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I agree that each of these topics is vast, and commands an entire module on its own.
However these assets are not as liquid as equities. We are still at a very nascent stage
when it comes to trading these alternate assets in India. Given this, the idea here would
be introduce these assets, familiarize you with what drives these assets, and what you
need to watch out for before placing your trades. So, in a sense, you could consider this
module as a ‘thought starter’ of sorts for trading these alternative assets. Needless to
say, we will try and discuss these topics to a reasonable depth, ensuring you have more
than just the bare basics on these topics.
We’ll begin the module by discussing Currencies. We’ll discuss some of the popular
currency pairs traded in India such as USD-INR, GBP-INR, and INR-JPY. We also
discuss other (non INR) currency pairs such as EUR-USD, GBP-USD, and USD-JPY.
The discussion on currencies would be spread across a few chapters. The objective
here would be to introduce these currency pairs, and familiarize with not just the
contract specification but also with a few fundamental factors that affect these
currencies.
Once this is done, we’ll move on to the next part of the module. This’d deal with
Commodities. We’ll follow a similar template here – i.e. introduce the commodities (both
agri and non-agri) and get familiarize you with not just the contract specifications but
also a few fundamental factors which would influence the movement of these
commodities. Some of the commodities we’ll be discussing would be – Gold, Silver,
Zinc, Aluminum, Crude oil, Natural Gas, Turmeric, Cardamom, Pepper, Cotton, etc. Of
course, the formula to calculate the price of commodities such as Gold, based on the
price of Gold in International markets will also be discussed.
Lastly, this module will discuss ‘Interest Rate Futures (IFR)’, which I think is a very
exciting space. The discussion would deal with topics related to RBI’s borrowing
pattern, issuance of sovereign bonds, listing on NSE, and eventually trading them.
Based on how we progress, we can even touch topics related to bond trading and bond
trading strategies.
As you see, we have some really interesting stuff lined up. I believe this’ll be a great
learning experience for you, and me!
Please note, the prerequisites for this course –
1. Futures Trading
2. Options Theory
3. Technical Analysis
The above mentioned topics are absolutely essential before learning about currencies.
I’d suggest you brush up these topics before proceeding.
Let’s now begin this module by discussing few basics about currencies.
1. The Gold Standard system of evaluating currencies existed for a long time, but
eventually got phased out
2. The currency inequality between currencies exist because of political and
economic differences between two countries
3. By volumes, the currency markets is easily one of the largest
4. The currency markets are open 24 hours, 6 days a week
5. Currency is traded as pairs
6. Currency Pairs have a standard format to include Base Currency and Quotation
Currency
7. The Base Currency is always fixed to 1 unit