INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Introduction to Financial Markets

 Contents:
➢ Constituents of Financial Markets

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Constituents of Financial Markets:

Credit
Market
Household Finance

Debt Money
Market Market

Financial NBFCs
Market

Derivatives Capital
Market Market

Insurance
Forex

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Credit Market

• The credit market is a financial market where the government and companies
issue debt to investors to raise money.
• Here, the investors buy and sell securities, mostly in the form of bonds.
• In a developing market like India, these markets are an important source of
funds.
• The market size of the Indian credit market is one of the largest in Asia.
• Like other countries, the credit market in India is also a substitute for banking
channels for finance. Hence, the Credit market is also known as the Debt Market.
Institutional • Banks, FIs, NBFC, HFCs

Non-institutional • Moneylenders, indigenous bankers and sellers for trade credit

Banks and NBFCs • Short term loans

FIs • Medium and long term loans

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Credit Market

▪ The debt issued in the credit market can be in the form of junk bonds,
government bonds, investment-grade bonds and commercial paper.
▪ This market plays a vital role in the Indian economy to meet the financial needs
in the various segments. The following are the regulators of the credit market in
India –
▪ Reserve Bank of India (RBI)
▪ Securities and Exchange Board of India (SEBI)
▪ The Securities Contracts Regulation Act (SCRA)
▪ Department of Company Affairs (DCA)
▪ The credit market is a market for trading (buying and selling) fixed income
instruments.
▪ Usually, the fixed income instruments are issued by central and state
governments, government bodies and municipal corporations.
▪ Private entities like banks, financial institutions, corporates etc. can also issue
fixed income instruments.

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Credit Market: Banks

❑ Banks are financial institutions that perform deposit and lending

functions.

❑ There are various types of banks in India and each is responsible to

perform different functions.

❑ The bank takes deposit at a much lower rate from the public called the
deposit rate and lends money at a much higher rate called the lending
rate.

Given below are the bank types in India:

•Central Bank
•Cooperative Banks
•Commercial Banks
•Regional Rural Banks (RRB)
•Specialized Banks
•Small Finance Banks
•Payments Banks
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Central Bank

▪ The Reserve Bank of India is the central bank of our country.

▪ The main function of the central bank is to act as the Government’s Bank and
guide and regulate the other banking institutions in the country.

▪ Given below are the functions of the central bank of a country:

▪ Guiding other banks

▪ Issuing currency
▪ Implementing the monetary policies
▪ Supervisor of the financial system

▪ In other words, the central bank of the country may also be known as the
banker’s bank as it provides assistance to the other banks of the country and
manages the financial system of the country, under the supervision of the
Government.

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Cooperative Banks

▪ These banks are organised under the state government’s act. They give short
term loans to the agriculture sector and other allied activities.

▪ The main goal is to promote social welfare by providing concessional loans

▪ 3 tier structure:
– Tier 1 (State Level) – State Cooperative Banks (regulated by RBI, State
Govt, NABARD)
• Funded by RBI, government, NABARD. Money is then distributed to
the public
• Concessional CRR, SLR applies to these banks.
• Owned by the state government and top management is elected by
members
– Tier 2 (District Level) – Central/District Cooperative Banks
– Tier 3 (Village Level) – Primary Agriculture Cooperative Banks

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Commercial Banks

• Commercial Banks
– Organised under the Banking Companies Act, 1956
– They operate on a commercial basis and its main objective is profit.
– They have a unified structure and are owned by the government,
state, or any private entity.
– They tend to all sectors ranging from rural to urban
– These banks do not charge concessional interest rates unless
instructed by the RBI
– Public deposits are the main source of funds for these banks

▪ The commercial banks can be further divided into three categories:

– Public sector Banks – A bank where the majority stakes are owned by
the Government or the central bank of the country.
– Private sector Banks – A bank where the majority stakes are owned
by a private organization or an individual or a group of people
– Foreign Banks – The banks with their headquarters in foreign
countries and branches in our country, fall under this type of bank

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Regional Rural Banks (RRB)

▪ These are special types of commercial Banks that provide concessional credit
to agriculture and rural sector.

▪ RRBs were established in 1975 and are registered under a Regional Rural Bank
Act, 1976.

▪ RRBs are joint ventures between the Central government (50%), State
government (15%), and a Commercial Bank (35%).

