• The history of stock exchanges can be traced to 12th century France – unofficial
• The Amsterdam Stock Exchange, created in 1602, became the first official stock
exchange when it began trading shares of the Dutch East India Company. These
were the first company shares ever issued.
o S&P 500 - The S&P 500 is an index containing the stocks of 500 Large-
Cap corporations, most of which are American. The index is the most
notable of the many indices owned and maintained by Standard & Poor's,
a division of McGraw-Hill
• Europe
o FTSE 100 - FTSE is an abbreviation of 'Financial Times Stock Exchange'.
The index is maintained by the FTSE Group, a now independent company
which originated as a joint venture between the Financial Times and the
London Stock Exchange. It is a share index of the 100 most highly
capitalised companies listed on the London Stock Exchange
Slide 2:
Introduction to Indian Stock Exchange - BSE
• Established in 1875. Oldest stock exchange in Asia. Established as “The Native
Share & Stock Brokers Association”
• 1st Stock exchange in the country to have obtained permanent recognition in 1956
from GOI under Securities contract (regulation) Act 1956.s
• There are 23 recognized stock exchanges in India
• More than 6000 companies are listed on BSE.
• Earlier an Association of Persons (AOP), the Exchange is now a demutualised
and corporatised entity incorporated under the provisions of the Companies Act,
1956, pursuant to the BSE(Corporatisation and Demutualisation) Scheme, 2005.
• The major indices on BSE are:
Sector Based
o BANKEX Index – HDFC, ICICI, IDBI etc.
o BSE Metal Index – Hindalco, Jindal Steel, SAIL etc.
o BSE Oil & Gas Index – Essar Oil, ONGC, IOC etc.
Capitalization Based
o BSE – Large Cap – Market Cap over 10,000 crores – Blue Chip Stocks
o BSE – Mid Cap – Market Cap between 2000-10000 crores
o BSE – Small Cap – Market Cap less than 2000 crores
Slide 3:
Instrument traded on BSE:
http://en.wikipedia.org/wiki/Financial_instruments
Options - Options are financial instruments that convey the right, but not the obligation,
to engage in a future transaction on some underlying security.
Futures & Forwards – While futures and forward contracts are both a contract to deliver
a commodity on a future date at a prearranged price, they are different in several respects:
a) Forwards transact only when purchased and on the settlement date. Futures, on the
other hand, are rebalanced, or "marked to market," every day to the daily spot price of a
forward with the same agreed-upon delivery price and underlying asset.
b) Futures are always traded on an exchange, whereas forwards always trade over-the-
counter
c) Futures are highly standardised, whereas some forwards are unique
Commercial paper -is a money-market security issued by large banks and corporations
Interest rate swap - is a derivative in which one party exchanges a stream of interest
payments for another party's stream of cash flows
Slide 4:
Index Calculation:
Useful Link - http://209.85.175.104/search?
q=cache:LTsVs1Tp_DYJ:www.blonnet.com/iw/2007/08/26/stories/2007082650801300.h
tm+free+float+factor+of+RIL&hl=en&ct=clnk&cd=2&gl=in
Slide 5:
Sensitivity of Exchange
Slide 6:
Terminology used:
• Circuit
• Stop Loss
• Margins
•
Slide 7:
Do’s and don’ts for the Investors:
Pikashoo
stocks is as follows:
Sensex is calculated.