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7/28/2019 Broking House
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INSTITUTE OF MANAGEMENT SCIENCE(LUCKNOW UNIVERSITY)
7/28/2019 Broking House
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A broker is an individual or party that arranges
transactions between buyers and sellers, and get
commission when the deal is executed.
A broker is an independent agent used extensively
in some industries or companies.
INSTITUTE OF MANAGEMENT SCIENCE(LUCKNOW UNIVERSITY)
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TYPES OF BROKERS :-
Agri broker
Commodity brokers
Stock brokers Aircraft broker
Auto broker
Real estate broker
Insurance brokers ect.
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1. ICICI DIRECT.COM 2. INDIA INFOLINE
3. KOTAK SECURITIES LTD. 4. SHARE KHAN
5. INDIABULLS 6. MOTILAL OSWAL
7. BAJAJ CAPITAL 8. SMC
9. ANGEL BROKING 10. RELIANCE MONEY
INSTITUTE OF MANAGEMENT SCIENCE(LUCKNOW UNIVERSITY)
http://www.icicidirect.com/http://www.indiainfoline.com/http://www.kotaksecurities.com/aboutus/index.htmlhttp://www.sharekhan.com/http://www.indiabulls.com/http://www.motilaloswal.com/history.htmhttp://www.bajajcapital.com/http://www.smcindiaonline.com/http://www.angelbroking.com/http://www.reliancemoney.com/index.aspxhttp://www.indiansharemarket.org/indias-top-10-stock-broking-house/http://www.indiansharemarket.org/indias-top-10-stock-broking-house/http://www.reliancemoney.com/index.aspxhttp://www.angelbroking.com/http://www.smcindiaonline.com/http://www.bajajcapital.com/http://www.motilaloswal.com/history.htmhttp://www.motilaloswal.com/history.htmhttp://www.motilaloswal.com/history.htmhttp://www.indiabulls.com/http://www.sharekhan.com/http://www.kotaksecurities.com/aboutus/index.htmlhttp://www.kotaksecurities.com/aboutus/index.htmlhttp://www.kotaksecurities.com/aboutus/index.htmlhttp://www.indiainfoline.com/http://www.indiainfoline.com/http://www.icicidirect.com/7/28/2019 Broking House
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1. CASH MARKET
2. FUTURES MARKET OR FUTURE
EXCHANGE
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
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Investors use these futures contracts to
hedge against foreign exchange risk
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
Hedging
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Currency futures can also be
used to speculate and, byincurring a risk, attempt to profit
from rising or falling exchange
rates.
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
Speculation
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A commodity broker is a firm or individual
who executes orders to buy or sell
commodity contracts on behalf of clients
and charges them a commission.
Commodity contracts include futures, options,
and similarfinancial derivatives.
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
Commodity broker
http://en.wikipedia.org/wiki/Commodity_markethttp://en.wikipedia.org/wiki/Commission_(remuneration)http://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Financial_derivativeshttp://en.wikipedia.org/wiki/Financial_derivativeshttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/Commission_(remuneration)http://en.wikipedia.org/wiki/Commodity_market7/28/2019 Broking House
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Types of commodity brokerFirms and individuals who are often collectively
called commodity brokers include:Floor Broker/Trader: an individual who trades commoditycontracts on the floor of a commodities exchange. Whenexecuting trades on behalf of a client in exchange for acommission he is acting in the role of a broker. When
trading on behalf of his own account, or for the account ofhis employer, he is acting in the role of a trader. Floortrading is conducted in the pits of a commodity exchange.
1. Futures Commission Merchant (FCM) :a firm orindividual that solicits or accepts orders for commoditycontracts traded on an exchange and holds client funds tomargin, similar to a securities broker-dealer.
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
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INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
2. Introducing Broker (IB): a firm or individual that solicits or accepts orders
for commodity contracts traded on an exchange. IBs do not actually hold
customer funds to margin. Client funds to margin are held by a FCM
associated with the IB.
3. Commodity Trading Advisor (CTA): a firm or individual that, for
compensation or profit, advises others, on the trading of commodity
contracts. They advise commodity pools and offer managed futures accounts.
Like an IB, a CTA does not hold customer funds to margin; they are held at a
FCM. CTAs exercise discretion over their clients' accounts, meaning that they
have power of attorney to trade the clients account on his behalf according tothe client's trading objectives.
4. Commodity Pool Operator (CPO):a firm or individual that operates
commodity pools advised by a CTA. A commodity pool is essentially the
commodity equivalent to a mutual fund.
5. Registered Commodity Representative (RCR)/Associated Person (AP): anemployee, partner or officer of a FCM, IB, CTA, or CPO, duly registered and
licensed to conduct the activities of a FCM, IB, CTA, or CPO. This is the
commodity equivalent to a registered representative.
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DERIVATIVES
1. A derivative is a product whose value is derived from
the value of one or more underlying variables or assets
is a contractual manner. The underlying assets can be
equity, forex commodity or any other asset the price of
this derivative is deriven by the spot price of the
underlying. The derivative price is at premium/discount.
2. derivates are securities under the securities contract
regulations act 1956 defines derivative to include:-
A security derived from a debt, instruments, share orany other form of security.
A contract which derives its value form the prices or
index of prices of underlying securities.
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
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FUNCTIONS OF DERIVATIVES MARKET
1. Derivatives market, helps to transfer the risk.2. Derivatives due to their inherent nature are linked
to the underline cash market with the introductionof derivatives the underlining market withness
hier trading volume.3. Derivatives market help in increasing saving and
investment in the long run transfer of risk enablesmarket participants to expand their volume ofactivity.
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
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SPOT TRADING
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
Spot trading is any transaction where delivery either takes placeimmediately, or with a minimum lag between the trade and delivery
due to technical constraints. Spot trading normally involves visual
inspection of the commodity or a sample of the commodity, and is
carried out in markets such as wholesale market.
FORWARD CONTRACTS
A forward contract is an agreement between two parties to exchange
at some fixed future date a given quantity of a commodity for a price
defined today. The fixed price today is known as the forward price.Early on these forward contracts were used as a way of getting
products from producer to the consumer. These typically were only
for food and agricultural products.
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INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
FUTURE CONTRACTS
A futures contract has the same general features as a forward
contract but is standardized and transacted through a futuresexchange. In essence, a futures contract is a standardized forward
contract in which the buyer and the seller accept the terms in
regards to product, grade, quantity and location and are only free
to negotiate the price.
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DIFFERENCE BETWEEN COMMODITY AND
FINANCE DERIVATIVE
In case of finance derivatives most of these contracts are cash settled
since financial assets are not bulky they do not need special facility for
storage even in case of physical settlement on the other hand due to
the bulky nature of the underlying assets. Physical settlement in
commodity derivatives creates the need for warehousing.
ISSUES INVOLVED IN COMMODITY TRADING
1. PHYSICAL SETTLEMENT
2. WAREHOUSING
INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)
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INSTITUTE OF MANAGEMENTSCIENCE (LUCKNOW UNIVERSITY)