxxxx/ Year two/Year three courses listed in Economics FINAxxxx and Finance electives Total: Credits 6 6 6 6 6 6 24 60 Notes for Major in Finance: BUSI1002 Introduction to accounting can be taken in the...
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...Commodity Derivatives Market in India: Development, Regulation and Future Prospects Introduction The Indian economy is witnessing a mini revolution in commodity derivatives and risk management. Commodity options trading and cash settlement of commodity futures had been banned since 1952 and until 2002 commodity derivatives market was virtually nonexistent, except some negligible activity on an OTC basis. Now in September 2005, the country has 3 national level electronic exchanges and 21 regional exchanges for trading commodity derivatives. As many as eighty (80) commodities have been allowed for derivatives trading. The value of trading has been booming and is likely to cross the $ 1 Trillion mark in 2006 and, if all goes well, seems to be set to touch $5 Trillion in a few years. Chequred History The history of organized commodity derivatives in India goes back to the nineteenth century when the Cotton Trade Association started futures trading in 1875, barely about a decade after the commodity derivatives started in Chicago. Over time the derivatives market developed in several other commodities in India. Following cotton, derivatives trading started in oilseeds in Bombay (1900), raw jute and jute goods in Calcutta (1912), wheat in Hapur (1913) and in Bullion in Bombay (1920). However, many feared that derivatives fuelled unnecessary speculation in essential commodities, and were detrimental to the healthy functioning of the markets for the underlying commodities...
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...JPMorgan Chase I. Abstract The credit derivatives were introduced in the early 1990s, as large derivatives dealer searched for ways to transfer risk in financial markets. Although the financial innovations have only been used for decades, activity in credit derivations has grown rapidly. According to the Bank for International Settlement, the credit derivatives market reaches $21 trillion in 2014, and the main players for credit derivatives are investment banks, corporations or insurance companies. (Bank for International Settlement, 2014) Credit derivatives are relatively complex financial instrument, since it utilizes the leverage technique to mitigate the credit risk. One the one hand, credit derivatives allow banks to mitigate credit risk, reduce undesired risks and customize their risk profiles. On the other hand, the use of credit derivatives contains potential risks to the company since the market is still new. Users of credit derivatives must recognize and mange numerous associated risks. In fact, the historical evidence has shown that credit derivatives are the major causes to financial crisis. (Borodovsky & Lore, 2000) Although it is important to assess credit risk and market risk in the bank investment, operational risk is the fundamental part to the ultimate success of investment. “Operational risk is the risk of a breakdown in the operations of the derivatives program or risk management system.” (Chance & Brooks, 2012) Operational risk was generally defined...
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...3.0.1 International Business - University Assessment 100 Marks Course Content 1. Overview of the International Business Process 2. PEST factors affecting International Business 3. Government influence on trade 4. International Trade Theories 5. FDI 6. Country Evaluation and Selection 7. Collaborative Strategies 8. International Marketing 9. International Trade Agreements 10. International Trade Organizations 11. International HR Strategies . 12. International Diplomacy - . Reference Text 1. International Business - Daniels and Radebouqh 2. International Business - Sundaram and Black 3. International Business — Roebuck and Simon 4. International Business – Charles Hill 5. International Business— Subba Rao 3.0.2 Strategic management 100 Marks Course Content 1. Strategic Management Process: Vision. Mission, Goal Philosophy. Policies of an Organization. 2. Strategy, Strategy as planned action, Its importance, Process and advantages of planning Strategic v/s Operational Planning. 3. Decision making and problem solving. Categories of problems, Problem solving skill, Group decision making. Phases indecision making, 4. Communication Commitment and performance, Role of the leader, Manager v/s Leaders Leadership styles 5. Conventional Strategic Management v[s Unconventional Strategic Management. The Differences, Changed Circumstance. 6. Growth...
