Презентация Market Organization and Structure онлайн

Содержание слайда: Market Organization & Structure

Содержание слайда: What Are the Main Functions of the Financial System?

Содержание слайда: How Are Markets Classified?

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Содержание слайда: How Do Secondary Markets Support Primary Markets?

Содержание слайда: How Are Assets Classified?

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Содержание слайда: What Positions Can I Take in an Asset?

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Содержание слайда: Hedging with Forward Contracts Farmer needs TO SELL wheat to the miller at a future date.

Содержание слайда: Futures versus Forward Contracts

Содержание слайда: Swap Contracts

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Содержание слайда: Option Positions and Their Underlying Risk Exposures

Содержание слайда: Repurchase agreements (REPO) Direct Repurchase Agreements (Direct REPO): one party sells securities to another with an agreement to repurchase them at a specified date and price Essentially a loan backed by securities A reverse REPO refers to the purchase of securities by one party from another with an agreement to sell them Transactions amounts are usually for $10 million or more Common maturities are from 1 day to 15 days and for one, three and six months There is no secondary market for repos

Содержание слайда: Insurance

Содержание слайда: Credit Default Swaps (CDS)

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Содержание слайда: Example of Securitization

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Содержание слайда: Terminology for Levered Positions

Содержание слайда: EXAMPLE: Computing Total Return to a Leveraged Stock Purchase A buyer buys stock on margin and holds the position for exactly one year, during which time the stock pays a dividend. For simplicity, assume that the interest on the loan and the dividend are both paid at the end of the year. Purchase price $20/share Sale price $15/share Shares purchased 1,000 Leverage ratio 2.5 Call money rate 5% Dividend $0.10/share Commission $0.01/share 1. What is the total return on this investment? 2. Why is the loss greater than the 25 percent decrease in the market price?

Содержание слайда: EXAMPLE: Margin Call Price A trader buys stock on margin posting 40 percent of the initial stock price of $20 as equity. The maintenance margin requirement for the position is 25 percent. Below what price will a margin call occur?  

Содержание слайда: Compare and Contrast Execution, Validity, and Clearing Instructions

Содержание слайда: Execution instructions Execution instructions specify how to trade A MARKET ORDER instructs the broker to execute the trade immediately A LIMIT ORDER places a minimum execution price on sell orders and a maximum execution price on buy orders Execution instructions about volume of trade: all-or-nothing orders: execute only if the whole order can be filled. Orders can specify the minimum size of the trade Trade visibility can also be specified. Hidden orders are those for which only the broker or exchange knows the trade size Trades can also specify displace size, where some of the trade is visible to the market, but the rest is not (Iceberg orders)

Содержание слайда: Limit Order Book: “26 Bid, Offered at 28”

Содержание слайда: Validity Instructions

Содержание слайда: Stop Orders (Stop-Loss Orders)

Содержание слайда: Execution Mechanisms

Содержание слайда: Order-Driven Markets

Содержание слайда: What Are the Characteristics of Well-Functioning Financial System?

Содержание слайда: What Are the Objectives of Market Regulation?

Содержание слайда: Summary Main functions of the financial system Classifications of assets and markets Financial intermediaries Long and short positions Leveraged positions Execution, validity, and clearing instructions Market and limit orders Primary and secondary markets Quote-driven, order-driven, and brokered markets Characteristics of a well-functioning market Objectives of market regulation