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CALL-2600-INFOSIS
DATE : 11/7/2013
BUY PRICE :132.5
SELL PRICE: 150.3
Profit : 2225.00

What is meant by Interest?

When we borrow money, we are expected to pay for using it – this is known as Interest. Interest is an amount charged to the borrower for the privilege
of using the lender’s money. Interest is usually calculated as a percentage of the principal balance (the amount of money borrowed). The percentage rate
may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan.

What is Investment?
The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment.

Q26 What measures have been specified by SEBI to protect the rights of investor in Derivatives Market?

A. The measures specified by SEBI include:
a. Investor's money has to be kept separate at all levels and is permitted to be used only against the liability of the Investor and is not available to the trading member or clearing member or even any other investor.
b. The Trading Member is required to provide every investor with a risk disclosure document which will disclose the risks associated with the derivatives trading so that investors can take a conscious decision to trade in derivatives.
c. Investor would get the contract note duly time stamped for receipt of the order and ex*****on of the order. The order will be executed with the identity of the client and without client ID order will not be accepted by the system. The investor could also demand the trade confirmation slip with his ID in support of the contract note. This will protect him from the risk of price favour, if any, extended by the Member.
d. In the derivative markets all money paid by the Investor towards margins on all open positions is kept in trust with the Clearing House/Clearing corporation and in the event of default of the Trading or Clearing Member the amounts paid by the client towards margins are segregated and not utilized towards the default of the member. However, in the event of a default of a member, losses suffered by the Investor, if any, on settled / closed out position are compensated from the Investor Protection Fund, as per the rules, bye-laws and regulations of the derivative segment of the exchanges.
e. The Exchanges are required to set up arbitration and investor grievances redressal mechanism operative from all the four areas / regions of the country.

Q25 What are the eligibility criteria for setting up of currency futures segment in a recognized stock exchange?

A. A recognized stock exchange having nationwide terminals or a new exchange recognized by SEBI may set up currency futures segment after obtaining SEBI’s approval. The currency futures segment should fulfill the following eligibility conditions for approval:

The trading should take place through an online screen-based trading system, which also has a disaster recovery site.
i. The clearing of the currency derivatives market should be done by an independent Clearing Corporation, which satisfies the eligibility for a clearing corporation.
ii. The exchange must have an online surveillance capability which monitors positions, prices and volumes in real time so as to deter market manipulation.
iii. The exchange shall have a balance sheet networth of atleast Rs. 100 crores.
iv. Information about trades, quantities, and quotes should be disseminated by the exchange in real time to at least two information vending networks which are accessible to investors in the country.
v. The per-half-hour capacity of the computers and the network should be at least 4 to 5 times of the anticipated peak load in any half hour, or of the actual peak load seen in any half-hour during the preceding six months, whichever is higher. This shall be reviewed from time to time on the basis of experience.
vi. The segment should have at least 50 members to start currency derivatives trading.
vii. The exchange should have arbitration and investor grievances redressal mechanism operative from all the four areas/regions of the country.
viii. The exchange should have adequate inspection capability.
ix. If already existing, the exchange should have a satisfactory record of monitoring its members, handling investor complaints and preventing irregularities in trading.

Q24 What are the eligibility criteria for members of the currency futures segment?

A. The trading member is subject to a balance sheet networth requirement of Rs. 1 crore while the clearing member is subject to a balance sheet networth requirement of Rs. 10 crores. The clearing member is subject to a liquid networth requirement of Rs. 50 lakhs.

Q22 What are Currency Futures?

A. Currency futures are contracts to buy or sell a specific underlying currency at a specific time in the future, for a specific price. Currency futures are exchange-traded contracts and they are standardized in terms of delivery date, amount and contract terms.
Currency future contracts allow investors to hedge against foreign exchange risk. Since these contracts are marked-to-market daily, investors can--by closing out their position--exit from their obligation to buy or sell the currency prior to the contract's delivery date.

Q21 What are the requirements for a NRI to invest in equity derivatives market?
A. NRIs are permitted in invest in exchange traded derivative contracts subject to the margin and other requirements which are in place for other investors. In addition, a NRI is subject to the following position limits:

Index Options
Index Futures
Stock Options
Single stock Futures
NRI level









Disclosure requirement for any person or persons acting in concert holding 15% or more of the open interest of all derivative contracts on a particular underlying index
Disclosure requirement for any person or persons acting in concert holding 15% or more of the open interest of all derivative contracts on a particular underlying index
1% of free float market capitalization or 5% of open interest on a particular underlying whichever is higher
1% of free float market capitalization or 5% of open interest on a particular underlying whichever is higher

Q20 What are the requirements for a FII and its sub-account to invest in equity derivatives market?

A. A SEBI registered FIIs and its sub-account are required to pay initial margins, exposure margins and mark to market settlements in the derivatives market as required by any other investor. Further, the FII and its sub-account are also subject to position limits for trading in derivative contracts. The FII and sub-account position limits for the various derivative products are as under:

Index Options
Index Futures
Stock Options
Single stock Futures
FII Level





Rs. 250 crores or 15% of the OI in Index options, whichever is higher.
In addition, hedge positions are permitted.

Rs. 250 crores or 15% of the OI in Index futures, whichever is higher.
In addition, hedge positions are permitted.
20% of Market Wide Limit subject to a ceiling of Rs. 50 crores.
20% of Market Wide Limit subject to a ceiling of Rs. 50 crores.
Sub-account level





Disclosure requirement for any person or persons acting in concert holding 15% or more of the open interest of all derivative contracts on a particular underlying index
Disclosure requirement for any person or persons acting in concert holding 15% or more of the open interest of all derivative contracts on a particular underlying index
1% of free float market capitalization or 5% of open interest on a particular underlying whichever is higher
1% of free float market capitalization or 5% of open interest on a particular underlying whichever is higher