▪ 196 RRBs have been established from 1987 to 2005.

▪ From 2005 onwards government started merger of RRBs thus reducing the
number of RRBs to 82

▪ One RRB cannot open its branches in more than 3 geographically connected
districts.

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Specialized Banks

• Certain banks are introduced for specific purposes only. Such banks are
called specialized banks. These include:

– Small Industries Development Bank of India (SIDBI) – Loan for a

small scale industry or business can be taken from SIDBI. Financing
small industries with modern technology and equipments is done with
the help of this bank

– EXIM Bank – EXIM Bank stands for Export and Import Bank. To get
loans or other financial assistance with exporting or importing goods by
foreign countries can be done through this type of bank

– National Bank for Agricultural & Rural Development (NABARD) – To

get any kind of financial assistance for rural, handicraft, village, and
agricultural development, people can turn to NABARD.

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Small Finance Bank

• As name suggest, this type of bank looks after the micro

industries, small farmers, and the unorganized sector of the
society by providing them loans and financial assistance.

▪ These banks are governed by the central bank of the country.

• Some of the Small Finance Banks in our country:

– AU Small Finance Bank

– Equitas Small Finance Bank
– Jana Small Finance Bank
– Ujjivan Small Finance Bank
– Utkarsh Small Finance Bank

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Payment Banks

▪ A newly introduced form of banking, the payments bank have been

conceptualized by the Reserve Bank of India.
▪ People with an account in the payments bank can only deposit an
amount of up to Rs.1,00,000/- and cannot apply for loans or credit cards
under this account.
▪ Options for online banking, mobile banking, the issue of ATM, and debit
card can be done through payments banks.
• Given below is a list of the few payments bank in our country:
– Airtel Payments Bank
– India Post Payments Bank
– Fino Payments Bank
– Jio Payments Bank
– Paytm Payments Bank
– NSDL Payments Bank

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Non-Banking Financial Companies (NBFCs)

▪ Non-banking financial companies (NBFCs) are financial intermediaries engaged primarily in

the business of accepting deposits and making loans and advances, investments, leasing, hire
purchase, etc.

▪ It relates to assets institutions providing financial services without the need for a banking
licence or without a bank’s legal definition being fulfilled.

▪ Such entities are registered under the Companies Act, 1956 and, as specified under Section
45-IA of the RBI Act, 1934, do operation as a non-banking financial institution.

▪ The key difference among NBFC & the bank in which we can withdraw or deposit cash in a
bank when we required it, but NBFC does not allow withdrawals or deposit cash when it is
necessary.

▪ NBFC sector is characterized by a large number of privately owned, decentralized and

relatively small sized financial intermediaries.

▪ NBFCs are of various types, such as, loan companies (LCs), investment companies (ICs), hire
purchase finance companies (HPFCs), equipment leasing companies (ELCs), etc.

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Housing Finance Companies (HFCs)

• In India, investment in housing is mainly financed by own sources or from informal credit
market. The formal housing finance institutions contribute only a small percentage of
housing investments in the country.

• The formal segment of housing finance includes funding provided by the Central and State
Governments and funds from financial institutions like GIC, LIC, commercial banks,
specialized housing finance institutions and cooperative banks.

• In recognition of the need for developing a network of specialized housing finance

institutions in the country, the National Housing Bank was set up in July, 1988 as a wholly
owned subsidiary of the Reserve Bank under the National Housing Bank Act, 1987, to
function as an apex bank for the housing finance.

• NHB regulates HFCs, refinances their operations and expands the spread of housing
finance to different income groups all over the country, while functioning within the overall
framework of the housing policy.

• It has also helped in diverting increasing proportions of annual provident fund

accumulations for housing finance through housing linked savings schemes for provident
fund subscribers.

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 Capital Market

• Capital Market is generally understood as the market for long-term funds. However,
sometimes the term is used in a very broad sense to include also the market for short-term
funds.

• For instance, by capital market, some people mean “the market for all the financial
instruments, short-term and long-term, as also commercial, industrial and government
paper”. When ‘Capital Market’ is used in such a broad sense, it embraces, obviously, the
money market also.

• However, in most cases, the term Capital Market is used to refer to the market for long-term
loanable funds as distinct from the money market which deals in short-term funds. It
should, however, be added that there is no clear-cut distinction between the two markets.
Many a time, the same institutions receive and supply both short- and long-term funds.