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...Option Pricing, Interest Rate Risk in U.S Diana PĂUN & Ramona GOGONCEA (2013). Interest Rate Risk Management and the Use of Derivative Securities. Economia Seria Management. Retrieved from: <http://www.management.ase.ro/reveconomia/2013-2/4.pdf> The study by these two authors aims at demonstrating how derivative financial instruments can be utilized to prudently manage interest rate risk majorly faced by numerous banks and financial institutions as well as enable the efficient application of monitoring and control tools. There are a couple of risk management methods at the disposal of banks including both balance sheet and off the balance sheet such as the gap method of managing interest rate risk for purposes of controlling short-term rates exposure, combined with derivatives such as options to manage the residual interest rate exposures. Interest rate risks emanate from interest rates sensitivity differentials of capital outflows and inflows. Due to the common view or misconception that high interest rates are the best way of fighting inflation, banks’’ engaging in monetary policy. Financial institutions play a major role in influencing interest rates since they engage in releasing capita to the public by buying assets in the primary markets and selling securities in the secondary market so as to fund purchase of assets. Furthermore, any interest-bearing asset for instance a loan or bond may face interest rate risk caused by changes in the value of assets resulting...
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...| The 2008-2009 Credit Crises Executive Summary The Great Depression was when America faced the worst economic catastrophe in history. It wasn’t until the nineties that the financial industry started to re-invent itself for the purpose of making more money. Banks became successful at modifying legislation and creating ventures that would profit investors. The level of risk involved with the securities produced was ignored. Initially, the securities that were built were not expected to fail. When the home loan industry began to breakdown it became clear that something needed to be done. Legislation that the financial industry was trying to avoid was necessary. The Dodd-Frank Act was enacted as a result. Introduction The financial industry is currently facing a number of challenges such as poor investment strategies, improper activities by lenders and poor ethical standards within investment companies. Over the last 3 years more than 200 financial institutions within the United States have ceased to exist because of the 2008-2009 credit crises. Restoring confidence in the financial environment has been an uphill battle since the credit crises began. Today banks that were not able to sustain operations are being acquired by others that are more stable which causes the long-standing institutions to become more risky. As a result the acquisitions are dramatically affecting the remaining banks and further weakening the finance industry. Banks have been searching...
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...| |[pic] | FS3032 – Capital Markets MODULE HANDBOOK 2014/15 - Semester 1 Module Lecturer: Dr Phan Tran Trung Dzung Faculty of Banking and Finance / FTU fandzung@ftu.edu.vn This module is supported by Weblearn – students are advised to access the site on a regular basis, at least once a week FS3032 Capital Markets |Teaching Location |A1101 | |Teaching Semester |1 | |Module Level |H | |Home Academic Department |LMBS | |Module Leader |Dr Phan Tran Trung Dzung | |Module Web Site |FS3032C | |Teaching Mode |Day | |Module Title |Capital Markets | |Timeslot | | |Credit Rating For Module |15 ...
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...STUDIES | Indian and Chinese Derivative Markets | A Comparative Analysis | Submitted to: Dr. Kumar BijoyBy: Anney Banderwal - 75112Larika Azad- 75130Ayushi Sharma- 751142/18/2014 | Contents Acknowledgement 3 Introduction 4 History and Evolution 4 Medieval Europe 5 A Major Step Forward 6 The New World 7 The Computer Age 8 India 8 China 10 Comparative Study 12 Exchanges and Instruments 12 Regulatory Aspects 14 India 14 China Regulatory Framework 19 Conclusion 26 Bibliography 27 Acknowledgement We would like to take this opportunity to thank all those who have helped us in completing this project report. First of all we would like to thank our teacher Dr. Kumar Bijoy for guiding us throughout this project. Then we would like to thank our parents for their immense support. In the end we would like to thank GOD almighty for giving us strength to complete this project. Introduction A derivative is a financial contract which derives its value from the performance of another entity such as an asset, index, or interest rate, called the "underlying". Derivatives are one of the three main categories of financial instruments, the other two being equities (i.e. stocks) and debt (i.e. bonds and mortgages). Derivatives include a variety of financial contracts, including futures, forwards, swaps, options, and variations of these such as caps, floors, collars, and credit default swaps. Most derivatives are traded over-the-counter (off-exchange)...
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