Iapm Assignment
Iapm Assignment
Iapm Assignment
4. Tarawaniwalas
2. Membership:
The members only enter into trading of stock exchange and carry on
business. A non-member can buy or sell securities through a member.
Every stock exchange has its own rules and regulations for the admission
of members. Member of a stock exchange are allowed to appoint certain
agents to do business on their behalf.
(a) Remisiers:
They are agents of full-fledged members of a stock exchange. They are
appointed to secure business for the members. They cannot carry business
on their own name. They are paid commission out of the brokerage
collected by members on the business procured by the remisiers. They also
known as half-commission men or sub-brokers.
Investor must place the order very clearly specifying the range of price at
which securities can be bought or sold. e.g. “Buy 100 equity shares of
Reliance for not more than Rs 500 per share.”
5. Settlement:
This means actual transfer of securities. This is the last stage in the trading
of securities done by the broker on behalf of their clients. There can be
two types of settlement.
ONLINE TRADING:
Online trading is a fairly popular method of transacting in financial
products online. Brokers have gone online, with their platforms providing
all kinds of financial instruments like stocks, commodities, bonds, ETFS,
and futures.
• Traditionally, when a buyer wanted to invest money in stocks, he used to
call his brokerage firm and asked for putting in a request to buy stocks of a
given company for a specified amount.
• The broker would then let him know the market price of the stocks and
would confirm the order.
• After the user confirmed his trading account, the broker's fees and the time
period required for the order, the order would get placed on the stock
exchange.
As is obvious, this method had multiple steps and was pretty long drawn.
Not surprisingly, online trading platforms have taken over the entire
trading landscape because of their advantages:
• The users can open, manage and close accounts sitting at their homes,
working on a device with internet.
There are two types of depository services available that are: NSDL
(National Securities Depository Limited) and CDSL (Central
Depository Services Limited). These both depositories are based in
Mumbai. Investors in order to avail the services provided by depository
need to contact the Depository agent. Depository agents are the
intermediary between the depository and the investors.
Depositories interact with their customers through the medium of these
depository agents only. Investors are required to open depository account
which is known as demat account with any of Depository agent to use
depository services. The functioning of both Depository and depository
agent is regulated by SEBI (Securities Exchange Board of India).
Important Roles & functions of Depository are discussed below:
Note that the Account Balance is marked daily using the Gain/Loss
column. The Cumulative Gain/Loss column shows the net change in the
account since day 1.
Because the farmer has a short position in wheat futures, a fall in the
value of the contract will result in an increase in their account. Likewise,
an increase in value will result in a decrease in account value. For
example, on Day 2, wheat futures increased by $4.55 - $4.50 = $0.05,
resulting in a loss for the day of $0.05 x 50,000 bushels = $2,500. While
this amount is subtracted from the farmer's account balance, the exact
amount will be added to the account of the trader on the other end of the
transaction holding a long position on wheat futures.
The daily mark to market settlements will continue until the expiration
date of the futures contract or until the farmer closes out his position by
going long on a contract with the same maturity.