• The money and capital markets are in fact interdependent, developments and trends in one
affecting the other.

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Capital Market
▪ Capital markets refer to the venues where funds are exchanged between
suppliers of capital and those who demand capital for use.

▪ Suppliers typically include banks and investors while those who seek capital are
businesses, governments, and individuals.

▪ Primary capital markets are where new securities are issued and sold. The
secondary market is where previously issued securities are traded between
investors.

▪ The best-known capital markets include the stock market and the bond markets.

▪ Financial markets encompass the broad range of venues where people and
organizations exchange assets, securities, and contracts with one another, and are
often secondary markets. Capital markets, on the other hand, are used primarily
to raise funding, usually for a firm, to be used in operations, or for growth.

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Capital Market

▪ The capital market consists of a number of individuals and institutions (including

the government) that channelize the supply and demand for long-term capital
and claims on capital.

▪ The stock exchanges, commercial banks, cooperative banks, savings banks,

development banks, insurance companies, investment trust or companies, etc. are
important constituents of the capital market.

▪ The capital market, like the money market, has three important components,
namely, the suppliers of loanable funds, the borrowers and the intermediaries
who deal with the lenders on the one hand and the borrowers on the other.

▪ In the capital market, the supply of funds comes from the individual and
corporate savings, institutional investors and surplus of governments. The
demand for capital comes mostly from agriculture, industry, trade and the
government.

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Capital Market

• Like the money market, the Indian capital market also consists of an organized
sector and an unorganized sector. In the organized market, the demand for
capital comes mostly from corporate enterprises and government and semi-
government institutions and the supply comes from household savings,
institutional investors like banks, investment trusts, insurance companies, finance
corporations, government and international financing agencies.

• The unorganized market consists mostly of the indigenous bankers and

moneylenders on the supply side. While in the organized sector the demand for
funds is mostly for productive investment, a large part of the demand for funds
in the unorganized market is for consumption purposes.

• In fact, many purposes, for which funds are very difficult to get from the
organized market, are financed by the unorganized sector. Like the unorganized
money market, the unorganized capital market in India is characterized by the
existence of multiplicity of interest rates, exorbitant rates of interest and lack of
uniformity in their business dealings.

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Capital Market

❑ While the activities of the organized market are subject to a

number of government controls, the unorganized sector is
by and large outside effective government control.

❑ The organized sector has been subjected to increasing

institutionalization. A large chunk of the business of this
sector is accounted for by the public sector financial
institutions, and there is government control over other
segments of the organized capital market.

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Capital Market

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Money Market
❑Money Market is the market for short-term funds, as distinct from the
Capital Market which deals in long-term funds.

❑ Sometimes, the term Money Market is used in a very broad sense to

include markets for both the short-term, and long-term funds. When
the term is used in such a broad sense, Money Market includes,
obviously, the Capital Market also. However, when a distinction is
drawn between the Money Market and the Capital Market, the former
refers only to the market for short-term funds, and the latter for long-
term funds.

❑ Reserve Bank of India, a Money Market is a “centre for dealings, mainly

of a short-term character, in monetary assets; it meets the short-term
requirements of the borrowers and provides liquidity or cash to lenders. It is
the place where short-term surplus investible funds at the disposal of the
financial and other institutions and individuals are bid by borrowers, again
comprising institutions and individuals and also by the government.”

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Money Market
❑ The central bank, commercial banks, cooperative banks, savings banks, discount
houses, acceptance house, etc., are the main constituents of a well developed
money market.

❑ The central bank usually occupies a pivotal position in the money market. It is
regarded as the ‘presiding deity’ of the money market. A strong central bank in
an organised money market can very significantly influence the conditions and
activities of the market.

❑ In developing economies like India, organisation and development of a full-

fledged money market is one of the prime responsibilities of the central bank.

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Functions of Money Market

1. By providing various kinds of credit instruments suitable and attractive for different
sections, a money market augments the supply of funds.

2. Efficient working of a money market helps to minimise the gluts and stringencies in
the money market due to the seasonal variations in the flow of and demand for
funds.

3. A money market helps to avoid wide seasonal fluctuations in the interest rates.

4. A money market, by augmenting the supply of funds and making them readily
available to the legitimate borrowers, helps in making funds available at cheaper
rates.

