Chapter 2 · 2 of 100 marks · workbook pages 22-54
Introduction to the Securities Market
The products (equity, debt, warrants, indices, funds, ETFs, hybrids, commodities), the market structure (primary and secondary), the participants, the kinds of transactions, and demat.
Focus
- Securities and market structure
- Products
- Participants
- Transaction types
- Demat and settlement
Must know
- Primary markets issue securities; secondary markets provide trading after issue.
- Equity, bonds, warrants, indices, mutual fund units, ETFs, structured products, commodities, futures, options, swaps, and forwards have distinct rights and obligations.
- Know the difference between hedging, speculation, arbitrage, pledging, cash, spot, tom, and forward transactions.
Traps
- An option gives a right, not an obligation.
- Futures create obligations for both parties.
- ETF units trade like exchange-listed securities.