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Thread: Beginner Q&A on Stock Market

  1. #11
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    What are Options contracts?
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  2. #12
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    Quote Originally Posted by tigershark View Post
    What is square off?
    You have bought/sold a certain script and then you sell/purchase the same script the same day is called square off.

    In square off, you do not carry home the same trade for next day.

  3. #13
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    Quote Originally Posted by CopyCat View Post
    What are Options contracts?
    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.

    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.

  4. #14
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    Quote Originally Posted by Sumant View Post
    What are Futures?
    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.

  5. #15
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    I have a small query -
    What is right issue? Is it simmilar to IPOs?

  6. #16
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    Quote Originally Posted by mohan View Post
    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.
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  7. #17
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    Quote Originally Posted by mohan View Post
    What is right issue?
    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.

  8. #18
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    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.

  9. #19
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    What is Debenture?

  10. #20
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    Quote Originally Posted by Raja View Post
    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.

    Source - http://en.wikipedia.org/wiki/Debenture
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