5. A well organised money market, through quick transfer of funds from one place to
another, helps to avoid the regional gluts and stringencies of funds.

6. It enhances the amount of liquidity available to the entire country.

7. A money market, by providing profitable investment opportunities for short-term

surplus funds, helps to enhance the profit of financial institutions and individuals.

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Money Market

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Money Market Instruments
❑ The money market instruments in India mainly comprise: (i) call money, (ii)
certificates of deposit, (iii) treasury bills, (iv) other short-term government
securities transactions, such as, repos, (v) bankers’ acceptances/commercial bills,
(vi) commercial paper, and (vii) inter-corporate funds.

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Money Market Instruments

❑ Call/Notice Money Market: Call and notice money are money dealt for
one to 14 days. The period of term money ranges from 14 days to 90 days.
This market is of vital importance to banks and financial institutions
because of the avenue it provides for investing surplus funds and meeting
the deficits. The Inter-bank lending is the major component of this market.

❑ Term Money Market: The term money market in India is still not
developed. Select financial institutions (IDBI, ICICI, IFCI, IIBI, SIDBI,
EXIM Bank, NABARD, IDFC and NHB) are permitted to borrow from the
term money market for 3-6 months maturity, within stipulated limits for
each institution.

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Money Market Instruments

❑ Repos: Repo, is a money market instrument, which enables collateralised

short-term borrowing and lending through sale/purchase operations in
debt instruments. Under a repo transaction, a holder of securities sells
them to an investor with an agreement to repurchase at a predetermined
date and rate.

❑ Commercial Paper: Commercial papers are unsecured promissory notes of short-

term maturity of highly rated companies, issued to meet working capital
requirements. The CP is subject to credit rating by any of the recognised credit
rating agencies in India. As the CPs are tradable in the secondary market,
including National Stock Exchange, they are regarded liquid.

❑ Certificates of Deposit: Certificates of Deposit (CD), introduced in June 1989, are

essentially securitised short-term time deposits issued by banks during periods of
tight liquidity, at relatively high interest rates (in comparison with term deposits).
When credit picks up, placing pressure on banks’ liquidity, banks try to meet their
liquidity gap by issuing CDs, often at a premium.

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Money Market Instruments
❑ Commercial Bills Market: Commercial Bills (Bills of Exchange) are important
instruments used to facilitate credit sales. Commercial bills can be discounted
with banks and the banks, when they are in need of funds, may rediscount them
in the money market.

❑ Treasury Bills: Treasury bills are promissory notes issued by the Central
Government to raise short-term funds to bridge short-term mismatches between
receipts and expenditures. The RBI which issues the TBs on behalf of the
Government does not purchase them before maturity but investors can sell them
in the secondary market through the DFHI or get it rediscounted.

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Money Market

1. By providing various kinds of credit instruments suitable and attractive for different
sections, a money market augments the supply of funds.

2. Efficient working of a money market helps to minimise the gluts and stringencies in
the money market due to the seasonal variations in the flow of and demand for
funds.

3. A money market helps to avoid wide seasonal fluctuations in the interest rates.

4. A money market, by augmenting the supply of funds and making them readily
available to the legitimate borrowers, helps in making funds available at cheaper
rates.

5. A well organised money market, through quick transfer of funds from one place to
another, helps to avoid the regional gluts and stringencies of funds.

6. It enhances the amount of liquidity available to the entire country.

7. A money market, by providing profitable investment opportunities for short-term

surplus funds, helps to enhance the profit of financial institutions and individuals.

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Debt Market

▪ The domestic debt market comprises two main segments, viz., the Government
securities and other (mainly corporate) securities comprising private corporate
debt, PSU bonds and DFIs’ bonds. The government securities market is
predominant, while the other segment is not very deep and liquid.

▪ Government Securities Market: As a part of developing money market

instruments, a variety of Treasury bills, viz., 14-day, 91-day, 182-day, 364-day
maturities have been introduced. Innovations have also been introduced with
respect to long-term bonds, which include zero coupon bonds, floating rate
bonds and capital indexed bonds.

▪ The main investors in the Government securities market in India are commercial
banks, cooperative banks, insurance companies, provident funds, financial
institutions (including term lending institutions), mutual funds especially the
gilt funds, primary dealers, satellite dealers, nonbank finance companies and
corporate entities.

