Tag Archives: Trading
A treatise on risk basics
What is risk?
Risk are of three types: Known—a risk that is recognized by all, Unknown—a risk that is known by at least one person but is not known to many and Unknowable—a risk that is totally unexpected and impossible to foresee
Examples
Known—...
Counterparty risk management needs a closer relook
Counterparty risk is the risk that a counterparty in a transaction will default prior to the expiration of the contract and will be unable to make agreed contractual payments
Experience has shown, normally banking and financial crises have their...
Pay and Bonus – Investment banking and evolving regulations
These times are very difficult times for our investment banks.
The markets are not moving and most of the time they are hostile. There is no growth in major economies and they make these dull markets. Making money in such markets is very difficult.
The...
Foreign Exchange Risk Management
The peculiarities of foreign exchange markets are
– An Over The Counter market
– Only market open 24 hours, seven days a week, 365 days a year
– No single location; no barriers
– ...
FX Forward Contracts
Forward Contract is a mechanism through which the rate is fixed in advance for purchase or sale of foreign currency at a future date. In such an arrangement, the risk of loss which might accrue on account of adverse movement in the rate of exchange...
Foreign Exchange Dealing Operations
If you buy a Binny Silk Saree for your wife (or girl friend!) at T.Nagar Chennai Nalli Silks, you will naturally want to pay for it with Indian Rupees and the Nalli Silks will want to be paid in Rupees because he pays all his bills with Rupees.
Likewise,...
DFA and Framework for payment, clearing and settlement regulation,
Title VIII of the Dodd-Frank Act, titled the “Payment, Clearing, and Settlement Supervision Act of 2010,” was enacted to mitigate systemic risk in the financial system and to promote financial stability, in part, through enhanced supervision...
DFA and Volcker rule (Proprietary Trading)
Federal Regulators in the United States are moving ahead with a rule that would ban banks from trading for their own profit.
This rule – popularly known as Volcker Rule – is covered under Section 619 of Dodd Frank Act and contains two broad...
Current Trends in Equity Derivatives Market Place
Equity Derivatives fall into following four categories
Flow derivatives – vanilla, listed and OTC options, variance, futures and synthetic futures, convertibles
Delta 1 – Single Stock, Sector Swaps, ETFs, Pnotes
Exotics
Convertibles
An...
Current trends in FX markets
FX Markets are the backbone of international financial markets.
An insight into the current trends in global FX markets reveals an interesting reading as under:
Markets
Global FX turnover ($4.2 Trillion daily) gone up by over 25% over April...
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