SWAPS
March 6th, 2014
A Swap is an agreement between two parties (the counterparties) to exchange a series of future cash flows at specified future times according to pre-specified conditions, typically with a notional principal and a stated maturity, often close to the ...
Differences between Forward and Future contracts
March 6th, 2014
Forward Futures Not standardized. They offer flexibility in terms of maturity date and contract amount, but they lack liquidity because there is no standard format. Standardized. They are for standard amounts and for standard maturity dates, usually the third ...
Forward Contracts
March 6th, 2014
A forward contract is an agreement to buy or sell an asset at a certain future time for a certain price. It can be contrasted with a spot contract, which is an agreement to buy or sell an asset ...
Options
March 6th, 2014
Options on stocks were first traded on an organized exchange in 1973. Since then there has been a dramatic growth in options markets. Options are now traded on many exchanges throughout the world. Huge volumes of options are also ...
Rights
March 6th, 2014
A security that gives the company’s shareholder the option, but not the obligation, to purchase a predetermined number of the company’s shares at a predetermined price (normally less than the current market price) in proportion to the number of ...
Warrants
March 6th, 2014
A warrant is a time-limited right to subscribe for shares, debentures, loan stock or government securities and is exercisable against the original issuer of the underlying securities. It is an interest and dividend-free securities, granting the holder the right ...
Bonds
March 6th, 2014
Bonds are negotiable debt instruments issued, in capital markets with the purpose of raising capital. Investors who acquire bonds are lenders to the issuers. Particularly, investors lend some amount of money, the principal, to the borrower. In return, the ...
Shares
March 6th, 2014
A share is an instrument (security) representing a shareholder’s rights in a company. A share is an equal portion in the capital of the company. It represents ownership interest in a firm. Investing in common shares involves all the ...
Derivatives
March 6th, 2014
Derivatives are financial contracts for which the price is derived from the value of one or more other instruments. These are called underlying(s) of the derivative and they can be equities, bonds, commodities or precious metals, or benchmarks such ...
Securities
March 6th, 2014
A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities, such as bonds and debentures, and equity securities, e.g. common stocks. The company or other entity issuing the security is called the ...
