Investment Terms

Commodities futures trading have evolved from the need for ensuring continuous supply of seasonal agricultural crops. In Japan, merchants stored rice in warehouse for future use. In order to raise case warehouse holders sold receipts against the stored rice. These were known as rice tickets.

Eventually such rice tickets became accepted as a kind of general commercial currency Rules came into being, to standardize the trading in rice tickets. The futures contract, as we know it today, evolved as farmers (sellers) and dealers (buyers) began to commit to future exchanges of grain for cash. For instance, the farmer would agree with the dealer on a price to deliver to him 5,000 bushels of wheat at the end of June.… Read the rest

All portfolios, whether they are stock or bond portfolios, are compared to benchmarks to gauge their performance; indices or peer group statistics are used to monitor the success of each fund.

As composites, the indices can be thought of as similar to polls: a polling firm that seeks to understand what a certain population thinks about a certain issue will ask representatives of that cross-section of the population. Similarly, a stock or bond benchmark that seeks to measure a certain portion of the market will simply compile the values of representative stocks or bonds.

Portfolio construction refers to the manner in which securities are selected and then weighted in the overall mix of the portfolio with respect to these indices.… Read the rest

Here, there are several distinctions between types of research–breaking it down by style, capital structure and firm. While the main focus will be on fundamental equity and fixed income research, it will also discuss the other types of research as well as the functional roles analysts play at different types of firms.

1. Fundamental Research:  Fundamental research takes a deep dive into a company’s financial statement as well as industry trends in order to extrapolate buy and sell investment decisions. There is no clear cut way in conducting fundamental research but it normally includes building detailed financial models, which project items such as revenue, earnings, cash flows and debt balances.

Commodities (commodity) are basic raw materials and foodstuffs such as metals, petroleum, coffee, grain etc. Commodities are traded on a commodity exchange both by the companies that use them (e.g. chocolate manufacturers) and by speculators. Futures contracts allow commodity producers and commodity users to bring some predictability and stability to pricing. By buying futures contracts, they can hedge against underlying price changes in the commodity.

Commodity exchange are the   exchanges where the trading of futures and forwards take place, basically commodity exchange   are trading   in future contacts on those   commodities   which have some   regional   relevance it is   not going   to be as easy   as a share   of a company   to get   listed   in a different exchange.… Read the rest