Equity & Equity Derivatives

Equity is the one of the asset classes which priode stake in a company. It is a popular choice among investors as it provides a high-returns and a cushion against inflation.

Equity shareholders get return in form of dividend or price appreciation. However, Dividends are not compulsory for the company to pay to their stakeholders but some companies do pay a portion of their profits in form of dividends and the rest is retained into the company’s business. Investing in an equity stock the investor can earn profit via capital gain or price appreciation. As a particle owner of the company, the shareholder has a voting right in the company’s major decisions.

Equity derivatives instruments facilitate trading of a component of price risk, which is inherent to investment in securities. Price risk is nothing but change in the price movement of assets, held by a market participant, in an unfavourable direction. This risk broadly divided into two components ‐ specific risk or unsystematic risk and market risk or systematic risk.

To take the advantage of the market, Equity Derivative provides an edge to the market movement. Returns are visible in short duration. The equity derivative is a class of derivatives whose value is based on equity movement of the underlying asset. The investor used equity derivatives to hedge the risk in the stock by taking long or short positions or even to speculate the price movement of the underlying asset. Option and Futures are by far the most comment on equity derivative products.

Currency Derivative

Currency market internationally is very big and very mature in terms of market share, which is bigger than equity and commodity markets. It is operated 24/7 globally. Currency Derivatives are traded in Foreign Exchange market(FOREX) which is a globally decentralized market. Indian currency markets have gained a lot of attention from retail investors in recent years. It is a contract between the seller and buyer, whose value is to be derived from the currency value.Currency derivatives are in form future and option contact where the investor can buy or sell a specific quantity of a particular currency at a predetermined date. The participants are from all round the world who want to buy, sell, exchange and speculate with different currencies.It is traded in pairs like USD/INR or GBP/INR. Forex market is affected by various reasons such as economic, political, international trade and interest rate conditions of the related currency. Many investors find the current derivative more attractive as it provides portfolio diversification, requires lower margins and much less scripts to track.

Securities Lending and Borrowings(SLB)

Stocks also can be lent or borrowed. Securities Lending and Borrowing(SLB) is a temporary lending of securities for an agreed duration with a fee. More than 370 stocks are available on NSE SLB platform. The contacts are available for a duration of a month to twelve months. SLC provides liquidity in the market which increases the efficiency of the markets. It is an Exchange Traded Product. Investors who have certain stock holdings in their Demat account and are not planning to sell that stock holding in near future can lend their shares through the SLB segment by charging certain fees and a fixed duration. The Lender can utilize their portfolio holding for additional income. After lending the security, the right is still entitled to any corporate action like dividend, bonus. The lender The borrowers are the traders who are taking advantage of them for a short term opportunity for possible gain for a stock's momentum. It allows them to meet obligations in case of shortage in delivery and avoid auction in the Cash segment. Lending and borrowing of shares does not mean a transfer of ownership rights of the shares, it simply means to let out the shares which are owned by the investor. The transactions are cleared by Clearing Corporations thus no counterparty risk.

Commodity Derivative

Commodity Market is a marketplace for buying, selling and trading products such as precious metals,energy, oil, species and so on. The investor aims to diversify their portfolio by investing into various perishable and non-perishable products, thereby reducing risk as commodities have very little or negative correlation with other asset classes. Commodities are risky investments as the price can be affected by various uncertainties such as the weather, epidemics or disasters. Just like the equity market segment, it is necessary to have apt knowledge of factors and various strategies before investing into commodities. This segment provides hedge against price inflation as the market has a negative correlation with the equity and bond markets. The trading hours are long from 09:00am to 11:30/11:55 pm, which allows the investors to be in the market longer and capture international benchmark prices. Investment in commodities can be done by Futures contacts, options and exchange-traded funds(ETFs). In India, some of the popular forward market commissions are ; Multi Commodity Exchange of India (MCX), Indian Commodity Exchange (ICEX), National Multi Commodity Exchange of India( NMCE), National Commodity and Derivative Exchange (NCDEX). All the commodities traded on MCX have an international linkage for a greater trading participation.

