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Tag Archive: Derivative


Which Fund to Choose?

Mutual fund is still an untapped market in India, Although India has more than 50 AMC (Asset Management blogCompany) operating with more than 20,000 odd schemes.

When it comes to investing I always say that Equities have out-performed other investment asset classes over the long-term in India as well as globally. With growing maturity, retail Investors in India have begun to realize this and also take into stride the short-term volatility of this asset class. Better regulatory environment and improved corporate governance have also helped bring more investors to Equities.

Equity investing requires a lot more dedicated time, patience, skill and knowledge while people prefer to invest Continue reading

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Why Derivatives are so Hot

Recalling a chapter from Traders Guns and money Beautiful lies on sale side how derivatives are misinterpreted or mis-sold, It’s blog simple trying to figure out the hierarchy of the trading floor. There are Sales people – they lie to clients. Traders lie to sales and to risk managers. Risk managers ? they lie to people who run the place – a small correction they think they run the place. The people who run the place lie to shareholders and regulators 🙂

Few days back I did Derivatives derivatives so many, resembles outstanding derivatives with the top 5 banks of the world, here is some basic background for my non financial market friends about derivatives.  Continue reading

Very recently CME shared a paper on the famous OTC derivatives and their treatment under Extraterritoriality. Due to the role of imagesunregulated over-the-counter (OTC) financial derivatives in the 2008 financial crisis which began in the U.S. but whose influence was felt globally, the G-20 agreed in its Pittsburgh meeting in 2009 that “all standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012, at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements.”  Continue reading

imagesContinuing with our last blog, today we will discuss in detail about “Equity-Linked Swap” under Structured derivative class.

Meaning: A swap for which payments on one or both sides are linked to the performance of equities or an equity index. Sometimes used to avoid withholding taxes, obtain leverage, or enjoy the returns from ownership without actually owning equity.

Definition: An equity swap is a financial derivative contract (a swap) where a set of future cash flows are agreed to be exchanged between two counterparties at set dates in the future. Continue reading

imagesIn our last few posts we have talked a lot about simple derivatives with their detailed structure and the different approaches, they have towards market. Going onward, we will be discussing another complex form of derivatives known as structured derivative products. We will take up these products one by one separately in detail, within our new series of posts “School-To-College”.

In today`s post, we would be discussing what structured derivatives are all about, Continue reading

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