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Debt Market

▪ Secondary Market Window: The central banks often play the role of market
makers providing two-way quotes through their sales window to infuse
liquidity in the secondary market for the Government securities.

▪ Generally, two approaches are adopted for operating the secondary market
window by the central banks: (i) fixing buying and selling prices and
announcing them to the market, and (ii) using a dynamic approach whereby the
secondary market window pricing is continuously adjusted in response to the
market dynamics.

▪ During the initial stages of market development, the Reserve Bank used to
announce the sale and purchase prices of securities.

▪ Recently, the Reserve Bank has offered a select list of securities for sale,
depending upon supply and demand conditions. A few securities are also
included in the purchase list, with a view to improving liquidity through select
securities. The sale/purchase prices and the securities offered on sale are
frequently revised.

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Debt Market

❑ Discount House Arrangements: The DFHI was originally set up in April 1988 for
developing the money market. It was also allowed to participate in Treasury bills
and dated securities. Further, for developing an efficient institutional
infrastructure for an active secondary market in Government securities and
public sector bonds, the Securities Trading Corporation of India (STCI) was set
up in May 1994.

❑ Primary Dealer System: The primary dealer system was evolved and made
functional in 1996 with the objective of strengthening the securities market
infrastructure and bringing about improvement in the secondary market trading,
liquidity and turnover in Government securities as also encouraging their
voluntary holding amongst a wider investor base.

❑ PDs have ensured maximum participation in the auctions of Government

securities. In the secondary market, they act as market makers by providing
continuous two-way quotes thereby ensuring liquidity and support to the
success of primary market operations. The system also creates appropriate
conditions for open market operations of the Reserve Bank and facilitates the
transfer of market-making activities from the Reserve Bank to the market agents.

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Debt Market

❑ Satellite Dealers: With a view to broadening the market with a second tier of
dealer system in trading and distribution and imparting greater momentum in
terms of increased liquidity and turnover, a system of SDs was put in place in
December 1996. The network of satellite dealers provides retail outlets thereby
encouraging voluntary holding of Government securities among a wide investor
base. The SDs are also given limited liquidity support from the Reserve Bank.

❑ Gilt Funds: The Reserve Bank also encouraged setting up of mutual funds
dealing exclusively in gilts, called gilt funds with a view to encouraging schemes
of mutual funds dedicated to Government securities and creating a wider
investor base for them. Mutual funds dedicated exclusively to investment in
Government securities are also provided liquidity support by the Reserve Bank
by way of reverse repos in Central Government securities outstanding at the end
of the previous calendar month.

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Debt Market

❑ A well developed market in Government securities requires a system of

transparent pricing and allotment, which, in a special sense, refers to information
needs. In turn, such a system would imply active market-making activity and
broad-based participation.

❑ The National Stock Exchange (NSE) introduced a transparent screen-based

trading system in the wholesale debt market, including Government securities in
June 1994. The trading system known as National Exchange for Automated
Trading (NEAT) is a fully automated screen-based trading system.

❑ The Over the Counter Exchange of India (OTCEI) also started trading in
Government securities in July 1997. However, a major part of government
securities transaction in the secondary market is operated through over-the-
counter negotiated deals.

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Debt Market

❑ Clearing System: The presence of a fast, transparent and efficient clearing system
constitutes the basic foundation of a well developed secondary market in
Government securities. In India, a major step in this direction was the
establishment of the DvP system.

❑ The Reserve Bank presently operates a Government securities settlement system

for those having Subsidiary General Ledger (SGL) Accounts in its Public Debt
Offices through DvP System. The DvP system ensures settlement by
synchronising the transfer of securities with the cash payment.

❑ This reduces settlement risk in securities transactions and also prevents diversion
of funds through SGL transactions.

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Foreign Exchange Market

▪ An over-the-counter (OTC) global marketplace that determines the

exchange rate for currencies around the world.

▪ Participants in these markets can buy, sell, exchange, and speculate on

the relative exchange rates of various currency pairs.

▪ Foreign exchange markets are made up of banks, forex dealers,

commercial companies, central banks, investment management firms,
hedge funds, retail forex dealers, and investors.

▪ It is the largest financial market in the world and is comprised of a

global network of financial centers that transact 24 hours a day, closing
only on the weekends.

▪ Currencies are always traded in pairs, so the "value" of one of the

currencies in that pair is relative to the value of the other.

