What are Options contracts?
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What are Options contracts?
You have bought/sold a certain script and then you sell/purchase the same script the same day is called square off.Quote:
Originally Posted by tigershark
In square off, you do not carry home the same trade for next day.
Options contracts are instruments that give the holder of the instrument the right to buy or sell the underlying asset at a predetermined price. An option can be a 'call' option or a 'put' option.Quote:
Originally Posted by CopyCat
A call option gives the buyer, the right to buy the asset at a given price.
Similarly a 'put' option gives the buyer a right to sell the asset at the 'strike price' to the buyer. Here the buyer has the right to sell and the seller has the obligation to buy.
Futures : Futures are a contract wherein you have to buy a specified share at a specified price on a specified date. It is compulsory to buy the share on that particular date.Quote:
Originally Posted by Sumant
I have a small query -
What is right issue? Is it simmilar to IPOs?
Issue of shares at par or at a premium by an existing company to its share holders in a certain proportion to their holdings,as a matter of their right to receive preferential treatment. Its different from IPOs.Quote:
Originally Posted by mohan
Right issue is for existing shareholder of the company, so it is not public issue like IPOs. In it existing shareholders have right to apply or reject the right issue. Normally company give some discount in the price of share for right issue.Quote:
Originally Posted by mohan
Rights Issue is another way of raising capital from the market. The money is raised from the existing shareholders. No party except the existing shareholders can subscribe to it. And its not a compulsion on shareholders to subscribe.
It is intentionally priced below CMP. Otherwise it makes no sense for the shareholder to buy them. If its priced above CMP, then obviously it makes sense to buy from secondary mkt rather than subscribing to Rights.
What is Debenture?
The term is used in corporate finance for a medium to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably with bond, loan stock or note.Quote:
Originally Posted by Raja
Source - http://en.wikipedia.org/wiki/Debenture