ppt

1. Financial Engineering By CA. Pradeep Kumar Gupta (CA., CS., B.com)

16. Comparison of forward and futures contract Forward Future Private Contract between two parties Traded on an exchange Not standardized Standardized Contract Usually one specified delivery date Range of delivery dates Settled at the end of contract Settled daily Delivery or final cash settlement usually takes place Contract is usually closed out prior to maturity Some credit risk Virtually no credit risk

22. Comparison between Call Option & Put Option Call Option Put Option Option which gives the holder right to BUY an assets but not an obligation to buy. Option which gives the holder right to SELL an assets but not an obligation to SELL. Call option will be exercise only when the exercise price is lower than the market price. Put option will be exercise only when the exercise price is Higher than the market price. Seller/writer is under obligation to sell the underlying assets if the buyer exercise his option to buy the shares . Seller/writer is under obligation to sell the underlying assets if the buyer exercise his option to sell the shares .

41. Comparison of Stock Market and commodity market Stock Market Commodity Market Future trading Settlement at Every Last Month of Thursday Different dates (As.Metal 5 th of the next month, Agriculture Product 20 th of the month, Electricity 15 th of the month) Time 9.30 to 3.30 10am to 11.55pm Monday to Friday Monday to Saturday Future trading available only upto 3 months Future trading available only upto 10-12 months Delivery not possible Delivery also possible. Top cities-Ahemdabad,Mumbai,Delhi. Top cities-Ahemdabad, Rajkoat,Indore Controlled by SEBI Controlled by FMC (forward Market Commission)