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Foreign Exchange Market

Benefits of Using the Forex Market

✓There are fewer rules, which means investors aren't held to the
strict standards or regulations found in other markets.

✓There are no clearing houses and no central bodies that oversee the
forex market.

✓Most investors won't have to pay the traditional

fees or commissions that you would on another market.

✓Because the market is open 24 hours a day, you can trade at any
time of day, which means there's no cut-off time.

✓You can get in and out whenever you want, and you can buy as
much currency as you can afford.

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Indian Foreign Exchange Market

❑ The foreign exchange market in India comprises customers, authorized dealers

(ADs) and the Reserve Bank.

❑ With the transition to a market determined exchange rate system in March 1993
and the subsequent gradual but significant liberalisation of restrictions on various
external transactions, the forex market in India has acquired more depth.

❑ The Indian forex market has grown in depth in the 1990s as a result of the
implementation of a number of recommendations of three important committees,
viz., the High Level Committee on Balance of Payments (Chairman: Dr. C.
Rangarajan), the Report of the Expert Group on Foreign Exchange Markets in
India (Chairman: Shri O.P. Sodhani) and the Committee on Capital Account
Convertibility (Chairman: Shri S.S. Tarapore).

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Indian Foreign Exchange Market

Since the unification of the exchange rate in March 1993, several measures have
been introduced to widen and deepen the forex market.

1. First, banks have been given the freedom to: (i) fix net overnight position limits and gap
limits (with the Reserve Bank formally approving the limits), (ii) initiate trading position
in the overseas markets, (iii) determine the interest rates of NRI deposits (linked to
LIBOR in the case of FCNR(B) deposits) and maturity period [minimum maturity of one
year in the case of FCNR(B) deposits].

2. Secondly, inter-bank borrowings have been exempted from statutory pre-emptions.

3. Thirdly, banks have been permitted the use of derivative products for asset-liability
management.

4. Fourthly, in order to facilitate integration of domestic and overseas money markets, ADs
have been allowed to borrow abroad.

5. Fifthly, corporates have been provided significant freedom in managing their foreign exchange
exposures.

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Indian Foreign Exchange Market

▪ In the Indian forex market, which is essentially transactions driven, inter-bank

transactions in the spot segment mostly facilitate market making.

▪ At times, however, inter-bank transactions also reflect the “day trading” pattern.

▪ With restrictions on overnight overbought and oversold positions, day trading

allows one to benefit from the intra-day exchange rate movements without
violating the close of the day position limits.

▪ Whenever the Indian rupee was under pressure, the ratio of inter-bank spot
transactions to merchant transactions tended to exceed the average, suggesting that
day trading activities increase during volatile market conditions.

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 Foreign Exchange Market

❑ In the forward/swap segment of the market, importers and corporates generally tend to rush
for cover when the spot market turns disorderly and prefer to keep their positions open
during stable market conditions. This creates occasional large mismatches in the forward
segment of the market.

❑ If merchant sale in the forward segment is used as a proxy for forward demand by importers
and merchant purchase in the forward segment is used as a proxy for supplies by exporters in
the forward market, then the ratios of monthly forward demand to monthly imports and
monthly forward supply to monthly exports could explain the sensitivity of exporters and
importers to forward market in India.

❑ Two-way movement in the exchange rate is essential to increase the sensitivity of exporters
and corporates to the forward market.

❑ Initiation of longer maturity contracts up to one year represents another healthy development
in the forex market.

The Reserve Bank’s presence in the market essentially reflects its policy of ensuring orderly
market conditions. Reflecting its stance, net intervention sales of the Reserve Bank generally
coincided with conditions of excess demand in the market, while net intervention purchases
coincided with surplus market conditions and contributed to reserve build-up.

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Derivative Market

▪ Derivatives are financial contracts, set between two or more parties, that derive
their value from an underlying asset, group of assets, or benchmark.

▪ A derivative can trade on an exchange or over-the-counter.

▪ Prices for derivatives derive from fluctuations in the underlying asset.

▪ Derivatives are usually leveraged instruments, which increases their potential

risks and rewards.

▪ Common derivatives include futures contracts, forwards, options, and swaps.

▪ Traders use derivatives to access specific markets and trade different assets (like
stocks, bonds, currencies, market indexes, etc.)

▪ Contract values depend on changes in the prices of the underlying asset.

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INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Questions !

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