Depository Participants

Depository is a place where financial securities are held in dematerialised form. It is responsible for maintenance of ownership records and facilitation of trading in dematerialised securities. Depository Participant(DP) serves as an mediator between various depositories and investors. In India, National Securities Depository Limited(NSDL) and Central Depository Securities Limited (CDSL) are two depository participants operating the Indian stock market to maintain various asset classes in electronic form. With DP keeping the securities in electrical form, they purchase their securities in the name of the investors and save them in Demat Account, with that it provides easy mobility. They are registered with the Security Exchange Board of india (SEBI). Ensure that the investors’ investment is safe.

Mutual Fund distributors

Mutual fund is an ideal investment for the investor who wants to invest in various schemes with investment goals. However, don't have the time or understanding of the stock markets. An individual who facilitates buying and selling of units within a mutual fund between an Asset Management Company(AMC) and interested investors, is a mutual fund distributor. The distributor acts as an agent by making investors aware about the various products available in the market. A distributor helps the investors in carrying out investment transactions related to switching, redemption and guide them periodically on the performance of their investment.

Initial Public Offerings [IPO]

The process of offering fresh equity to the investors for the first time in the primary markets is called Initial Public Offerings(IPO). Is it a process of transforming a private company or corporation into a public company. Through IPO, the company gets its name listed on the stock exchange and raises funds for various reasons like expansion, repayment of loads, restructuring, or monetize the investments made by the existing stakeholders. The company going public will publish a prospectus which is a detailed document of the proposed offerings. As soon as the stock is listed in the exchange, it can be traded freely in the secondary market. While investing in an IPO there are various things to keep in mind for a smart investment to earn a good return. However, investing in any IPO would not result in a good return. There has to be a good understanding of the private company before investing in it. We provide updated IPO information for the investors who are interested in this investment opportunity. The company can later issue more shares through Offer for Sale(OFS) to its existing shareholders.

New Pension System(NPS)

New Pension scheme, now known as New Pension System (NPS) is a pension plan introduced by the government of India to secure the financial future of the individuals after retirement. NPS is regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA). The scheme is for all citizens of India between the ages of 18-60 years. Earlier pension schemes used to be for employed individuals only however, NPS is for employed or self-employed or even house-makers. The minimum contribution starts from Rs.500 per month to Rs.6000 per annum. We invest into NPS on behalf of the investor. The funds are invested in debt and equity markets by the government. They offer a return from 8% to 10% per annum. Having a secured retirement and pension provides a sense of security and acts as a source of investment. It is also one of the best tax saving investment options. The investor can claim up to Rs1.5 lakh of deduction under section 80(C) of the Income Tax Act. There is no tax implication for investors of New Pension Scheme as there is a provided tax benefit of over and above Rs 1 lakh under section 80(C) of the income tax.

Corporate Fixed Deposits, Bonds & Debentures

Company Fixed Deposit (Corporate FD)is a deposit, where the duration and rate of interest is predetermined and remains fixed. Financial and Non-Banking Financial Companies (NBFCs) usually offer these kinds of deposits. The returns are higher from corporate FDs as compared to bank FDs.

Corporate FDs are flexible as the investor can choose according to their preference from various duration from monthly, quarterly, semi-annually or even annually.

If the inverter has a gola to invest for a short term and with comparatively lower risk than the stock markets than Corporate FDs are a good tool of investment.

Bonds are fixed-income instruments which act as an acknowledgment of debt, which includes details of the loan and its payments. Bonds are issued by companies, government, municipalities and sovereign governments to raise funds to financial projects and operations. In the market, bond prices are inversely correlated with interest rates i.e, when rates increase, bonds prices decrease. In India, the bond market has high liquidity, is a stable and relatively safe source of investment for risk-averse investors.

Debentures are a debt instrument, which is not backed by any collateral securities and are usually issued for a medium to long term. They are backed by reputation and creditworthiness of the issue.

Mobile trading Services

The investor can have access to their information available in their hands and can initiate orders from their mobile devices. The application allows the users to get live market data. In this 21st century where everything is digital and fast paced, JK offers a complete financial portal offering service as a form of a mobile trading application. Which gives you portable personal trading experience to our client with just one tap. It comes ready with various tools like mobile trading, mutual fund management and many more which empowers you to closely monitor your financial growth, on your hand.

e-Insurance

With digital India, now there is a place where all the insurance policies can be kept in one place in a digital form. Converting into digital form, one can store, maintain and retrieve their polices and the information very easily. The investor can also modify or revise the insurance policies much faster and accurately.