DB

INFY

620 pages

MSFT

fees and commission

70%

2 Classification of Financial Markets

1 assets

2 relationship with issuer

1 bn loss

10%

3 location

4 settlement

5 mode of operations

6 national and international securities

7 Private and Public markets

8 maturity

equity
no maturity
NA
NA
no maturity
dividends
NA
NA
NA

tax benefit

1M

10000 shares

ownership
limited liability
voting rights
dividends
higher returns
equity
Warrants
ADR
strike price
45
American depository receipts
stock price
40
2015 traded in NYSE/ Nasdaq
premium
0.5
5
ratio
1::10
exercise after 2 years
stock price10 warrants
30
-5
32
-5
FX Markets
35
-5
40
-5
45
-5
50
0
55
5
50

FX Marketsuniqueness of FX
bloomberg
reuter
1 24 hrs market
2 largest market
3 regulator trades

5 days
5.3 t usd / days
RBI
FED
export
Japan
export
china
import
india
4 pips
point in percentage
1.1256 6 pips
1 pip
119.19
1 pip
5 two curren euro/ usd
traded
bid
euro
base curre 1 unit
usd
variable
1 investor
2 investor
3 investor
4 investor

buy usd. Which rate considered

sell euro. Which rate considerd
buy 1 euro . Amount ??
buy 1 usd amount ???

0.0001
0.01
1.1256

1.1256

INTRODUCTION
1 why Financial Markets
2 Classification
3 Participants
Issuers
capital raised
capital

1 company
2 government
3 ind
4 Investment banks

valuation

money market s
credit card
bonds
loans
debt
borrowed money

equity
investments
ownership
shares
capital appreciation
share in net profits
dividends
Primary
secondary
issuer - investor relation investor - investors
raise capital
exit option
issue shares
stock exchange
first time
Initial Public offer
Over the counter
second/ third
secondary offering
Follow on Public Offer
NYSE
1999
2004 lit markets
IPO
FPO
formulae

flash trade

2009 1M shares

india

1930 SEC
1992 SEBI

exchange
1 counterparty party is not known
2 lit market ( trans. Market )
3 fixed time
4 more regulations
5 exchange platform
6 clearing corporation
7 no counter party risk
default risk
8 retail + institutions
9 margin
10 contracts with clearing corporation
11 less volumes
12 equity+bonds+futures+ options
13 standard
transfer of funds and seequity
SPOT
t+1
taiwan
t+2
indian/ germany
t+3
us
spot
FX
t+2
Bond

2008

t+0 - 5

equity
order
239
flexible

less liquid

us co raises capital in US
private equity
raise capital from institutions

OTC
illiquid
lock in period
amt
P/E industry
venture capital
Fixed deposits
agreement forms
terms and conditions
1 maturity
2 interest rate
3 penalty for pre- mature
4 principal amount
5 maturity amount
6 lock in FD
7 tax
8 auto renewal
9 no rating
10 cum
non cum
11 banks/corporates

notes
1- 10 years

tenure

issuer
investor

AAA/AA/A/BBB
BB/B/CCC/CC/C/D

actual
PBIT/I

GDR
global
LSE

uniqueness of FX

ETFs
Common shares
Exchange traded funds
commonly traded
gold etf
residual claim
2 27000/ 10 Mg
voting rights
28000 variable dividends
basket - IT sector
25%
index - sensex

economy linked
140
130 / usd
6.39 / usd

floating
fixed
65

1.1257
ask

110

67

Investors
institutions
retails

Structured Products

silver
gold
commodity

currency
FX

third
broker - institutions

fourth markets
institutions - institutions
merger / acquisitions

Alternate trading systems ( US )

Multi lateral trading facility
dark pools
High frequency trading
program trading
Algo trading

40 orders/ sec
70%

uk trading NYSE
current

45
42
39 buy

broker - dealer firm

broker

dealers

commission/ brokerage
execution for clients
agency trading
clients funds

profits
own account trading
prop. Trading
own funds

over the counter

counterparty is known
not a trans. Market
24 hrs - fx
less regulations
bloomberg/ reuters platforms
no clearing corporation
counterparty risk/ credit risk
institutions
no margin
contracts with counterparty
more trades/ volumes
fx+forwards+swaps+equity+bonds
customised

t+2 ( UK )
tom
t+1

SPAN
standard portfolio analysis of Risk
cash
t+0

fx
quote driven
market maker
rigid
buy rate
usd

pital in US

m institutions

65
liquid

US co raises capital in UK
foreign securities
IPO/
raise capital from retail+ institutions

stock exchange

www.financerendezvous.com/techoct1.xlsx
bonds
10 years +
indenture
covenants
term to maturity
maturity
coupon
call option
put options
price of bond ( today )
face value

2012 - 2022
7 years
10 years
interest rate
yield

tax benefits

discount rate

rating
zero coupon
coupon bearing bonds
government
IB
corporates
munis

investment grade - PF/ MF

junk/ speculative grade

yield to maturity
yield to call
current yield
realised yield

perf. Shares
less traded
preference over common shares in case of bankrupcy
no voting rights
fixed dividends
cum
participatory
20% additional
convertible into common shares

5%
10%

trading
clearing
settlement

pension funds
mutual funds
insurance co
banks
hedge funds

investment
profits
tax
liquidity
diversification
risk management

contract for diff

swaps
options
futures
forwards
derivatives

interest

structured products

broker

msft
nyse

arbitrage
nasdaq
38

buy
sell
14 Bn usd

38.25
sell

wall street

same time

1987

wall street

2010

margin call

cleared markets
OTC + clearing corporation
IRS / CDS
interest rate swaps/ Credit default swaps
2000 usd/ month

3 years

Dodd frank Act

1 M screens

FORWARD
t+1++++
t+2++++
t+3++++

CME
analysis of Risk

t+30 years
www.investing.com

sell rate

retail+ institutions

65.5

WWII

any bank raise capital in USD outside US

eurodollar securities
euro yen
euro pound

1999 euro
eurodollar bond
3%

money markets
<< 1 year
T BILL
REPO
COMMERCIAL PAPER
CERTIFICATE OF DEPOSITS
BANKER's ACCEPTANCE
LIBOR
0.0015813868
2.061%
0.00157889

issuer
government
institutions
corporates
banks
banks
banks

tenure
91/182/364
customised
270 days
6m/12m

28
365

0.130%
28
360

2.03%
1 bp

0.00010001

0.01%

Intermediaries
pension funds
mutual funds
insurance co
banks
hedge funds
brokers
stock exchange

2008 crisis

2010
2013- 2019

raise capital in USD outside US

r securities

issued at par / discount

at dicount
customised
at dicount
at par

28
365

min investment
1000
customised
100000
100000