Bond Market Terminology

Coupon rate and Coupon:
It is the rate at which issuer pays to the investor. The amount of interest that is being paid out periodically is called coupon. The frequency of coupon payment is predetermined. The coupon is, usually, paid out semi annually for long term bonds.

Maturity:
Maturity is the date on which the issuer has agreed to pay the last installment of the borrowed amount. The cash flows to the investor ends at this date i.e. the agreement expiry date.

Tenor:
The number of years remaining for the bond to mature is called tenor or term to maturity. It gives information of time over which the investor will continue to receive the coupons. The price of the bond is influenced by term to maturity.

Principal:
Principal is the amount that the issuer agrees to repay at the end of maturity. This is called as par value or face value of the bond. Read more

May 25, 2008 | Filed Under Bonds | Leave a Comment

BSE quotes - LTP/Prev. Close and Change - net/ %

LTP/prev. close:

LTP stands for Last Traded Price and Prev. close for Previous close price.As the name suggests LTP gives the Last traded price of a single stock/share.i.e. the last(latest) transaction has been taken place between a buyer and seller upon an agreed amount at that price.This LTP varies most rapidly when the market is open.

Prev close is nothing but the LTP of previous day.i.e. LTP of a particular stock at which
previous day market closes.

Change - Net/%:

It implies the change in the price of a stock in absolute terms as well as in terms of percentage.

Example: In the above figure Change is -34.30.It means that the price of the stock has lost Rs 34.30 in absolute terms.The same can be expressed in terms of percentage also.
The price of the share has lost 1.84 % of its value.These values varies continuosly(in most of the cases) when the market is open. Read more

May 25, 2008 | Filed Under Stocks | 2 Comments

Bond Market/Fixed Income Market Basics

A bond is a basic financial instrument issued by a borrower or debtor to lenders or investors. The issuer repays the amount borrowed and interest on the borrowed amount over the period of borrowing.

Issuer:
An issuer is a borrower or debtor of funds who issues bonds to investors to raise money to meet its financial needs like improving infrastructure, expansions, mergers, acquisitions.

Types of issuers:
The following entities issue bonds either in domestic or in foreign markets.

Central or Federal governments and state governments
Municipal corporations and government subsidiaries like electricity boards.
Corporates

The issuer of a bond greatly influences the nature of the bond. The bonds issued by the central or federal governments are considered to be low risk bonds because the central or federal government can always print money and payback if it could not generate money from taxes. These are also called treasury bonds.

Bonds issued by municipal corporations are riskier compared to treasury bonds. But these can also be backed by local tax receipts i.e. if it could not repay the money the investor can raise them. Read more

May 25, 2008 | Filed Under Bonds | Leave a Comment

Bulk Deals and Block Deals

Bulk Deals:
A single transaction or set of transactions in which the total traded quantity bought/sold under any single client code is more than 0.5% of the number of equity shares of a listed company. Stock brokers need to disclose all the bulk deals information to the exchange on a daily basis through DUS (Data Upload Software).

If the bulk deal happens through a single trade, it should be notified to the exchange immediately upon the execution of the order. If it happens through multiple trades, it should be notified to the exchange within one hour from the closure of the trading.

Block Deals:
The definition of block deals provided by the Securities and Exchange Board of India (SEBI) is as follows:

A trade, with a minimum quantity of five lakh shares or a minimum value of Rs 5 crore, executed through a single transaction through a separate window of the stock exchange constitutes a block deal. Stock brokers are required to make a disclosure on a daily basis through DUS (Data Upload Software) regarding Block deals. Read more

May 22, 2008 | Filed Under Stocks | 6 Comments

Let’s understand Stock quotes - BSE Quotes

If you have ever wondered about stock market jargon and if stock quotes intimidate you, then you came to right place. Yes really!!! For beginners in the stock market
reading quotes is some what confusing task.

Reading and understanding stock quotes is a very important task for any investor. Quotes give a glimpse of almost everything about a stock.If you can read quotes, they will reveal technical and fundamental aspects of stock/stock market. Read more

May 22, 2008 | Filed Under Learning, Stocks | 1 Comment

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