Debentures:

A Financial Instrument -- Thriugh Which the owner of A company Can Raise Funds --
Person who gives money to the company is known as the debenture holder(Not owner to
the compay but lender to the company)
The person who lends money gets a Fixed Rate of Interest in return.

Whenever we invest in a debenture The Debenture clearly mentions that its a 9% or

12% Debenture.
Once invested even if the Market goes Down/Up we get the fixed returns mentioned
earlier {example 9/12%}.
Rate of interest we receive on Debenture is higher than a F.D.

Secured Debentures & Unsecured debentures are types.

Secured Debentures: Exampe-- Even if the company goes bankrupt--after selling off
assets what ever money will be received will be used to pay off the debentures
holder

Majority of the debentures are listed on the stock exchange.

We can buy it on the Secondary Market BSE/NSE.

Debentures has to be mandatorily get rated by any rating agencies example: ICRA--
INDUSTRIAL CREDIT RATING AGENCIES
CRISIL.AAA AA A -AA D(Default).

NoTDS on Debentures whereas Bank FD Charges TDS.

FUTURES AND OPTIONS:

Futures & Options are type of Derivatives.

DERIVATIVE - Derivative is a financial instrument which derives its value from an

underlying asset.
Like we invest in bonds, shares we can invest in
debentures.
EXAMPLE - PAY BACK CARD (Its not a debit/credit card)
But, We get points whenever we swipe our deb/cre card. more we
swipe more we gain points,
like a derivative payback derives its value from a underlying
asset that id credit/debit card.

EXAMPLE - Reliance Industries Derivatives - If the Value of the Reliance Stock

increases The Future of Reliance Increases.

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TYPES OF DERIVATIVE:

Futures Forwards
Options Swaps

As far as the stock market concerns, SWAPS AND FORWARDS are not considered as
derivatives.
Derivatives are primarily used for two major things - HEDGING & SPECULATION
FUTURES: Derivative Financial Contracts.
1- Obligate the parties, you have to honor the contract, cant
backoff. (Its A obliigation not a right given to you).
2- To transact a asset ex. Commodity, Currency or the index
itself.
3- At predetermined future date and price. ex on zerodha
typeNIFTY FUT.
Futures have expiry, 3 expiry periods. Near Month, Next
Month, Far Month.
Futures expires at last thursday of the month. If its a
holiday futures expires on wednesday.
In Futures we cant buy like 1 shares 2 shares, We have to buy it in Lot Ex. 1 lot,
2 lot

OPTIONS: Options is a contract which allows the investor to buy or sell an

underlying instrument like a Share or Index at predetermined
price over a certain period of time.
Based on my analysis I think Stock.A which is trading at 100
will go to 200.
if we want to buy a option we have to buy it in lot.
two types : Call and Put and two parties to the options Buyer and
Seller
For Call Buyer Profit is unlimited and Call Seller profit is
limited to the premium paid.
For Call Seller Loss is unlimited profit to premium received.

FORWRD: Ex. A farmer trades Potato today at Rs.2 to be delivered after 2 months
irrespective of the price after two months
after two months Price of potato may be 1 OR even 4. but the
farmer will get only Rs.2 as he had entered in Forwards
Contracts.

SWAP: SWAP basically means exchange

FUTURES EXAMPLE
MRF 1 SHARE RS.60,000
MRF 1 LOT 10SHARES FUT RS,60,000 THAT IS 10% OF 6,00,000.
IF price rises to RS.70,000 1 Share profit 10,000 1 Lot Profit 1,00,000.
Loss Of 10,000,
1 share RS.10,000 loss
1 lot RS.1,00,000 loss capital of 60,000 + 40,000 is what we have to give.