Financial Services

Financial Markets

Study Material on
Financial Markets
Compiled by

Prof. Anil Suvarna

Anil Suvarna
1

Financial Markets

Syllabus
No.

Contents

Section 1: Introduction to Equities
1.1
Indian Financial Markets: An Overview
1.2

Classification of Financial Markets

1.3
1.4

Evolution of Stock Markets in India
History of Stock Exchanges in India

1.5

Management of Stock Markets

Section 2: Equities
2.1
Equities: History, Meaning and Definition
2.2
Types of Trading
2.3
Trading Mechanism and its Modernization
2.4
Clearing and Settlement
Section 3: Derivatives
3.1
Derivatives: History, Meaning and Definition
3.2
Classification of Derivatives
3.3
Features, Types and Players in Derivatives
3.4
Forwards: Meaning, Definition & Limitations
Section 4: Futures
4.1
Meaning
4.2
Terminologies
4.3
Payoff Profile
4.4
Numericals
Section 5: Options
5.1
Meaning
5.2
Terminologies
5.3
Payoff Profile
5.4
Numericals

Anil Suvarna
2

Financial Markets

Section 1: Introduction to Equities

1.1 Financial Markets: An Overview
Financial markets are an integral part of the economy of any nation. They play a key role in the development of the economy. In simple words financial markets facilitate the reallocation of savings from savers to entrepreneurs. In India the financial markets and institutions have, in recent years, undergone significant changes keeping in pace with the changing needs of market participants. Also the market has gone through various stages of liberalization that has increased its degree of integration with the global markets.

In the financial markets savings are linked to investments by a variety of intermediaries through a range of complex financial products called securities. Securities are defined in the Securities Contracts (Regulation) Act, 1956 to include shares, bond, scrip, stocks, or other marketable securities of like nature in or of any incorporate company or body